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Foundations of Strategic Competitiveness

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Lecture 01 on Telecommunications Management (MBAT622)

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Foundations of Strategic Competitiveness

  1. 1. Telecommunications Management Dr. Nurhizam Safie Bin Mohd Satar Dean, School of ICT, Asia e University Kuala Lumpur, Malaysia [email_address] [email_address]
  2. 2. Lecture 01 and 02: Foundations of Strategic Competitiveness
  3. 3. Foundation of Strategic Competitiveness <ul><li>A strategic competitiveness consists of moves to:- </li></ul><ul><ul><li>Attract customers </li></ul></ul><ul><ul><li>Withstand competitive pressures </li></ul></ul><ul><ul><li>Strengthen the company’s market position </li></ul></ul><ul><li>The objective of a competitive strategy is to generate a competitive advantage , increase the loyalty of customers and beat competitors. </li></ul><ul><li>A competitive strategy is narrower in scope than a business strategy </li></ul>
  4. 4. Strategic Planning <ul><li>A set of managerial decisions and actions that determine the long term performance of an organisation/company. </li></ul><ul><li>The main role of strategy is to plan for the future as well as to react to changes in the marketplace. </li></ul>
  5. 5. Strategic Planning process <ul><ul><li>Four steps involved in the strategic planning </li></ul></ul><ul><ul><li>process:- </li></ul></ul><ul><ul><li>Environmental scanning </li></ul></ul><ul><ul><li>Strategy formulation </li></ul></ul><ul><ul><li>Strategy implementation </li></ul></ul><ul><ul><li>Evaluation and control </li></ul></ul>
  6. 6. Environmental Scanning <ul><li>The purpose is to monitor, evaluate and disseminate information from both internal and the external business environment to the key decision makers of the organisation. </li></ul><ul><li>How? By conducting SWOT analysis </li></ul>
  7. 7. What is SWOT analysis? <ul><li>Analysing the internal strengths and weaknesses of the organisations as well as the external opportunities and threats to the organisations. </li></ul>
  8. 8. External Factors <ul><li>External environment can include a number of different forces which impact the financial performance and operations, including:- </li></ul><ul><ul><li>Political/legal factors; </li></ul></ul><ul><ul><li>Economic environment; </li></ul></ul><ul><ul><li>Socio-cultural factors; and </li></ul></ul><ul><ul><li>Technological factors </li></ul></ul><ul><li>, </li></ul>
  9. 9. Examples of External Factors <ul><ul><li>Political/legal factors  Telecommunications Act of 1996 </li></ul></ul><ul><ul><li>Economic environment  global economic recession </li></ul></ul><ul><ul><li>Socio-cultural factors  illegal downloading of songs </li></ul></ul><ul><ul><li>Technological factors  implementation of cheap technology (VOIP) : Skype </li></ul></ul><ul><li>, </li></ul>
  10. 10. Internal environment <ul><ul><li>Core competency </li></ul></ul><ul><ul><li>Organisational decision making </li></ul></ul><ul><ul><li>Organisational culture </li></ul></ul><ul><ul><li>Management-labor relationship </li></ul></ul><ul><ul><li>Operational Issues </li></ul></ul><ul><ul><li>Management-subsidiary relationships </li></ul></ul>
  11. 11. Examples of internal environment <ul><li>Core competency – a successful company possesses a specialised product process, brand recognition or ownership of talent which enables it to achieve higher revenues and market dominance. </li></ul><ul><li>Examples : Internet router  Cisco, best customer services –> Dell and innovation  Google and Apple </li></ul>
  12. 12. Internal environment <ul><ul><li>Organisational decision making </li></ul></ul><ul><ul><ul><li>Critical in developing new product and services </li></ul></ul></ul><ul><ul><ul><li>Meeting product delivery deadline </li></ul></ul></ul><ul><ul><ul><li>Providing managerial and technical support </li></ul></ul></ul><ul><ul><ul><li>Coordinating supply chain management </li></ul></ul></ul>
  13. 13. Internal environment <ul><ul><li>Organisational culture </li></ul></ul><ul><ul><li>Is the collection of beliefs, expectations and values shared by an organisation’s members and transmitted from one generation of employee to another. </li></ul></ul>
  14. 14. Internal environment <ul><ul><li>Management-labor relationship </li></ul></ul><ul><ul><li>Union – labour worker association working closely with the organisation to achieve the business mission. </li></ul></ul><ul><ul><li>Union will negotiate on lay-off, termination of workers, pay rise and comfortable working environment etc. </li></ul></ul>
  15. 15. Internal environment <ul><ul><li>Operational Issues </li></ul></ul><ul><ul><li>Value Chain – the strength and efficiencies in the production and distribution of product and services. </li></ul></ul><ul><ul><li>Example: purchase a Dell PC from the Internet and received the PC at home. </li></ul></ul>
