Strategy Development

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A detailed guide to Strategy Development, covering strategy concepts from military strategists (e.g. Sun Tzu's Art of War) to modern day strategy development thought leaders (Mintzberg and Bower). Breaks down a 3-phase approach to Strategy Development, including hierarchical challenges, activities, and deliverables.

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Strategy Development

  1. 1. learnppt.com Shareholder and stakeholderPowerPoint Diagram Pack Guidelines degrees of requirements Selection and targets of freedom KPIs1Strategy Development Market- attractiveness (relative to objective!) Set the Objectives Competencies required to deliver value proposition Potential Market posi- Define the Define the Company’s Strategic Core strengths and tions and Value BattlefieldsA detailed guide to Strategy Development, propositions Intent Competencies weaknessescovering strategy concepts from military Competitors ambition, posi- tion and Protectability and ubiquity of competenciesstrategists (e.g. Sun Tzu’s Art of War) to capabilitiesmodern day strategy development thought leaders (Mintzberg andBower). Breaks down a 3-phase approach to Strategy Development,including hierarchical challenges, activities, and deliverables. Check out our site for all your PowerPoint needs! • http://learnppt.com – Find our eBook on creating effective and professional presentations. Covers basic to advanced concepts, including storyboarding, diagramming, and the Consulting Presentation Framework. • http://learnppt.com/powerpoint -- Shop our catalog of Diagram Packs. We try to add more Packs monthly. All of our diagrams are professionally designed by ex-management consultants from top firms.
  2. 2. Contents • Strategy Overview 4 • Lessons from Military Strategists 7 • Strategy Development Fundamentals 11 - Approaches to Strategy Development - Evolution - Thinking Today • Elements of Strategy Development 18 - Strategic Challenges - Strategic Intent - Execution Design - Initiatives • Strategy Development Approach 26 - Strategy Hierarchies and Related Challenges - Activities & Deliverableslearnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 2
  3. 3. Remember, the end goal of your strategy is to win—but there is more to strategy than just winningPrimary Objectives of Strategy OBJECTIVE TRANSLATION 1 Strategy is about value creation value proposition 2 Strategy is about winning competitive advantage Strategy Strategy 3 Strategy is about selectivity and focus resource allocation THIS IS A PARTIAL PREVIEWbusiness transformation 4 Strategy is about speed and flexibility You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/learnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 3
  4. 4. Military strategists have been at the forefront of strategy development, shaping strategic thinking1 of modern business organizationsLessons from Military Strategists – OverviewMILITARY STRATEGIST MAJOR IDEAS STRATEGYSun Tzu2 (~400 • Winning without fighting is the acme of skill… Indirect B.C.) • Know and attack the enemy’s strategy… strategies Antoine-Henri Jomini3 • Mobility and superiority: Resources have to be mobile to attack the enemy’s Strategic (“Rationalist”) major strongholds with superior forces successively and alternatively focus (1779 – 1869) • Primacy of the offensive [Jena 1806]: focus forces to decide a war on the Carl von main battlefield Strategic Clausewitz4 paradox, • Supremacy of the defensive [Moskau 1812], paradox of offensive (“Romantic”) strategies [Waterloo 1815]: “not only are obstacles annihilated but the adaptive (1780 – 1831) [offensive] machine itself” strategies Strategy as • Decision cycle IS A PARTIAL others’ perceptions by more effective THIS dominance “manage PREVIEW acting and John Boyd5 observing, orienting, deciding and acting,” emphasize implicit over explicit thinking, (1927 – 1997) You can preview between operational states, disrupt or incapacitate • Fast transition the full PowerPoint document and adversary’s ability to cope with change indirect download it at http://learnppt.com/powerpoint/ strategies 1: Strategy from a military perspective usually does not include the process and definition of (political) objectives but the way to achieve those objectives 2: Sun Tzu, the art of war“, translated and with an introduction by Samuel B. Griffith; Oxford University Press, 1963 3: Strategisches Denken; Prof. Dr. Albert Stahel 4: Clausewitz und Napoleon, Jena, Moskau, Waterloo; Andreas Herberg-Rothe; Internationales Clausewitz-Zentrum, Führungsakademie der Bundeswehr 5: Colonel Peter Faber, USAF [John Boyd is considered one of the most important military strategists for the U.S.A. until recently]; based on his ideas recent thinking changes towards Swarm tactics, Network Centric Warfare, etc.learnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 4
  5. 5. Sun Tzu’s concept of five fundamental factors in military strategy does significantly incorporate elements of today’s business strategy conceptsLessons from Military Strategists – Sun Tzu, The Art of War (1 of 2) … Sun Tzu’s five fundamental factors in … could translate into terms of business military strategy1 … strategy as … (Moral influence) – the right way of a … following the right purpose and objective – government (benevolent, just and righteous) balancing the interest of all stakeholders (Heaven/ weather) – interaction, effects of … exogenous forces/ changes in the environment natural forces (winter‘s cold/ summer‘s heat) to be considered (PEST, market trends, etc.) (Terrain) – geographical structures, pre- … markets, industry structures, market positions requisites; chances/risks provided by battlefield (value propositions) and competitive forces (Command) – general‘s wisdom, THIS IS A PARTIAL PREVIEW leadership qualities sincerity, benevolence, courage and strictness … top management (Law, method) – doctrine,preview the full PowerPoint document and You can i.e.: organization, download it at http://learnppt.com/powerpoint/ management and control, assignment of officers, provision of … organizational principles, resource allocation process principle items used by the army 1: Sun Tzu: „The art of war“, translated and with an introduction by Samuel B. Griffith; Oxford University Press, 1963learnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 5
