What is strategy?
Definition: strategy is what we want to do, what we want our organization to be & where we want it to go.
Why do we need a strategy?
- for understanding our position in the market place - to give some sense of direction - focusing on key issues
What does a strategy involve:
- Where are we now & how did we get there? What did we do well or badly to arrive at our current position - What business are we in? Will this remain the same or will we need to change over business? If so, what? - What factors, internal or external to the organization will or can have a telling impact on what we do in the future?
The steps written in “What does a strategy involve” above are a continuous process.
Where does strategy fit:
# Growth model
Growing market share by reduction in production cost & increasing sales # Porter’s 5 forces model: # Growth by Mergers, Acquisitions & Takeovers [Inorganic growth model] - GE / Mckinsey Model [latest] - BCG [old strategic tool] - Value Chain –Porter - Core Competitiveness – C K Prahlad/ Gary Hamel
- GE / Mckinsey Model
It’s also called as Product Portfolio Matrix.
- Value Chain
- Core Competitiveness
- How does activity “X” significantly improve the end product for the customer?
- Does “X” offer access to a range of application & needs?
- What would happen to our competitiveness if we lost our strength in “X”?
- How difficult is it for others to imitate activity “X” & compete with us?
- 7S – Mckinsey
Strategists: Ansoff, Porter, Prahlad, Hamel, Mintzberg, Goldratt, Tom Peters
Guidelines for strategic formulation: - be different - learn from the past - change continuously - be innovative - involve people [CFT – cross functional team]
Strategic analysis: - external environment – SLEPTW analysis - internal environment – SWOT - competition – 5 forces model
While making a strategy, look for the following perspectives also: - strategic horizon - alternate strategy - leadership - customers - people - control - integration - processes - results
During the process of strategic formulation: - seriously question - involve everyone - avoid “paralysis by analysis” - encourage & foster innovation & creativity - go for a balance - embrace conflict - remember that strategy never stops
4 types of organizations: - short lived - watchers - learning organizations & - movers
Strategic formulation & implementation:
Learning strategy framework