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Closing shot!What have we learned over the course?
William Meaney - MBA, BSc, ACMA 2
Definitions
Strategy: course of action , including the specification of resources, required to achieve a specific objective.
Strategy: the mediating force or “match” between the organisation and the environment. Heofer and Schendel
SW OT
Strategy is a pattern in a stream of decisions. Henry Mintzberg
Resources6 Ms
EnvironmentPESTEL, Industry
3
ABC Ltd
2015
ABC Ltd 2020
Environment
Resources
The purpose of strategy is to enhance the long term profitability of an organisation.
Strategy is a process not an event
William Meaney - MBA, BSc, ACMA
4William Meaney - MBA, BSc, ACMA
Levels of Strategy
5William Meaney - MBA, BSc, ACMA
11
Benefits of Strategy - What makes it relevant!
• Framework for Analysis , Planning, Control.
• Way of viewing industry, competition.
• Identifies best practice in multiple disciplines.
• Way of assessing problems / tools for solutions.
• Better resource allocation. Risk assessment , critical thinking.
• Creates common mission/objectives.
• Common language of strategy.
• Textbook to workplace application.
William Meaney - MBA, BSc, ACMA
Developing a Strategic Vision and Mission and Objectives
• Involves thinking strategically about• Firm’s future business plans• Where to “go”
• Tasks include• Creating a roadmap of the future• Deciding future business position to stake out• Providing long-term direction• Giving firm a strong identity
7William Meaney - MBA, BSc, ACMA
William Meaney - MBA, BSc, ACMA 8
Characteristics of objectives1. Hierarchical - from the top down.
2. Consistent - groups of objectives internally
consistent.
3. Realistic - essential to motivate.
4. Quantitative - basis for performance
measurement.
5. Time frame - targets to be achieved within
a given time.
SMART
Specific
Measurable
Attainable
Realistic -results oriented
Time- bounded
William Meaney - MBA, BSc, ACMA 9
Two Types of Objectives Are Required
Outcomes that improve a firm’s financial performance
Outcomes that strengthen a firm’s competitiveness and long-term market position
Financial Objectives Strategic Objectives
$
William Meaney - MBA, BSc, ACMA 10
The Stakeholder ModelStakeholder theory: corporations should be socially responsible institutions managed in the public interest. Many organizational constituencies have interests other than maximizing firm profits.
Firm
PoliticalGroups
InvestorsGovernments
Suppliers Customers
Trade Associations
CommunitiesEmployees
(SOURCE: Donaldson, T. and L.E. Preston. 1995. “The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications.” Academy of Management Review 20:65-91.)
Source: Adapted from A. Mendelow,.
A B
C D
Minimaleffort
Keepinformed
Keepsatisfied
Keyplayers
Low
High
POWER
LEVEL OF INTERESTLow High
Stakeholder mapping: the power/interest matrix - Source Johnson,Scholes and Whittington
Mendelow’s Grid
“The Business of Business is Business.”Milton Friedman
Satisficing shareholders? Baumol
Build a technostructure? J.K. Galbraith
CSR are grounded by opposing objectives and views
(Maximize Profits to Balance Profits with Social Responsibility)
William Meaney - MBA, BSc, ACMA 13
PHILANTHROPICResponsibilities
Be a good Corporate Citizen.Contribute resources to the
community; improve quality of life.
ETHICALResponsibilities
Be ethical.Obligation to do what is right,
just and fair; Avoid harm.
LEGALResponsibilities
Obey the LawLaw is society’s codification of right and wrong;
Play by the rules
ECONOMICResponsibilities
Be ProfitableThe foundation upon which all others rest
Source: Carroll (1991)
The Pyramid of Social Responsibility
Macro environment – PESTEL (1)
JSW Adapted William Meaney MBA BSc. ACMA 15
Porter’s Competitive Forces Model
The Five Generic Competitive Strategies
William Meaney MBA BSc. ACMA 17
Source: Based on the work of Cliff Bowman. .
4
5
6
8
7
PRICE HighLow
DifferentiationFocuseddifferentiation
Low price/low added value
Strategiesdestined forultimate failure
PERCEIVEDADDEDVALUE
Hybrid
Lowprice
High
Low
1
2
3
The strategy clock: Bowman’s competitive strategy options
William Meaney MBA BSc. ACMA 18
5. How will our competitors respond if attacked Identifying a competitors response profile
William Meaney MBA BSc. ACMA 19
4. Future goals?
What drives the competitors
2. Capabilities
What strengths and weaknesses does the competitor possess.What are the resource capabilities
3. What assumptions does the competitor hold about the industry?Are the assumptions realistic
1. Current strategy. How is the competitor currently competing and what levels of success
Competitor’s Response Profile
• At what point will the competitor respond if challenged?