  6. 6. In reality, you will find varying approaches towards strategy development, depending on the complexity of the strategic challengeApproaches to Strategic Challenge Easy Complex1 NATURE OF STRATEGIC CHALLENGE Thinking First Seeing First Acting First • Define problem • Prepare • Trial and error • Diagnose • Incubate • Design options • Get enlightenment • Decide THIS ISVerify • A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ 1: Complexity being defined as a function of the number of influencing variables and the velocity of their changelearnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 6
  7. 7. Since the 50s, the focus of strategic development in the corporate world has evolved through five distinct phasesStrategy Development – Evolution Phase 5Effective-ness of Phase 4strategy Phase 3 Phase 2 Phase 1 Strategic Strategy Management Strategic renewal Long-term Planning Financial planning Planning 50’s 60’s 70’s 80’s 90’s - nowKey “Meet the “Forecast the “Think “Strategy as “Integratethemes budget” future” strategically to positioning” strategic beat competition” planning and implementation”Key Financial control, Growth planning, Alternative Strategic proces- Core competen-concepts budget planning resource allocation, A PARTIAL PREVIEW THIS IS strategies, Portfolio ses, market-based cies, strategy plan- SWOT, Ansoff analysis, strategy, Porter 5 ning & Execution; You can preview the full PowerPoint document Balanced Score- Matrix BCG-Matrix Forces, Value Chain and card download it at http://learnppt.com/powerpoint/Key Kenneth Andrew, Kenneth Andrew, BCG Michael E. Porter, Gary Hamel, C.K.people John MacLean, Igor Ansoff, BCG, Henry Mintzberg Prahalad, Henry Edith Penrose Alfred Chandler Mintzberg, Bower & Gilbert learnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 7
  8. 8. Today, there are two primary schools of thought—Mintzberg’s configurational school and Bower’s RAP-based strategyStrategy Development – Thinking Today MINTZBERG: CONFIGURATIONAL SCHOOL BOWER: RAP SCHOOL • Organizational configuration: • Bottom up strategy development: – Strategic management to sustain – Crafting of strategy as real time Organizational / stability iterative process Bottoms-up – rise of a particular set of strategies – Context dependent, evolving Driven Strategy – organization engages in behaviours decision making in an organization Development based on adoption to contexts – Uncertainty about decisions – (relative) stability of an strategic consequences organizations‘ configuration – Structure of resource allocation shapes strategy • Transformation: • Top down intervention: – strategic management as ability to – Centralized strategic leadership recognize need for and manage – Concentrated strategic decisions at Intent / Top-down transformation top Driven Strategy THIS IS A PARTIAL PREVIEW – Quantum leap to another – Driven by revised strategic intent Development configuration You candisruptive processfull PowerPoint document and top – preview the formulated at the – Constraint strategy-making process download it at http://learnppt.com/powerpoint/Note: RAP = Resource Allocation Process learnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 8
  9. 9. Bower’s concept puts the mechanisms of the strategic planning and budgeting process at the heart of strategy development Strategy Development – Resource Allocation Process RAP-FRAMEWORK FOR STRATEGY DEVELOPMENT 1 EXPLANATION Capital market • Strategic intent: Market context – perceived and communicated “official” strategy context • Organizational context: – Governance and organizational structure Resource (power system) allocation Organi- Strategic – Performance measures and rewards bottom-up stra- zational intent – Managers’ beliefs and cognitive frames tegy planning and context budgeting • Market context: Definition Selection – Demands of existing customers (major sources of revenue) Projects and – Technological development Operating System Initiatives • Capital market context: – Demands and influence of capital providers THIS IS A PARTIALResource allocation/ Strategy planning and • PREVIEW Realized budgeting: You can preview strategy the full PowerPoint document and and selection of – bottom-up driven identification download it at http://learnppt.com/powerpoint/ business opportunities1: based on Bower, J.L.; Gilbert, C.G.: “From resource allocation to strategy”; OXFORD university press, 2005 learnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 9
  10. 10. However, occasionally top-down intervention is requiredStrategy Development – Top-down Opportunities TOP-DOWN INTERVENTION BOTTOM-UP BIAS IMPLICATION OPPORTUNITIES • Organizational bias: Organization will not –strengthen existing capabilities promote and fund initiatives that: 1. Disruptive –reward single BUs for short- term results innovations –conservative and risk averse • are of high uncertainty 2. Converging markets • Market bias: • are alien to a company‘s contexts 3. Turbulent new and/ –fit existing customers • require high commitment or international –fit established view on markets with long-term pay-offs technology • are dysfunctional 4. Disinvestment • Capital market bias: regarding existing power opportunities –favour expected, predictable system behaviour –provide short term results THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and Signals for the need of top-down at http://learnppt.com/powerpoint/ download it intervention may also be derived from scanning the budgeting process for proposals with pending decisions or high commitment proposals.learnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 10
