Presented at the Association of Language Companies (ALC) annual conference in Miami on the 20th May 2010. It provides an introduction to PESTLE analysis, Porter\’s Five Forces, the Resourced Based View of the Firm (RBV and VRIN resources) and a business development model first published by L Greiner.

1. Sustainable Development and
Organizational Change
(featuring: evolution and revolution as organizations grow)
Richard Brooks
20th May 2010
www.k-international.com

2. Agenda
• Formulating a strategy
• Models used
• So what?
• Development of firms (evolution and revolution as organizations
grow)
• Another so what/sum up
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3. Text
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4. Formulating a Strategy
Strategy needs a process.
It’s a science not an art
Going to show you
• PEST analysis
• Five Forces
• Resource Based View of the Firm
How many people here use/
THE FIRM/COMPANY/ know these tools?
ORGANIZATION
MICRO
ENVIRONMENT
MACRO
ENVIRONMENT
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5. The Macro Environment
• Political, Economic, Social, Technological (and sometimes
Environmental & Legal) framework helps with clarity of thinking.
• Brainstorm ideas under each topic making sure you have
defined the market space beforehand. Score each item and
place on a probability matrix. Action the red first.
Political Economic
HIGH
• Spread of socialism • Low cost of capital
• War • Low growth
PROBABILITY
• Environmental issues • High unemployment
• Tax changes • Value of $/£
MED
Social Technological
• Healthcare reform bill • Google translate
LOW
• Social Media • Workflow/TMS
• Aging Population • E-Procurement
• Level of Education • 100 mbps Broadband
LOW MED HIGH
IMPACT
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6. The Macro Environment
• Political, Economic, Social, Technological (and sometimes
Environmental & Legal) framework helps with clarity of thinking.
• Brainstorm ideas under each topic making sure you have
defined the market space beforehand. Score each item and
place on a probability matrix. Action the red first.
• Environmental issues • Workflow/TMS
Political Economic • War
HIGH
• Healthcare reform bill • Tax changes
• Aging Population • Google translate
PROBABILITY
• Spread of socialism • Social Media
MED
• Low cost of capital
• Value of $/£
• Low growth
Social Technological • Level of Education
LOW
• E-Procurement
• 100 mbps Broadband
• High unemployment
LOW MED HIGH
IMPACT
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7. The Micro Environment
Threat of a
NEW ENTRANT
Bargaining power The Rivalry within Bargaining power
of SUPPLIERS the INDUSTRY of CUSTOMERS
Threat of
SUBSTITUTE
product or service
Adapted from Michael Porter, “How Competitive Forces Shape Strategy”, Harvard Business Review 1979
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8. The Micro Environment
Threat of a Threat of a
NEW ENTRANT NEW ENTRANT
ning power Bargaining power The Rivalry within Bargaining power Bargaining powe
PPLIERS of SUPPLIERS the INDUSTRY of CUSTOMERS of CUSTOMERS
Supply Chain
Threat of Threat of
SUBSTITUTE SUBSTITUTE
product or service product or service
Adapted from Michael Porter, “How Competitive Forces Shape Strategy”, Harvard Business Review 1979
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9. The Organization
• The Resourced Based View of the Firm examines the link between
‘the internal characteristics of a firm and a firm’s performance’.
• States that a firm can be regarded as a bundle of resources. And it’s
the resources which are simultaneously valuable, rare, imperfectly
imitable, non-substitutable that provide the firm with the main source of
sustainable competitive advantage.
• List your resources… are they valuable? Are they easy to imitate? Are
they easy to leverage? Do you have any VRIN resources?
Is it? Imperfectly Non
Resource Valuable Rare Imitable Substitutable Key Learning Points
MAKE RARE
Buildings RESOURCES VALUABLE
YOUR REPUTATION IS
Workflow system VERY IMPORTANT IN
THIS INDUSTRY
Databases TACIT KNOWLEDGE is a
key VRIN resource
Reputation COMPARE WITH
COMPETITION – WHERE
Staff ARE THE DIFFERENCES?
Adapted from Barney “Firm resources and sustainable competitive advantage”, Journal of Management 1991
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10. Greiner’s Curve
Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972
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11. Greiner’s Curve
Growth via
CREATIVITY
Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972
www.k-international.com

12. Greiner’s Curve
Crisis of
LEADERSHIP
Growth via
CREATIVITY
Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972
www.k-international.com

13. Greiner’s Curve
Crisis of
LEADERSHIP
Growth via
DIRECTION
Growth via
CREATIVITY
Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972
www.k-international.com

14. Greiner’s Curve
Crisis of
AUTONOMY
Crisis of
LEADERSHIP
Growth via
DIRECTION
Growth via
CREATIVITY
Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972
www.k-international.com

15. Greiner’s Curve
Crisis of
AUTONOMY
Crisis of
LEADERSHIP
Growth via
DELEGATION
Growth via
DIRECTION
Growth via
CREATIVITY
Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972
www.k-international.com

16. Greiner’s Curve
Crisis of
CONTROL
Crisis of
AUTONOMY
Crisis of
LEADERSHIP
Growth via
DELEGATION
Growth via
DIRECTION
Growth via
CREATIVITY
Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972
www.k-international.com

17. Greiner’s Curve
Crisis of
CONTROL
Crisis of
AUTONOMY
Growth via
COORDINATION
Crisis of
LEADERSHIP
Growth via
DELEGATION
Growth via
DIRECTION
Growth via
CREATIVITY
Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972
www.k-international.com

18. Greiner’s Curve
Crisis of
RED TAPE
Crisis of
CONTROL
Crisis of
AUTONOMY
Growth via
COORDINATION
Crisis of
LEADERSHIP
Growth via
DELEGATION
Growth via
DIRECTION
Growth via
CREATIVITY
Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972
www.k-international.com

19. Greiner’s Curve
Crisis of
RED TAPE
Crisis of
CONTROL
Growth via
COLLABORATION
Crisis of
AUTONOMY
Growth via
COORDINATION
Crisis of
LEADERSHIP
Growth via
DELEGATION
Growth via
DIRECTION
Growth via
CREATIVITY
Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972
www.k-international.com

20. Greiner’s Curve Crisis of
???
Crisis of
RED TAPE
Crisis of
CONTROL
Growth via
COLLABORATION
Crisis of
AUTONOMY
Growth via
COORDINATION
Crisis of
LEADERSHIP
Growth via
DELEGATION
Growth via
DIRECTION
Growth via
CREATIVITY
Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972
www.k-international.com

21. To sum up
• Traditional strategy tools are vital but can lead to generic
strategies (eg Porter’s 3 generic strategies (low cost, focus and
differentiation)) – watch out for them at your competitors.
• RBV lets you explore the internal characteristics of your own
companies and see what works and what should be invested in.
• Need to look at time factors when developing corp strategy –
this can be your company’s developmental stage AND/OR the
state the surrounding industry is in.
• Sustainable growth needs to be designed into the strategy, it
won’t just happen.
• The ALC will help you with your research.
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22. Thank you
Richard Brooks
K International plc, UK
Tel: 0044 1908 572600
Richard.Brooks@k-international.com
http://uk.linkedin.com/in/richardbrooks
http://twitter.com/K_International
www.k-international.com/blog
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