Classical Strategy Management (overview) by Sia Valentinova Tsolova

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The following lecture is part of an
introductory wide-topic course on
Starting IT Companies for Students,
aiming an introduction of
the basic terms and structure of
Classical Strategic management.

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Classical Strategy Management (overview) by Sia Valentinova Tsolova

  1. 1. JA BulgariaStrategic ManagementSia Valentinova - assistants.valentinova@gmail.com“Technology Entrepreneurshipand Innovations in IT”Sofia University “St. Kliment Ohridski”
  2. 2. IntroductionThe following lecture is part of anintroductory wide-topic course onStarting IT Companies for Students,aiming an introduction ofthe basic terms and structure ofStrategic management.Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  3. 3. Strategic managementStrategy answers the question:(a simplified version)How can we survive /win/ in the future?Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  4. 4. Strategy is about (1/2)• Where is the business trying to getto in the long-term (direction)• Which markets should a businesscompete in and what kind ofactivities are involved in suchmarkets? (markets; scope)• How can the business performbetter than the competition inthose markets? (advantage)?Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  5. 5. Strategy is about (2/2)• What resources (skills, assets, finance,relationships, technical competence,facilities) are required in order to beable to compete? (resources)?• What external, environmental factorsaffect the businesses ability tocompete? (environment)?• What are the values and expectationsof those who have power in andaround the business? (stakeholders)Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  6. 6. Strategic managementSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"StrategyAnalysisStrategyFormulationStrategyImplementation
  7. 7. Strategic managementSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"StrategyAnalysisStrategyFormulationStrategyImplementationand ExecutionEvaluation andControl
  8. 8. Strategic management
  9. 9. Strategic management
  10. 10. Purpose or Mission statementor Mantra• A mission statement is a briefdescription of a companysfundamental purpose. A missionstatement answers the question,"Why do we exist?"• The mission statement articulatesthe companys purpose both forthose in the organization and forthe public.Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  11. 11. Purpose or Mission statementor MantraAccording to Bart (1997), the commercialmission statement consists of 3 essentialcomponents:• Key market – who is your targetclient/customer? (generalize ifneeded)• Contribution – what product orservice do you provide to that client?• Distinction – what makes yourproduct or service unique, so that theclient would choose you?Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  12. 12. Mission statement or Purposeor Mantra• Guy Kawazaki: Make meaning inYour company• http://www.youtube.com/watch?v=lQs6IpJQWXc• Guy Kawazaki: Make a Mantra• http://www.youtube.com/watch?v=jT7xlFTinIwSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  13. 13. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  14. 14. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"4. This company’s mission is togive people the power to shareand make the world more openand connected.According to you, to whichcompany does this missionstatement belong to?(next slide shows the answer)
  15. 15. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"4. This company’s mission is togive people the power to shareand make the world more openand connected.This mission statement belongsto
  16. 16. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"5. This company’s mission is toorganize the world‘sinformation and make ituniversally accessible anduseful.According to you, to whichcompany does this missionstatement belong to?(next slide shows the answer)
  17. 17. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"5. This company’s mission is toorganize the world‘sinformation and make ituniversally accessible anduseful.This mission statement belongsto
  18. 18. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"7. This company’s mission is tobe the fabric of real-timecommunication on the web.According to you, to whichcompany does this missionstatement belong to?(next slide shows the answer)
  19. 19. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"7. This company’s mission is tobe the fabric of real-timecommunication on the web.This mission statement belongsto
  20. 20. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"10. This company’s mission is toprovide fast and easy videoaccess and the ability to sharevideos frequently.According to you, to whichcompany does this missionstatement belong to?(next slide shows the answer)
  21. 21. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"10. This company’s mission is toprovide fast and easy videoaccess and the ability to sharevideos frequently.This mission statement belongsto
  22. 22. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"… Now these were singlebusiness companies – whatabout the mission statementsof multi-business companies?
  23. 23. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"2. This company is committedto bringing the best personalcomputing experience tostudents, educators, creativeprofessionals and consumersaround the world through itsinnovative hardware, softwareand Internet offerings.
  24. 24. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"2. This company is committedto bringing the best personalcomputing experience tostudents, educators, creativeprofessionals and consumersaround the world through itsinnovative hardware, softwareand Internet offerings.
  25. 25. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"6. This company’s mission is toenable people and businessesthroughout the world to realizetheir full potential.
  26. 26. Mission StatementsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"6. This company’s mission is toenable people and businessesthroughout the world to realizetheir full potential.