• How expansionist is the competitor likely to be?
• What likely moves or strategy shifts will the competitor make in the long run?
• Where is the competitor most vulnerable?
• What will provoke the greatest reaction by the competitor?
• Where do we hold advantages?
• Can we change the relationship with our competitors?
Approach to competitor analysis
.
William Meaney MBA BSc. ACMA 20
Industry analysis Industry mapping
Critical success factors
Competitor profiling
Special competitor analysis
Value chain analysis
Benchmarking
Building competitive advantage
Internal information
DeskResearch Databases
Market Research
The Value Chain
Source: M.E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance, Free Press, 1985. Used with permission of The Free Press, a division of Simon & Schuster, Inc. © 1985, 1988 by Michael E. Porter. All rights reserved.
William Meaney MBA BSc. ACMA 21
22
BCG Product/SBU designations for action
Industrygrowth rate
HIGH
LOW
HIGH LOW
Relative Market Share
StarsMaintain orincrease market share
Cash cowUse profits to maintain growthMaintain position
Question markIntensify marketing effortor leave market
DogReduce marketingeffort or divest
William Meaney MBA BSc. ACMA
GE Multifactor Portfolio Matrix
William Meaney MBA BSc. ACMA 23
SWOT
External Assessment Marketplace, competitor’s, social trends, technology, regulatory environment, economic cycles.
Internal Assessment Organisationalassets, resources, people, culture, systems, partnerships, suppliers etc.
Convert
Match
Strengths• Financial • Marketing• Production• 6Ms analysis
Weaknesses• Financial• Marketing• Production
Opportunities• Political & legal• Economic• Social• Technological
Threats • Political & legal• Economic• Social• Technological
Internal
External
William Meaney MBA BSc. ACMA 24
The Critical Success Factors Approach
William Meaney MBA BSc. ACMA 25
Identify the specific factors most responsible for the organisation to achieve its goals – Example Ryanair
Determine the CSF (load factor) for monitoring each business area and suitable KPIs (average ticket price, revenue per customer etc.)
Define the data requirements for measuring each KPI - Tickets sales per flight / number of passengers
Develop prototype system - DashboardModify prototype based on user feedback – update as required.
Strategic Choice
William Meaney MBA BSc. ACMA 26
Ansoff’s Product market growth matrix – Options
Present
MARKETS
New
New Product developmentMarket Penetration• Reduce price• Advertising• Sales promotion• Free trial• Branding• Build customer loyalty
Market Development• New Segments• New channels of distribution• New markets regionally,
nationally, internationally• New methods – internet
Diversification• Acquisition/Merger• Licence• Franchise • Joint ventures• Strategic Alliances
Products/ServicesPresent New Booz
Allen Hamilton
William Meaney MBA BSc. ACMA 27
Ansoff’s Product market growth matrix- DiversificationPresent
MARKETS
New
New Product developmentMarket Penetration
Market Development Diversification
Products/ServicesPresent New
William Meaney MBA BSc. ACMA 28
Concentric
Integration Backward
Horizontal
Forward Lateral
Related diversification Unrelated Diversification
Strategic Choice Growth options
Porters Generic Strategies
Ansoff’s Matrix
AcquisitionsMergerLicenceFranchiseJoint VenturesStrategic AlliancesDivestmentSub contractingContract Manufacture.OutsourcingMBO etc.
Suitable
Appropriate
Feasibility
Financial DecisionalModels• Pro forma
accounts• Capital budgeting• Capital
Investment appraisal
• NPV etc.• Decision trees• (EMV) Expected
Monetary Values
Basis Means Options
Generation of Options Evaluation of options Selection of Strategy
Own and control
Shared ownership and control
Have use of
William Meaney MBA BSc. ACMA 29
Strategic Implementation
People and Systems
• Organisational Cultureand Values
• Change management
Organisation structure
• Organisation structure
• Strategy v Structure
• Mintzbergs Organisational fit
Resource planning• Budgeting• Resource allocation• Project management• Balanced Scorecard • Performance monitoring
William Meaney MBA BSc. ACMA
Strategic Implementation
31
Balanced scorecard
Strategy implementation
Final thoughts
StrategicMarketing
Change management
Project management
MotivationOrganisation structure and
design
Culture and values
LeadershipHuman Resources
Strategic IT
Resource allocation
William Meaney MBA BSc. ACMA
Cause of change Affects
Change
Interdependencies
Conflicts and frustrations
Time lags
Triggers
Structure
Business
People
Technology
William Meaney MBA BSc. ACMA 32
Force field analysis
Restraining forcesAssist
William Meaney MBA BSc. ACMA 33
Driving forces
• Anxiety about job security• Change seems less stimulating• Fear of loss of power status. • Cynicism about change
‘another fad’• Existing systems are sufficient.• Trade union concerns• Cost of reviews• Complexity of work
• Fresh challenge in the job.• Improved rewards
• Increased job discretion
• New legislation requirement• Report to external agencies.
