Outline

1. Outline • Background: Strategy - A conceptual framework, the big issue is executing strategy • Strategy Maps: The 1st step to executing strategy is describing strategy • Alignment: Internal alignment of performance drivers with customer value proposition is source of competitive advantage • Cause-effect: Strategy is a hypothesis, test it out analytically @Ashok K. Sar

2. Strategy Execution • What: Less than 10% strategies effectively formulated are executed effectively • Why: • Problem of description • Lack of understanding … 95% of workforce • Inability to link with budgets … 60% of organi zations • Spending less than 1 hour per month discussing strategy … 85% of executive teams  @Ashok K. Sar

3. Strategy: A conceptual frameworkV.I.P. • Creating and sustaining competitive advantage • Managing Value • Managing Imitation • Managing Perimeter • Strategic positions • Best products • Total customer solutions • Systems Lock-in @Ashok K. Sar

4. Value Customer Willingness To pay Value captured by customers Price Total Value Value captured by firm Cost – Amount Paid to employees And suppliers Value captured by suppliers Supplier’s Cost (or Opportunity cost) @Ashok K. Sar

5. Added Value – Two Competitors Willingness to pay for Harnischfeger crane = $ 7.5 m Supplier opportunity cost Harnischfeger crane = $ 2 m Total value created = $ 5.5 m Harnischfeger Added value = $ 0 mn. Total value created = $ 5.5 m Willingness to pay for Kranco crane = $ 7.5 m Supplier opportunity cost Kranco crane = $ 2 m Supplier opportunity cost Harnischfeger crane = $ 3 m Willingness to pay for Harnischfeger crane = $ 9 m Harnischfeger Added value = $ .5 mn. Total value created = $ 6 m Total value created = $ 5.5 m Willingness to pay for Kranco crane = $ 7.5 m Supplier opportunity cost Kranco crane = $ 2 m

6. Managing Imitation • Basing value creation on broad range of resources & capabilities which are imperfectly tradable, imitable & substitutable, & superior fit • Internal accumulation - combining tradable inputs with existing asset stocks and learning by doing and not endowment, sharing or acquiring • Think of : 10 R&C being imitated to the extent of 80% = Total imitation of ?  @Ashok K. Sar

7. Managing Perimeter • Products • Geographic territories • Value chain activities  @Ashok K. Sar

8. Describing Strategy @Ashok K. Sar

9. Describing Strategy Fiduciary Perspective Customer Perspective Internal Perspective Learning & Growth Perspective @Ashok K. Sar

10. Strategy Maps @Ashok K. Sar

11. AlignmentDesigning a Strategy Map -> Balanced Scorecard • Are financial objectives clearly defined? • Is the customer value proposition clearly defined? • Are key business processes aligned with each customer value proposition & financial objectives? • Are the human capital & information capital aligned with key business processes? • Is the organization capital aligned with a strategic change agenda?  @Ashok K. Sar

12. Building Personal Scorecards • Cross functional team • Short duration • Full time • Clear deliverables • Cause and effect tree • Criteria • Building team scorecard • Create linkage to performance appraisal • Implementation Tool kit  icfai