  11. 11. Based on Mintzberg and Bower’s insights, we derive three different types of strategic challenges for our clientsStrategic Challenges STRATEGY DEVELOPMENT CHALLENGES 1. Design top down intervention driven by revised strategic intent • Framing the type of the strategic challenge one of the most 3. Ambiguity, critical tasks in strategy clarify nature of challenge development and approach to it • Prerequisite to define the strategy development approach 2. Align execution context to materialize intent into realized strategyTHIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/learnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 11
  12. 12. Defining a strategic intent means to set objectives, define relevant battlefields, and define the required core competencesStrategic Intent CONSTITUTIVE ELEMENTS OF STRATEGIC INTENT KEY QUESTIONS Set the • Purpose, mission and priorities of Objectives the company? Set the Objectives • Battlefields relevant to achieve Define the objectives? Define the Battlefields Define the Intent • Critical success factors to achieve Core Battlefields victory on these battlefields? Competencies • Competencies and resources Define the needed to fulfil CSFs? Core Competencies • Sources for sustainability of THIS IS A PARTIAL PREVIEW victory? You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ What is the strategic intent the company should follow?learnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 12
  13. 13. Defining a strategic intent means analyzing and defining each element carefully and finding the best possible combination of all elementsElements of Strategic Intent Shareholder and stakeholder Guidelines requirements Selection degrees of and targets of freedom KPIs1 Market- Competencies attractiveness Set the required to (relative to Objectives deliver value objective!) proposition Potential Define the Company’s Market posi- Define the Intent Core strengths and tions and Value Battlefields Competencies weaknesses propositions Competitors THIS IS A PARTIAL PREVIEW Protectability ambition, posi- and ubiquity of You tion can preview the full PowerPoint document and and capabilities competencies download it at http://learnppt.com/powerpoint/ 1: KPI = Key performance indicatorslearnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 13
  14. 14. The first step is to understand the nature and context of the strategic challengeStrategy Hierarchies and Related Challenges Strategic Execution Ambiguity Intent Design Corporate Corporate Corporate Set the Objectives Define the Define the Intent Core Battlefields Competencies Business Division/ Business Business Business Business Business Business Unit AA BB … … Ambiguity Manage Design Strategic Organizational initiatives Execution context Functional Shape R&D/ R&D/ Strategy HR Fin Mktg IT … Level HR Fin Mktg Mfg. IT … Planning & Mfg. budgeting THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/learnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 14
  15. 15. Each hierarchical level has specific strategic challenges in defining a strategic intent …Strategy Hierarchies and Related Challenges – Strategic Intent TYPICAL STRATEGIC CHALLENGES 1 • Fit and balance requirements of capital markets and Strategic Execution other stakeholders Ambiguity Intent Design • Business portfolio management and decisions Corporate 1 2 • Create value in corporate portfolio, match corporate requirements and market requirements 2 • Competitive strategy, market positioning and USP Business Division/ generation Unit • Product/market strategies, Channel Strategies Functional 3 3 • Proof strategic relevance Level • Contribute to corporate/BU strategy THIS IS A PARTIAL PREVIEWof sustainable competitive • Provide sources advantages You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/learnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 15
  16. 16. A strategy development project has three phasesStrategy Development Approach – Overview 1 2 3 Set strategic guidelines Define strategic intent Execution Design Objectives Core Battle- Intent Compe- fields tencies Organi- Strategic Execution zational Initiatives context THIS IS A PARTIAL PREVIEW Strategy Planning & budgeting You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Significance of strategy Significance of execution designlearnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 16
  17. 17. In the initial phase, all levels are of the organization are involved, but as we progress, we drill down to a specific Business UnitStrategy Development Approach – Hierarchical Involvement Breakdown 1 2 3 Set strategic guidelines Define strategic intent Execution DesignCorporate Kick 1st 2nd off WS WSBusiness Unit 1st 2nd Final strategy Kick WS WS & multilevel off commitment THIS IS A PARTIAL PREVIEWBusiness Unit/Functions You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Working Working session session Optionslearnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 17
  18. 18. END OF PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/learnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 18
  19. 19. Read our eBook – How to Become a PowerPoint Guruhttp://learnppt.com/Browse our catalog of PowerPoint Diagram Packshttp://learnppt.com/powerpointJoin our mailing list and receive the Basic Toolkit for free!http://learnppt.com/mailinglistlearnppt.com Questions & feedback? Email me – dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 19

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