• Concern for quality.
Restraining and Driving forces for change
Current state
ResistanceIdeal
Managing the change process
William Meaney MBA BSc. ACMA 34
Unfreeze
To new desired behaviourExisting behaviour
Change Refreeze
Attitudinal behavioural change
Selling the change
• Challenge the currentways
• Power structure alterations
Positive reinforcement• Reward the positive
acceptance
Communication
Encouragement
Functional
Advantages• Chief executive in touch with all
operations• Reduces/simplifies control
mechanisms• Clear definition of responsibilities• Specialists at senior and middle
management levels
Disadvantages• Senior managers overburdened
with routine matters• Senior managers neglect strategic
issues• Difficult to cope with diversity• Coordination between functions is
difficult• Failure to adapt
William Meaney MBA BSc. ACMA 35
Chief executive
Personnel ProductionFinanceMarketing
Mintzbergs five design configurations• The Strategic Apex
Top level managers with overall responsibility for the organisation• Middle line managers
Managers who connect the Strategic apex to the operating core• Technostructure
Analysts who have responsibility for affecting certain formsof standardisation in the organisation
• Support staff People who provide indirect services for the organisation
• The Operating Core Employees who perform the basic work related to the
productionof goods and services
William Meaney MBA BSc. ACMA 36
Style theories of Leadership
William Meaney MBA BSc. ACMA 37
Successful business leader• Jack Welch at GE• Michael O Leary at Ryanair• Steve Jobs at Apple• Ralph Halpern at Burtons• Ann Heraty at CPL recruitment?(key organisation in analysis of the recruitment industry)
• Lee Iacocca at Chrysler• Willie Walsh at British Airways• Terry Leahy at Tesco• Stuart Rose at M&S • Denis O Brien at ESAT
William Meaney MBA BSc. ACMA 38
William Meaney MBA BSc. ACMA 39
Principles of the Strategy Focused Organization:TRANSLATE THE STRATEGY TO OPERATIONAL TERMS
� Measurement is the language that gives clarity to vague concepts.
� Measurement is used to communicate, not to control.
� Building the scorecard develops consensus and teamwork throughout the organization
"If we succeed, how will we look to our shareholders?”
The Strategy
Financial Perspective
"To achieve my vision, how must I look to my
customers?”
Customer Perspective
"To satisfy my customer, at which processes must
I excel?”
Internal Perspective
"To achieve my vision, how must my organization learn
and improve?”
Organization Learning
William Meaney MBA BSc. ACMA 40
William Meaney MBA BSc ACMA 41
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Linking the reward system to strategic outcomesProperly designed reward system is management's most powerful strategy implementation tool.
Guidelines• Performance must be major piece of the total compensation package.• Should extend to all employees not just top management but reward
performers only.• Administer with utmost equity and fairness.• Incentives linked tightly to targets in the strategic plan.• Performance targets for individuals should involve what the individual
has control over• Keep time between performance and reward to an absolute minimum.• Combine monetary and non-monetary rewards.
William Meaney MBA BSc ACMA
Constraints on project management
William Meaney MBA BSc. ACMA 43
‘Strategy is a process not an event’• Planned• Resourced• Management driven
2013
2015 20162018
2027
2020
William Meaney MBA BSc. ACMA 44
Wisdom - knowledge with insight
Knowledge - information with meaning
Information - Data with context
Data - facts and observations
The knowledge hierarchy
William Meaney MBA BSc. ACMA 45
Strategic management and strategic marketing –the link!
William Meaney MBA BSc. ACMA 46
Conclusion
• We have covered a lot of material!• About 30 topics minimum in some detail• And we have still only looked at 1exam!• All this work will ultimately come down to 3.5 hours in the not
too distant future• Select a date and start …………• …………….and soon you will be ready for your exam!