Contemporary Strategy Analysis: Concepts, Techniques, Applications

1. Contemporary Strategy Analysis: Concepts, Techniques, Applications Week 1: Intro

2. Instructor: Steven Gilman v: 415-387-0449 e: sgteach@ satoritrading.com www.satoritrading.com/ggu362 hrs: 2 - 7p m-f

3. Introduction • intro • course syllabus • teams • case study overview • chap 1 • assignments • team selection • wrap

4. CHAPTER 1 Concept

5. The Concept of Strategy OUTLINE • The role of strategy in success • A framework for strategy analysis • The evolution of strategic management • Corporate strategy and business strategy • Strategy making: Design or process? • The role of strategy

6. Elements of Success MADONNA GIAP & NORTH ALEX FERGUSON VIETNAMESE MILITARY & MAN UNITED GOALS Single-minded quest for Reunification of Vietnam Success in soccer—an stardom. under Communist rule. escape route from poverty in Glasgow UNDERSTANDING Identified emerging trends Intimate knowledge of terrain. Clear recognition of THE in popular culture. Understanding U.S. political importance of discipline, ENVIRONMENT Recognized power of sex. system. training, motivation, & Understood showbiz competitive intelligence distribution channels. RESOURSE Recognized limited raw Recognized economic and Combined internal devel- APPRAISALtalent. Relied on strengths military weaknesses and opmentof skills with in self-promotion, image- political strengths. acquisition of key players. creation, relationship Nurturing of team management capabilities IMPLEMENT- Commitment to hard work. Tight control. Long-term Effectiveness in motivating ATION Disciplined, inspirational commitment. Effective players, demonstrating Leadership. Attention to propaganda. Inspirational commitment. detail. leadership.

7. Common Elements in Successful Strategy Successful Strategy EFFECTIVE IMPLEMENTATION Long-term, simple and agreed objectives Profound understanding of the competitive environment Objective appraisal of resources

8. What is Strategy? • Distinguishing strategy from tactics: • Strategy is the overall plan for deploying resources to establish a favorable position. • Tactic is a scheme for a specific maneuver. • Characteristics of strategic decisions: • Important. • Involve a significant commitment of resources. • Not easily reversible.

9. The Evolution of Strategic Management 1950s 1960s Early-mid Late1970s Late 1980s Late 1990s 1970s early 1980searly 1990s early 2000s Budgetary Corporate Corporate Analysis of Quest for Strategic planning & planning strategy industry & competitive innovation control competition advantage The “New Economy” Financial controlPlanning growth Diversifica- Positioning Competitive Innovation & ion advantage knowledge Budgeting Forecasting & Portfolio Analysis of Resource Dynamic project appraisal investment planning. industry & analysis. sources of planning Synergy competition Case advantage market competences Knowledge share management cooperation Emphasis on Rise of Diversifi- Industry/market Restructuring Virtual orga- financial corporate planning cation. selectivity.BPR. nization. management departments Quest for Active asset Refocusing Alliances & formal global management Outsourcing Quest for planning market sharecritical mass DOMINANT THEME MAIN ISSUES CONCEPTS & TECHNIQUES IMPLEMENT- ATION

10. The Turbulent 90s The Death of Communism The Turmoil in Russia The End of Apartheid Sclerosis in Japan International competition intensifies Stock Market Goes Bananas DJIA 1/1/90: 2,765 31/12/99: 11,425 The Horror of Yugoslavia Financial Crisis in Asia Volatile Oil 9/1990: $34 12/1998: $10 12/1999: $30 Advent of the Internet Bloodbath in Rwanda Unstable Currencies Yen/$ from 87 to 148 (1997-98)

11. The Basic FrameworkStrategy: the Link between the Firm and its Environment THE FIRM Goals & Values Resources & Capabilities Structure & Systems THE INDUSTRY ENVIRONMENT Competitors Customers Suppliers STRATEGY STRATEGY

12. Sources of Superior Profitability INDUSTRY ATTRACTIVENESS Which businesses should we be in? CORPORATE STRATEGY RATE OF PROFIT ABOVE THE COMPETITIVE LEVEL How do we make money? COMPETITIVE ADVANTAGE How should we compete? BUSINESS STRATEGY

13. Strategy Making : Design or Process? Strategy as Design Strategy as Process Planning and rational choice Many decision makers responding to multitude of external and internal forces INTENDED STRATEGY EMERGENT STRATEGY REALIZED STRATEGY • Mintzberg’s Critique of Formal Strategic Planning: • The fallacy of prediction –the future is unknown • The fallacy of detachment -- impossible to divorce formulation from • implementation • The fallacy of formalization --inhibits flexibility, spontaneity, • intuition andlearning.

14. Strategy Making Processes within the Company: Multiple Roles of Strategy Strategy as Decision Support Improves the quality of decision making Strategy as Coordination and Communication Creates consistency and unity Improves perform- ance by setting high aspirations Strategy as Target

15. The Role of Analysis • Strategy analysis improves decision processes, but doesn’t give answers. • Strategy analysis assists us to identify and understand the main issues. • Strategy analysis helps us to manage complexity. • Strategy analysis can enhance flexibility and innovation by supporting learning.