Disclaimer: This is work in progress intended to consolidate information from various sources.
Last updated: 18-Mar-2024
Strategy
- {definition} "the determination of the long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals" [4]
- {goal} bring all tools and insights together to create an integrative narrative about what the organization should do moving forward [1]
- a good strategy emerges out of the values, opportunities and capabilities of the organization [1]
- {characteristic} robust
- {characteristic} flexible
- {characteristic} needs to embrace the uncertainty and complexity of the world
- {characteristic} fact-based and informed by research and analytics
- {characteristic} testable
- {concept} strategy analysis
- {definition} the assessment of an organization's current competitive position and the identification of future valuable competitive positions and how the firm plans to achieve them [1]
- done from a general perspective
- in terms of different functional elements within the organization [1]
- in terms of being integrated across different concepts and tools and frameworks [1]
- a good strategic analysis integrates various tools and frameworks that are in our strategist toolkit [1]
- approachable in terms of
- dynamics
- complexity
- competition
- {step} identify the mission and values of the organization
- critical for understanding what the firm values and how it may influence where opportunities they look for and what actions they might be willing to take
- {step} analyze the competitive environment
- looking at what opportunities the environment provides, how are competitors likely to react
- {step} analyze competitive positions
- think about own capabilities are and how they might relate to the opportunities that are available
- {step} analyze and recommend strategic actions
- actions for future improvement
- {question} how do we create more value?
- {question} how can we improve our current competitive position?
- {question} how can we in essence, create more value in our competitive environment
- alternatives
- scaling the business
- entering new markets
- innovating
- acquiring a competitor/another player within a market segment of interest
- recommendations
- {question} what do we recommend doing going forward?
- {question} what are the underlying assumptions of these recommendations?
- {question} do they meet our tests that we might have for providing value?
- move from analysis to action
- actions come from asking a series of questions about what opportunities, what actions can we take moving forward
- {step} strategy formulation
- {step} strategy implementation
- {tool} competitor analysis
- {question} what market is the firm in, and who are the players in these markets?
- {tool} environmental analysis
- {benefit} provides a picture on the broader competitive environment
- {question} what are the major trends impacting this industry?
- {question} are there changes in the sociopolitical environment that are going to have important implications for this industry?
- {question} is this an attractive market or the barrier to competition?
- {tool} five forces analysis
- {benefit} provides an overview of the market structure/industry structure
- {benefit} helps understand the nature of the competitive game that we are playing as we then devise future strategies [1]
- provides a dynamic perspective in our understanding of a competitive market
- {question} how's the competitive structure in a market likely to evolve?
- {tool} competitive lifestyle analysis
- {tool} SWOT (strengths, weaknesses, opportunities, threats) analysis
- {tool} stakeholder analysis
- {benefit} valuable in trying to understand those mission and values and then the others expectations of a firm
- {tool} capabilities analysis
- {question} what are the firm's unique resources and capabilities?
- {question} how sustainable as any advantage that these assets provide?
- {tool} portfolio planning matrix
- {benefit} helps us now understand how they might leverage these assets across markets, so as to improve their position in any given market here
- {question} how should we position ourselves in the market relative to our rivals?
- {tool} capability analysis
- {benefit} understand what the firm does well and see what opportunities they might ultimately want to attack and go after in terms of these valuable competitive positions
- via Strategy Maps and Portfolio Planning matrices
- {tool} hypothesis testing
- {question} how competitors are likely to react to these actions?
- {question} does it make sense in the future worlds we envision?
- [game theory] pay off matrices can be useful to understand what actions taken by various competitors within an industry
- {tool} scenario planning
- {benefit} helps us envision future scenarios and then work back to understand what are the actions we might need to take in those various scenarios if they play out.
- {question} does it provide strategic flexibility?
- {tool} real options analysis
- highlights the desire to have strategic flexibility or at least the value of strategic flexibility provides
- {tool} acquisition analysis
- {benefit} helps understand the value of certain action versus others
- {benefit} useful as an understanding of opportunity costs for other strategic investments one might make
- focused on mergers and acquisitions
- {tool} If-Then thinking
- sequential in nature
- different from causal logic
- commonly used in network diagrams, flow charts, Gannt charts, and computer programming
- {tool} Balanced Scorecard
- {definition} a framework to look at the strategy used for value creation from four different perspectives [5]
- {perspective} financial
- {scope} the strategy for growth, profitability, and risk viewed from the perspective of the shareholder [5]
- {question} what are the financial objectives for growth and productivity? [5]
- {question} what are the major sources of growth? [5]
- {question} If we succeed, how will we look to our shareholders? [5]
- {perspective} customer
- {scope} the strategy for creating value and differentiation from the perspective of the customer [5]
- {question} who are the target customers that will generate revenue growth and a more profitable mix of products and services? [5]
- {question} what are their objectives, and how do we measure success with them? [5]
- {perspective} internal business processes
- {scope} the strategic priorities for various business processes, which create customer and shareholder satisfaction [5]
- {perspective} learning and growth
- {scope} defines the skills, technologies, and corporate culture needed to support the strategy.
- enable a company to align its human resources and IT with its strategy
- {benefit} enables the strategic hypotheses to be described as a set of cause-and-effect relationships that are explicit and testable [5]
- require identifying the activities that are the drivers (or lead indicators) of the desired outcomes (lag indicators) [5]
- everyone in the organization must clearly understand the underlying hypotheses, to align resources with the hypotheses, to test the hypotheses continually, and to adapt as required in real time [5]
- {tool} strategy map
- {definition} a visual representation of a company’s critical objectives and the crucial relationships that drive organizational performance [2]
- shows the cause-and effect links by which specific improvements create desired outcomes [2]
- {benefit} shows how an organization will convert its initiatives and resources–including intangible assets such as corporate culture and employee knowledge into tangible outcomes [2]
- {component} mission
- {question} why we exist?
- {component} core values
- {question} what we believe in?
- ⇐ mission and the core values remain fairly stable over time [5]
- {component} vision
- {question} what we want to be?
- paints a picture of the future that clarifies the direction of the organization [5]
- helps-individuals to understand why and how they should support the organization [5]
References:
[1] University of Virginia (2022) Strategic Planning and Execution (MOOC, Coursera)
[2] Robert S Kaplan & David P Norton (2000) Having Trouble with Your Strategy? Then Map It (link)
[3] Harold Kerzner (2001) Strategic planning for project management using a project management maturity model
[4] Alfred D Chandler Jr. (1962) "Strategy and Structure"
[5] Robert S Kaplan & David P Norton (2000) The Strategy-focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment
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