Strategic thinking


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Slide deck from a two day workshop on Strategic Thinking, utilizing HBR Case Studies on Huawei and Apple to illustrate the strategic challenges in the global high tech industry. We were intending a mind shift from static conceptions of strategy toward "sense and response", biological systems thus strategy as a dynamic conception.

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Strategic thinking

  1. 1. management|consulting
  2. 2. STRATEGIC THINKER • • • management|consulting Analyzes and reflects on competitive advantage, business models and markets Leader and contributor in strategy meetings, conferences for company an clients. Proactively leads strategic initiatives for company and clients. BOOSTER 2 BOOSTER 1 Preparation [alone / group of 3] Review Huawei Case Study Review Materials on Analytic Tools • • Intended Learnings Understanding Strategy 
 and Strategic Management Application of Basic Strategic Tools Content What is Strategy Strategic thinking vs. Strategic Planning What is Strategic Management Traditional Conceptions of Strategy Introducing Analytical Models SWOT / PEST Market Based View • Porter’s Five Forces • Porter’s Four Corners • Generic Strategies 
 (Cost vs. Differentiation) Resource Based View • Core Compencies [...] Exercises Applying basic strategy analysis tools Discussion of Huawei Case Study Homework in Mentee Peer Group of 3 Case Studies Review the strategy of your LoB Review the strategy of your competitors Oracle,, Local Players Read Chapter on Strategic Management in “Creating Dynamic Capabilities” Alsleben’s Book • • • • Suggested Mentor Assignments Case Studies Review the strategy of your LoB Review the strategy of your competitors Oracle,, Local Players [optional] read suggested Strategy Books Watch iTunesU Strategy Lectures • • • • • Intended Learnings Understanding Your companys Strategy 
 and Competitive Positioning Understanding and Application of Modern Strategy Concepts Content Review of Booster 1 Presentation of Homework / Discussion of Your company’s Strategy. • • ! Strategy in High Velocity Environments
 The fluid organization
 Dynamic Capabilities ! Conclusion ! ! Exercises Driving Strategy
 Creating dynamic capabilities for your own LoB/Unit
  3. 3. Why this module? management|consulting Traps Best Buddy Cheese
  4. 4. management|consulting 战略 WHAT IS STRATEGY ?
  5. 5. Warmup: What is strategy? What does it include? management|consulting Gather in your groups of three and discuss: • What is strategy? • What elements does it involve? • Why is strategy important?
  6. 6. A Dictionary definition of Strategy management|consulting strategy |ˈstratəәjē| noun ( pl. strategies ) ! a plan of action or policy designed to achieve a major or overall aim: time to develop a coherent economic strategy | shifts in marketing strategy. ! • the art of planning and directing overall military operations and movements in a war or battle. Often contrasted with tactics (see tactic). ! • a plan for such military operations and movements: nonprovocative defense strategies. ! ORIGIN early 19th cent.: from French stratégie, from Greek stratēgia ‘generalship,’ from stratēgos (see stratagem) .
  7. 7. Chinese Strategy 战 略 management|consulting Zhàn - war, warfare, battle ! 
 Lüè - Plan, Brief Account
  8. 8. An business definition of Strategic Management management|consulting "The field of strategic management deals with (a) the major intended and emergent initiatives (b) taken by general managers on behalf of owners, (c) involving utilization of resources (d) to enhance the performance (e) of firms (f) in their external environments."
  9. 9. management|consulting 战略 STRATEGIC PLANNING VS. STRATEGIC THINKING
  10. 10. Strategic Planing Process (fixed cycles) management|consulting Strategic Targetplanning Create a Vision Corporate Policy Corporate Mission Formulation of Strategic Targets Strategic Analysis Define Objectives Environmental Analysis Corporate Analysis Prognosis Strategy Development Strategy Formulation Define Strategies Corporate Strategy Business Unit Strategies Functional Strategies Evaluation and Selection of Strategies Implement Strategy Implementation Implemention Plan Implementation Implementation Controlling Control Strategy Controlling Source: (Welge & Al-Laham, 2008, p. 186)
  11. 11. Limitations of Strategic Planning management|consulting Strategies can only be implemented as designed if: • Strategic intentions have been precisely communicated so that everybody in the organization understands the goal without any ambiguities. ! • Strategic intentions are accepted among all employees, sharing these intentions. ! • No outside forces interfer with the strategies or change outcomes. The environment is either perfectly calm, predictable or under full control of the organization. Source: Mintzberg and Waters (1985, p. 258)
  12. 12. Emerging Strategies vs. Intended Strategies management|consulting • Few strategies in organizations can be clearly labeled as intended or emerging; various forms of strategies exist in the continuum between the two extremes (Mintzberg & Waters, 1985). Emergent strategies “do not mean that management lost control over organizational events, but that it is prepared and capable to learn as a reaction to the environment and the processes in the organization (Ortmann, 2010, p. 3). • Emerging • • Intended Intended strategies are often brought bottom down by a company’s management. More often however strategies develop in an unintended way from the actions and decisions taken in the enterprise – they emerge and can only be recognized as such ex post as a consistent “pattern in a stream of decisions” (Mintzberg & Waters, 1985, p. 257). Management should thus remain constantly aware of emergent strategies, identify them and potentially support them if they are congruent with the organization’s overall targets and goals.