  27. 27. Your Company’s Vision• Where should the company beheaded?• What should its future technology-product-customer focus be?• What kind of enterprise we want tobecome?• What industry standing do we wantto achieve in five years?Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  28. 28. Vision• Apple– Vision in 2000– Vision in 2010• Can you see what is their vision forthe future? (see first 40 seconds)https://www.youtube.com/watch?v=RQieoqCLWDoSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  29. 29. Setting Objectives• The purpose of setting objectives is toconvert managerial statements ofstrategic vision and business missioninto specific performance targets –results and outcomes the organisationwants to achieve.• Setting objectives and then measuringwhether they are achieved or nothelps managers track anorganisation’s progress.Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  30. 30. SMART objectives
  31. 31. SMART objectives• S (Specific)- what do we want toachieve?• M (Measurable) - how will we know ifit has achieved the right result?• A (Achievable) - do we have the rightresources to carry this out?• R (Relevant) - does it address theproblem?• T (Time based) - what is the deadline?
  32. 32. Strategic management
  33. 33. Strategy Analysis Tools• SWOT Analysis• PEST Analysis• Competition Analysis (Niche/GapAnalysis)• TOWS Analysis• Porter’s Five Forces• Critical Success Factors• Unique Selling Proposition Analysis(this is a list in short)
  34. 34. Strategic Analysis• SWOT Analysis• SWOT analysis (Strengths,Weaknesses, Opportunities andThreads Analysis)StrategicAnalysis+ -InternalEnvironmentStrengths (S) Weaknesses (W)ExternalenvironmentOpportunities (O) Threads (T)
  35. 35. Strategic Analysis• PEST Analysis – External Environment(Political, Economical, Social,Technology)+ -PoliticalFactorsEconomicalFactorsSocialFactorsTechnologyFactors
  36. 36. Strategic AnalysisSpecific GoalsExternal Analysis- Customers- Pricing constraints- Competitors- Distribution issues- Technology- Macro-economy- Regulation- Work-style trends- Major uncertainties- Suppliers- Potential partnersThreads andOpportunitiesInternal Analysis- Current performance- Brand power- Cost structure- Product portfolio- R&D pipeline- Technical mastery- Employee skills- Company cultureStrengths andWeaknessesStrategy formulation
  37. 37. Strategic ToolsStrategic Analysis(EnvironmentalAnalysis)ExternalAnalysisMacro levelPEST AnalysisMicro levelThreads (SWOTAnalysis)Opportunities(SWOTAnalysis)InternalAnalysisStrengths(SWOTAnalysis)Weaknesses(SWOTAnalysis)
  38. 38. Strategic Analysis• Niche / GAP AnalysisEx.: mobilephones withtouch screenEx.: mobilephoneswithout touchscreenHigh-endproductLow-endproductAppleSamsungHTCNokiaBlack-berry
  39. 39. Strategic management
  40. 40. Strategy management
  41. 41. Strategy management
  42. 42. General Classic StrategiesPorter’s Generic Strategies
  43. 43. Some news on strategies…• Network effect strategy• Blue Ocean strategySia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  44. 44. Functional strategies• Some more information onFunctional strategies– Marketing, Go-to-market strategy …– Product development– Customer relationships– Human resources– Etc.Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  45. 45. Strategies byCompany hierarchyMaybe technology will changecompany’s complex hierarchies?- How do you think?- In what direction?
  46. 46. Human Resource management*Examples for functional strategies:
  47. 47. Go-to-market strategyCheck “Channel Value Chain”
  48. 48. The Boston Matrix
  49. 49. The Ansoff Matrix(Product/Market Expansion Grid)
  50. 50. The Ansoff Matrix(Product/Market Expansion Grid)A further modulation: The 9-Box Grid
  51. 51. The Product Life-Cycle Diagram
  52. 52. Strategic management
  53. 53. Strategy implementationand executionWhat is the difference betweenStrategy implementation and Strategyexecution?Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  54. 54. Strategy implementationand execution• Strategy implementation:Setting up the organisation in order tosuccessfully implement the strategy• Strategy execution:Actually executing the strategy,following the defined plan and goals,etc.Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  55. 55. Strategy implementationand execution• And while during strategy executionstrategy control is also carried out,let’s see what is Strategy Controland its purpose and … which is thetool that unifies StrategyImplementation, Strategy Executionand Strategy Control ?Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  56. 56. Strategic management
  57. 57. Strategic management:Control and Evaluation• Controlling is a process, which helpsdefine how much actual actions andresults are corresponding to thedesired actions and previously definedgoals.• Aim: to be able to find as early aspossible deviations from the definedactions and goals and to be able tocorrect in time these deviations.
  58. 58. Strategic management:Control and EvaluationThe process of control has three majorstages:1) Developing of standards and guidelines forimplementation2) Measuring and comparing of the reached resultswith defined standards3) Evaluation of the information and results. Takingcorrecting actions.
  59. 59. Strategic managementSo… What is Balanced Scorecard? And how ithelps us in Strategy management, Strategyexecution and Strategy control?Balanced Scorecard divides goals andtheir connections in four perspectives:- Financial perspective- Customers perspective- Internal processes perspective- Learning and Growth perspective
  60. 60. Strategy maps
  61. 61. Balanced Scorecard:strategy mapsSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"Example by Borislav Asenov’s master thesis (software QPR Scorecard) with mentor Sia Valentinova
  62. 62. Balanced ScorecardSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"Example by software Balanced Scorecard Designer
  63. 63. Example by Borislav Asenov’s master thesis (QPR Scorecard software) with mentor Sia ValentinovaSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  64. 64. KPIsExample by software Balanced Scorecard Designer
  65. 65. Balanced ScorecardSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"Example by Borislav Asenov’s master thesis with mentor Sia Valentinova
  66. 66. Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"
  67. 67. DashboardExample by software Balanced Scorecard Designer
  68. 68. Balanced ScorecardSia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"Example by Borislav Asenov’s master thesis (software QPR Scorecard) with mentor Sia Valentinova
  69. 69. Strategic management
  70. 70. Thank you for your attention!Благодаря Ви за вниманието!(in Bulgarian)Sia Valentinova - "TechnologyEntrepreneurship and Innovations in IT" -Sofia University "St. Climent Ohridski"

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