  16. 16. Internal environment <ul><ul><li>Management-subsidiary relationships </li></ul></ul><ul><ul><ul><li>Ability to properly coordinate and oversee projects and goals throughout a company’s multiple worldwide subsidiaries. </li></ul></ul></ul><ul><ul><ul><li>Example: when Sony Corporation purchased Columbia Picture Entertainment. In the early years, lost of profit, later recovered through undergo a steep learning curve in managing a foreign subsidiary </li></ul></ul></ul>
  17. 17. How are strategies formulated? <ul><li>Strategy formulation: - </li></ul><ul><li>1) Planning and growth strategies </li></ul><ul><li>2) Competitive business strategy </li></ul>
  18. 18. Growth Strategies <ul><ul><li>Horizontal integration </li></ul></ul><ul><ul><ul><li>Is a growth strategy which allows a business to spread its influence by expanding into different geographic market while maintaining a commitment to its primary business </li></ul></ul></ul><ul><ul><ul><li>Example : McDonalds </li></ul></ul></ul>
  19. 19. Growth Strategies <ul><ul><li>Diversification  GE </li></ul></ul><ul><ul><li>Is a growth strategy which recognise the value of owning a variety of related and unrelated business </li></ul></ul><ul><ul><li>A company that owns a diverse portfolio of business is spreading the risk of its investments. </li></ul></ul><ul><ul><li>One subsidiary lost, the other will cover the lost. </li></ul></ul>
  20. 20. <ul><ul><li>Vertical Integration </li></ul></ul><ul><ul><li>Is a growth strategy which emphasizes the importance of owning most or all of a company’s operational phases. </li></ul></ul><ul><ul><li>The goal is to create internal synergy and efficiencies between a company’s various operating divisions. </li></ul></ul><ul><ul><li>Examples: cross-licensing between subsidiaries </li></ul></ul><ul><ul><li>Walt Disney and Time Warner </li></ul></ul>
  21. 21. Strategic Formulation starts with <ul><ul><li>Defining Business mission – where the company wants to be in the next five years. </li></ul></ul><ul><ul><li>Goals and objectives – are the end result of planned set of activities. They state what is to be accomplished and when. The achievement should be measurable quantitatively. </li></ul></ul>
  22. 22. Competitive Business Strategy <ul><ul><li>Introduction of new product or service </li></ul></ul><ul><ul><li>Initiating new marketing and promotion strategy </li></ul></ul><ul><ul><li>Implementing the acquisition of company </li></ul></ul><ul><ul><li>Reorganise the company structure </li></ul></ul><ul><ul><li>Decision to enter foreign market </li></ul></ul>
  23. 23. Importance of competitive scope <ul><ul><li>Cost leadership –ability to produce a product/services at lower cost. </li></ul></ul><ul><ul><li>Differentiation – ability to provide unique or superior value to the customer in term of product quality, special features </li></ul></ul><ul><ul><li>Examples : HBO and ESPN </li></ul></ul><ul><ul><li>Focus – targeting particular demographic or consumer group. Example MTV </li></ul></ul>
  24. 24. Strategy implementation <ul><li>Three core processes:- </li></ul><ul><li>1. Properly communicating the goals and </li></ul><ul><li>objectives of the proposed strategy </li></ul><ul><li>2. Assembling the project team in order to </li></ul><ul><li>carry out the strategy </li></ul><ul><li>3. Working through the operational details </li></ul><ul><li>necessary in order to get the job done. </li></ul>
  25. 25. Setting Strategy into Motion <ul><ul><li>Top management must put a realistic goals and objectives </li></ul></ul><ul><ul><li>Explaining the Goals and Objectives of the Strategic Plan in a properly manner. </li></ul></ul><ul><ul><li>Top- down approach </li></ul></ul><ul><ul><li>MBO </li></ul></ul>
  26. 26. Who Carries out strategic plan? <ul><ul><li>Senior executive leader is responsible for choosing the right people in order to successfully implement the strategy. </li></ul></ul><ul><ul><li>The right people capable of carrying out the strategy. </li></ul></ul><ul><ul><li>Attentive to details in assessing the strengths and limitations of a successful team. </li></ul></ul>
  27. 27. Working through the Operational Details <ul><ul><li>Project Team </li></ul></ul><ul><ul><li>Budgeting – managerial document associated with costs </li></ul></ul><ul><ul><li>Setting Target Dates </li></ul></ul><ul><ul><li>Operational Support -resources </li></ul></ul><ul><ul><li>Policies and Procedures – broad guidelines </li></ul></ul>
  28. 28. Evaluation and Control <ul><ul><li>Measuring Performance- against the stated objectives </li></ul></ul><ul><ul><li>Assessing Actual Performance- analysis when and if performance fails to achieve the stated objectives </li></ul></ul><ul><ul><li>Taking Corrective Actions if needed – may reveal the goals was unrealistic and take necessary corrective actions. </li></ul></ul>
  29. 29. Case Study <ul><li>The Walt Disney Company: A case Study in Vertical Integration and Complementary Assets </li></ul>

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