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Strategic Thinking
Session 3
AGENDA• Types of Strategic Analysis• Strategic Thinking Skills
Types of Strategic Analysis
• PESTLE• SWOT• EFE & IFE• GE MATRIX• SHELL MATRIX
Types of Strategic Analysis
• PESTLE AnalysisPoliticalEconomicSocialTechnologicLegalEnvironmental
Types of Strategic Analysis
• SWOTStrengthWeaknessOpportunityThreat
Types of Strategic Analysis
WO SO
WT STWeakness Strength
Threat
Opportunity
Types of Strategic Analysis
Cash Cow Star
Dog ?
Mar
ket G
row
th
Low High
Low
Eliminate
Keep Invest & Grow
Investigate
Types of Strategic Analysis
• GE Matrix
Low
Medium
High
Low Medium High
Industry Attractiveness
Business Strengths
Eliminate
Keep
Invest
Improve
Improve Improve
Eliminate Eliminate
Invest
Types of Strategic Analysis• GE Matrix
Low
Medium
High
Low Medium High
Industry Attractiveness
Business Strengths
Ad Gifts
Indoor Print
Full Service
Exhibitions
TVC Outdoor Print
Paper Print Offset Print
OutdoorMedia
Types of Strategic Analysis• Shell Matrix
Strong
Medium
Weak
Unattractive Average Attractive
Competitive Capabilities
Sector Profitability
Disinvest? Gradual Withdrawal
Take a Risk
Gradual Withdrawal
Maintain or Look forward
Try Harder
Cash Generator Looking for Growth
Maintain Leadership
Types of Strategic Analysis• Market-Product
Market Developmen
t
Diversification
Market Penetration
Product Developmen
t
Mar
ket S
cope
Customer Scope
Current New
New
Current
Types of Strategic Analysis
• EFE: External Factors Evaluation • IFE: Internal Factors Evaluation
Strategic Thinking vs. Strategic Planning
strategic thinking and planning are “distinct, but interrelated and complementary thought processes” that must sustain and support one another for effective strategic management. Graetz's model holds that the role of strategic thinking is "to seek innovation and imagine new and very different futures that may lead the company to redefine its core strategies and even its industry". Strategic planning's role is "to realize and to support strategies developed through the strategic thinking process and to integrate these back into the business".
Vision of the Future
Strategic Thinking:Only the shape of the future can be predicted.
Strategic Planning:A future that is predictable and specifiable in detail.
Strategic Formulation & Implementation
Strategic Thinking:Formulation and implementation are interactive rather than sequential and discrete.
Strategic Planning:The roles of formulation and implementation can be neatly divided.
Managerial Role in Strategy Making
Strategic Thinking:Lower-level managers have a voice in strategy-making, as well as greater latitude to respond opportunistically to developing conditions.Strategic Planning:Senior executives obtain the needed information from lower-level managers, and then use it to create a plan which is, in turn, disseminated to managers for implementation.
Control
Strategic Thinking:Relies on self-reference
Strategic Planning:Asserts control through measurement systems
Managerial Role in Implementation Strategic Thinking:All managers understand the larger system, the connection between their roles and the functioning of that system, as well as the interdependence between the various roles that comprise the system.
Strategic Planning:Lower-level managers need only know his or her own role well and can be expected to defend only his or her own turf.
Strategy Making
Strategic Thinking:Sees strategy and change as inescapably linked and assumes that finding new strategic options and implementing them successfully is harder and more important than evaluating them.
Strategic Planning:The challenge of setting strategic direction is primarily analytic.
Process and Outcome
Strategic Thinking:Sees the planning process itself as a critical value-adding element.
Strategic Planning:Focus is on the creation of the plan as the ultimate objective.
Key Skills in Strategic Thinking
Skill 1
Strategic thinkers have the ability to use the left (logical) and right (creative) sides of their brain. This skill takes practice as well as confidence and can be tremendously valuable.
Skill 2
They have the ability to develop a clearly defined and focused business vision and personal vision. They are skilled at both thinking with a strategic purpose as well as creating a visioning process. They have both skills and they use them to complement each other.
Skill 3
They have the ability to clearly define their objectives and develop a strategic action plan with each objective broken down into tasks and each task having a list of needed resources and a specific timeline.
Skill 4
They have the ability to design flexibility into their plans by creating some benchmarks in their thinking to review progress.
Skill 5
They are amazingly aware and perceptive.
Skill 6
They are committed lifelong learners and learn from each of their experiences. They use their experiences to enable them to think better on strategic issues.
Skill 7
The best and greatest strategic thinkers take time out for themselves.
Skill 8
They are committed to and seek advice from others.
Skill 9
They have the ability to balance their tremendous amount of creativity with a sense of realism and honesty about what is achievable in the longer term.
Skill 10
hey have the ability to be non-judgmental and they do not allow themselves to be held back or restricted by judging their own thinking or the thinking of others when ideas are initially being developed and shared.
Skill 11
They have the ability to be patient and to not rush to conclusions and judgments.
How to Develop Strategic Thinking Skills
How to develop your skills
• Challenge conventional thinking• Read the environment of today and anticipate the
environment of tomorrow• Weigh risks against the potential rewards• Understand the drivers, strengths, and vulnerabilities of any
situation or business condition• Articulate your strategies so everyone understands• Avoid costly mistakes using “what-if” thinking• Align strategic decisions with critical goals
Who is not a strategic thinker?
1.Wants to limit strategic conversations to senior management
2.Shuns thinking and perspectives from others 3.Doesn’t respect other business functions in the
organization 4.Has a reputation for poor strategic relationships
in the organization 5.Feels strategy is complex (or has to be complex
to be good)
Who is not a strategic thinker?6.Disconnects strategy from day-to-day organizational activities 7.Doesn’t understand his/her own personal limitations and
thus doesn’t compensate for the limitations with a strong, complementary team
8.Becomes easily focused on a personal view of ” reality” and can’t entertain alternative possibilities
9.Is uncomfortable considering multiple ideas and possibilities for addressing a situation
10.Won’t break or even bend an arbitrary rule that doesn’t make sense
Who is not a strategic thinker?11.Is unwilling to question the status quo 12.Is put off by questions from people considered
subordinates 13.Is quick to cut off exploration of multiple alternatives
in the interest of not over thinking things 14.Struggles to shift between taking time to explore new
ideas and then moving to prioritize ideas and make decisions
15.Automatically equates “strategic” with long- term and “tactical” with short-term
Who is not a strategic thinker?16.Struggles with the idea of serving those seen as
subordinates 17.Is reluctant to do homework to help prepare others to
make solid decisions and implement them successfully 18.Struggles to make challenging decisions 19.Spends too much time on easy, solvable issues that
don’t produce value for the organization or its customers 20.Spends more time talking than asking questions to
better understand situations
Who is not a strategic thinker?21.Shuts down when faced with dramatic changes to a
personal view of reality and/or what’s necessary to sustain that reality
22.Doesn’t function well when there are significant unknowns in a situation
23.Automatically views doing something new / different as better than doing the smartest thing
24.Automatically views doing the same thing as better than doing something different because of lesser perceived risk
25.Loses track of agreed to priorities – for whatever reason
Who is not a strategic thinker?26.Spends too time on things that don’t matter
for the organization 27.Struggles to generalize situations so they are
more understandable to non- experts 28.Is quicker to argue than finding ways to
agree 29.Tends to dominate conversations