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What is Strategy?
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Dave Garten – Background Highlights
Current Faculty, PSU/OEMBA – Strategy, M&A, Negotiation, Biz Projects Consulting: management, strategy, alliances, M&A Board(s): Organically Grown Company, SeQuential, Bridlemile
Soccer, Forest Park Conservancy
Prior CEO, SeQuential Biofuels, Inc. Intel – 15 year career
General Manager Director of Business Development. >200+ alliances Marketing and product management
Engineer early-on – designed fuel injectionEducation: MBA M.I.T. 1987; BS/MS Engineering
Strategy EvolutionAncient Greece – “Startegos” –military commanderIndustrial Revolution railroads & mass markets capital , credit, large scale investment to enable economies of scale/scope high level thinking
Sloan (GM) – devised a successful strategy based on S & W of Ford segmentation and differentiation
Learning curve. Labor costs reduced at a constant rate as cumulative production doubled
B-school focused on matching S/W with O/T SWOT.Rise of strategy consultants in the 60s and 70s.
BCG BCG Growth Share matrix McKinsey SBUs
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Source: Derived from Pankai Ghemawat, Strategy and the Business Landscape
TerminologyBusiness ModelVisionMissionStrategyObjectivesTacticsEmergent Strategy
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What is a business model?
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A business model describes the rationale of how an organization creates, delivers, and captures value. The process of business model design is part of business strategy.
Customer Value Proposition
Resources
Profit Formula
Key Processes
Revenue modelCost structureMargin modelResource velocity
Wealth, access, skills or time.
Source: Derived from Johnson, Christensen, Kagermann, Reinventing Your Business Model
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Vision & Mission & Strategy“Every business, if it is to succeed,
must have a sense of direction and mission, so no matter who you are and what you are doing, you know how you fit in and that what you are doing is important.”
-- Lou Gerstner, 2002
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Vision & Mission & Strategy
Vision:
Mission:
Strategy:
Derived from Strategic Mgt by Arnoldo Hax, Strategic Mgt by Fred R. David.
X
“what do we want to become?”
“what is our business?”
“means to accomplishes objectives”
Strategy Development
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Strategy =
an objective
+ “the how”
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Strategy Development
Tangible objectives (targets) Financial Objective examples:
Achieve ROIC of 15%, AAA bond rating
Strategic Objective examples:Achieve market share of 20%, lowest unit cost
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Strategy DevelopmentHow to achieve objectives choice Using/developing a competency
Hopefully -> exploiting competitive advantage Responding to changing environment
Good Strategy 50% experience 50% data
Strategy is ½ planned -- ½ Unplanned
Strategy Example
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Levels of StrategyCorporate Strategy Overall vision, mission Kinds of business, portfolio management
Business Strategy Business vision, mission What product and/or service to offer How to manufacture, how to get to market, etc.
Functional Strategy Functional vision & mission Focused domain
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What is Good Strategy?How do you know a good strategy when you see it? Will have many of these qualities:
X
Emergent Strategy
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Strategy Development
External Analysis“Basis of Competition”
Internal Analysis“What we have”
Mission Strategy R & D SupplyMftg
SalesMktg
Coordinated action (tactics) “Translation of Strategies”
Strategic Management:•Exploit & create new and different opportunities for tomorrow•Setting up l/t success to support mission, strategies & tactics
Strategic Management:•Exploit & create new and different opportunities for tomorrow•Setting up l/t success to support mission, strategies & tactics
Frequency
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Strategy – reality checkWhat are Gerstner’s major points re: strategy?
X
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Strategic Thinking & Leadership
What is the relationship between strategic thinking & leadership?What is the relationship between strategic thinking & leadership?X
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Strategic Leadership (BA521)
Strategic Thinking and Visioning: Effective managers act with the future in mind. They plan for and make decisions within the framework of the enterprise’s strategic intent. They know and understand the factors influencing strategy (e.g., core competence, customers, competition, and the organization’s current strengths and limitations). They consider future impact when weighing decisions. Effective managers are imaginative. They are able to create a vision of a preferred future for their team. They communicate it clearly and enthusiastically in such a way that others are attracted to it. They are able to bring a vision to life for team members.
Risk-Taking: Effective managers have a history of, and propensity for, taking calculated chances to achieve goals. They find a balance between analysis and action. When they fail, they accept it, learn from it, and move on to the next challenge.
Critical Thinking Model
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Re-occurring Themes in Strategy
Change is a constantArt – not a scienceGray - not white & blackCombinations of strategies– rarely a pure single strategy determines winnersSuccessful strategies (businesses) learn, adapt and take advantage of change
![nuria@alum.mit.edu arXiv:2105.14956v1 [cs.CY] 31 May 2021](https://img.dokumen.tips/doc/110x75/61bd394561276e740b1096d0/nuriaalummitedu-arxiv210514956v1-cscy-31-may-2021.jpg)