  13. 13. The resource allocation process Filters Response to unforeseen opportunities and crises d op ack Feed b Results crise s an p Loo ing and erst und Actual strategy that is implemented Ne w ck dba Fee ter Bet New products, services, processes, and acquisitions port unit ies Decisions about what to do, what not to do, and what to prioritize Analytical project followed by implementation Emergent Strategy: Loop Resource Allocation Process: Intended Strategy: management|consulting Definition is the process by which technical and economic characteristics of a project are determined. New projects represent a response to a problem or opportunity perceived by operational managers; ! Impetus is the force that moves a project towards funding. Decisions to fund a project often do not depend on the future predicted net present value, but on the track record of the middle manager between operations and top management that determines the selection of a project. As predictions about the future are inherently difficult top managers are more likely to approve projects that have been successful in the past. Middle managers therefore act as a filter as they carefully weight risk and reward and typically sponsor projects that have a low probability of failure; ! Structural context is the set of forces that shapes the previous processes of definition and impetus. The structural context with its organizational roles, responsibilities and incentive systems therefore shapes strategy.
  14. 14. Modern Strategy Conceptions Mechanical System management|consulting Biological System
  15. 15. Strategic Thinking (continuous) Controlling Analysis 4) Are%we%on%track%to% get%there?% 3) How%do%we%get% there?% Strategy management|consulting 1) Where%are%we%today?% 2) Where%are%we%going?% Vision
  16. 16. management|consulting 战略 TOOLS FOR STRATEGIC ANALYSIS
  17. 17. BUSINESS MODEL ANALYSIS management|consulting
  18. 18. (attributes of the Environment) (attributes of the organization) External Origin Internal Origin SWOT management|consulting Helpful to achieve the objective Harmful to achieve the objective S W O T
  19. 19. PEST management|consulting
  21. 21. Porter’s five forces - Industry Competitiveness management|consulting
  22. 22. management|consulting 战略 COMPETITIVE STRATEGY
  23. 23. The Prisoner’s Dilemma (1/3) SCENARIO: ! After a bank robbery the police interrogates the two suspects independently from each other. ! • If both confess each others crime they both go to jail for 5 years. ! • If one accuses the other and that remains silent he walks out free, while the other goes to jail for 20 years. (whistleblower bonus) ! • ! If both remain silent, they have to spend one year in prison. management|consulting
  24. 24. The Prisoner’s Dilemma (2/3) management|consulting
  25. 25. Exercise: The Prisoner’s Dilemma (2/3) (-5;-5) (0;-20) (-20;0) (-1;-1) management|consulting
  26. 26. COOPERATE CHEAT COOPERATE (20;20) (0;30) CHEAT Exercise: The Cooperation Dilemma (3/3) (30;0) (10;10) management|consulting
  27. 27. management|consulting 战略 CASE STUDY REVIEW
  28. 28. Strategic Thinking: Case Study management|consulting 任正⾮非
  29. 29. Strategic Thinking: Case Study management|consulting • What were key factors of Huawei's success? 
 • Using a SWOT analysis how would you assess Huawei against other competitors (e.g. Cisco).
   • Huawei wants to go global, use the PEST tool to assess they current strategic position in foreign countries.
 • If you were the CEO of Huawei, what strategy would you define to go global?
  30. 30. management|consulting DYNAMIC STRATEGY & THE ADAPTIVE ENTERPRISE 战略
  31. 31. management|consulting
  32. 32. Strategies can only be implemented as designed if: management|consulting management|consulting Conditions Strategy precisely communicated - everybody understands. All accept Strategy No outside forces interfer with the strategies Inhibitors Facilitators Bounded Rationality ! Complexity ! Time, Resources Transparent and Open Communication ! Simplification ! Stakeholder specific messages Opposition ! Snipers ! Political Behaviour Change Management, ! Encouraging Emerging Strategies ! Stakeholder Management High Velocity Environment ! Institutional Resistance ! Competitor‘s Strategy Organisational Learning
 The adaptive Enterprise Dynamic Capabilities Competitive Strategy
  33. 33. Organizational Learning management|consulting management|consulting Post-mortem is a process, usually performed at the conclusion of a project, to determine and analyze elements of the project that were successful or unsuccessful. Project post-mortems are intended to inform process improvements which mitigate future risks and to promote iterative best practices. Postmortems are often considered a key component of, and ongoing precursor to, effective risk management.
  34. 34. ORG-LEARNING: SINGLE LOOP LEARNING management|consulting management|consulting Single-loop learning involves connecting a strategy for action with a result. For example, if an action we take yields results that are different to what we expected, through single-loop learning, we will observe the results, automatically take in feedback, and try a different approach.
  35. 35. ORG-LEARNING: DOUBLE LOOP LEARNING management|consulting This cyclical process of applying a new strategy to achieve an expected or desired outcome may occur several times and we may never succeed. Running out of strategies may push us to re-evaluate the deeper governing variables that make us behave the ways we do. Re-evaluating and reframing our goals, values and beliefs is a more complex way of processing information and involves a more sophisticated way of engaging with an experience. This is called double-loop learning and looks at consequences from a wider perspective.
  36. 36. Organizational Learning management|consulting
  37. 37. Organizational Learning management|consulting
  38. 38. The Adaptive Enterprise management|consulting Haeckel, S. H. (1999). Adaptive enterprise : Creating and leading sense-and-respond organizations. Boston: Harvard Business School Press
  39. 39. Dynamic Capabilities management|consulting SEIZE SENSE Analytics to learn and sense to learn and sense Structures processes, culture for seizing opportunities TRANSFORM Change continuous alignment and realignment
  41. 41. management|consulting 战略 SUMMARY
  42. 42. Assignments until Day 2 management|consulting • What were key factors of Huawei's success? 
 • Using a SWOT analysis how would you assess Huawei against other competitors (e.g. Cisco).
   • Huawei wants to go global, use the same SWOT tool to assess they current strategic position.
 • If you were the CEO of Huawei, what strategy would you define to go global?
  43. 43. QUESTIONS & ANSWERS management|consulting DR. MARKUS ALSLEBEN Alsleben Ltd. (HK) Management Consulting +852 63408158 Front Side: 2c Black/RED embossed print Card Paper 1077