Strategy: A View From the Top. Team 3 Randy Greinert Mason Mitchell Sarah Yelverton Alec Cooper. A View From the Top. Positioning a company for competitive advantage by focusing on unique ways to create value for customers. Mission Vision Strategic intent Stretch.
Strategy: A View From the Top
Positioning a company for competitive advantage by focusing on unique ways to create value for customers.
Slowing down the erosion process by protecting current sources of advantage against the actions of competitors.
Investing in new capabilities that form the basis for the next position of competitive advantage.
Level five leadership must be obtained before an overall strategy can be developed
Financial gain is not as important as long term benefit of the company
With the correct management in the correct places, management complications hurting the firm will cease.
Driving success towards a goal, or hedgehog.
Going back to BOS and steering the firm to a blue ocean un dominated by the cut throat business world of today.
Understand technology and the business environment.
What drives you, $?
Products (wine, beer, and spirits)
Customers ( +21, Drinkers, segmented )
Stage in the production-distribution
Intro- High level of uncertainty
Growth- Most intense competition
Mature- Sales growth stagnant
Declining- Industry considered unattractive
Example- Bud Light Lime
1- How valuable is a resource; does it help build and sustain competitive advantage?
2- Is this a unique resource or do other competitors have similar resources?
3- Is the strategic resource easy to imitate?
4- Is the company positioned
to exploit the resource?
First and foremost – Companies are run by and for people
Understanding people’s aspirations and concerns and capabilities is key to determine strategic position
Execs report that their company receives $33 for every $1 invested in employee education
Include a firm’s knowledge and intellectual capital base
Reputation with customers partners suppliers and the financial community
Specific competencies processes and skills sets
And its corporate culture
Nature of the Industry
Company’s Mission, Goals and Objectives
Competitors’ strategic choices
Which one do you choose?
Low cost production and differentiation are mutually exclusive, and when they exist together they result in sustained profitability.
Differentiation can permit a firm to attain a low-cost position.
The possibility of providing both improved quality and lower costs exists within the total quality management framework.
Emerging Industries- presents new opportunities
Ex: Solar energy and Internet technology
Growth Industries- challenges are faced as firms transition to market maturity
Mature and Declining Industries- important to choose balance between differentiation and costs
Fragmented Industries- thriving requires creative strategy
Deregulating Industries- the removal of government rules and regulations that constrain a market force has reshaped several industries
Ex: AT&T quickly reduced prices to high-volume buyers to counter
MCI and Sprints aggressive marketing efforts
Hypercompetitive Industries- companies disrupts the market with quick and innovative change to gain advantage over competitors
-Least understood critical success factor
-“MillerCoors will have more flexibility and resources for brand-building initiatives and increased levels of innovation in taste, product attributes and packaging”
1. Products must be truly innovative
2. Innovative products must be commercialized once one the market
3. Products must be introduced into the market in a timely manner
-To improve performance through innovation: plan synergy between strategy and innovation, and involve customers early and often
Ex: Australia-Mining and US-Agriculture
Include: climate, minerals, skill levels, capital, infrastructure, etc.
1.) Market Drivers: Evolution of customer needs, Global Channels and Transferability
There is an important need to meet customers expectations, Hamburgers in India
2.) Economic Drivers: Nature of the industry, Economies of scale/ location, Differences in country costs
3.)Competitive Drivers: Interdependence between countries/ regions and globalization of competitors
4.)Government Drivers: trade barriers, regulatory climate, and technology/standards
Economies of scale and scope
Economies of scale- unit cost of performing an activity decreases as the scale of the activity increases
Economies of scope- when the unit of cost of an activity falls because the asset used is shared with some other activity
Most valuable customers
Most valuable products
Most important channels
Their distinctive capabilities
Defining core is important because there is a tendency to under exploit the full potential.
There is increasing returns to leadership instead of a linear relationship
Molson Coors started defined cost reduction as part of the core. Saving 178 million in 2007
Build Buy or Bond
-Organic or internal growth
-growth through acquisitions
-growth through alliance-based initiatives
MillerCoors alliance started in order to compete with Anheuser Busch
Concentrated growth- a corporation that continues to direct its resources to the profitable growth of a single product category in a well defined market
Vertical integration- if Coors were to buy farms to grow hops
Horizontal integration- if Coors started making and selling Koozies also if they set up a wider number of plants
Diversification strategies- were good at making beer we would be good at making cars
Why would you do this
Early perspective: structure follows strategy-build and set up the company to followstrategy
General electric business screen
-uses long term industry attractiveness
-recognizes that a corporations ability to extract value from a business unit should be benchmarked
Plots business on stage of industry's evolution and strength of company’s competitive position
Deciding on an overall, theoretically consistent, quantitative methodology for evaluating a complex corporate strategy proposal involving multiple options is not a simple undertaking.
How to run a company will always require keen managerial insight, intuition, and creativity.