“brilliant strategy, more brilliant execution”
Post on 07-Jan-2016
110 Views
Preview:
DESCRIPTION
TRANSCRIPT
“Brilliant Strategy,More Brilliant Execution”
Prof. Jose. M. FaustinoAsian Institute of Management
Brilliant Strategy, More Brilliant Execution
Managers under pressure
• Adjust, anticipate, accelerate• Faster beat of the market• Replace old technologies• Faster changes• More threatening competition
Managers respond
• TQM Improving quality, do it rightfirst time, reducing waste
Brilliant Strategy, More Brilliant Execution
• Time-based competition Reduce cycle times, time to market
• Outsourcing
Reinforcing core activities, Contracting out non-core
Brilliant Strategy, More Brilliant Execution
• Benchmarking
Studying best practices, applying them to improve
• Partnering
Strategic alliances to develop products, markets technologies faster
Brilliant Strategy, More Brilliant Execution
• Reengineering
Reviewing all operations, reinventing to increase productivity
Brilliant Strategy, More Brilliant Execution
The Use of the Management tools lead to:
Operational Effectiveness
Brilliant Strategy, More Brilliant Execution
Prof. Michael Porter says:“Operational effectiveness isnot strategy.”
Example of the 1980’s:Japanese competing with superior operational effectiveness (or OE).
Brilliant Strategy, More Brilliant Execution
Result:• Global competitors respond
with TQM, reengineering, benchmarking
• They eliminate inefficiencies improve quality, enhance customer satisfaction, achieve best practice.
Brilliant Strategy, More Brilliant Execution
Brilliant Strategy, More Brilliant Execution
In the 1990’s, global competitors caught up with Japanese lead in OE.
Result: Profits have declined for the Japanese & have not recovered.
Brilliant Strategy, More Brilliant Execution
Need constant improvement in OE to achieve superior profitability. But difficult over longer run as best practices circulate and major players adapt well.
Brilliant Strategy, More Brilliant Execution
Emergence of the Value War, that no one can win. It is a Lose-Win proposition.
Brilliant Strategy, More Brilliant Execution
Yes, OE is important for success. But it is not enough, because OE is not strategy.
Brilliant Strategy, More Brilliant Execution
Unique Strategy No. 1:
Southwest Airlines, most profitable U.S. airline for the past 40 years.
Brilliant Strategy, More Brilliant Execution
Operational Effectiveness is doing similar things better than competitors.
Competitive strategy is about being different.
Brilliant Strategy, More Brilliant Execution
Full service airline:• Many points to fly• Connecting flights, hub and
spoke• First class, business class• Baggage transfer• Long flights: serve meals
Brilliant Strategy, More Brilliant Execution
Southwest Airlines strategy:• Short flights• Midsize cities • Secondary airports• Many flights per destination• Low, low price
Brilliant Strategy, More Brilliant Execution
Southwest also offers:• Online ticket purchasing• Automatic ticket machine• No meals • No interline baggage transfer• No business or first class
Brilliant Strategy, More Brilliant Execution
Competitive strategy is deliberately choosing a different set of activities to deliver a unique mix of value.
Brilliant Strategy, More Brilliant Execution
Strategic positioning begins with defining target segment and objectives to achieve.
Essence of strategy: You choose to perform activities differently than rivals do.
Brilliant Strategy, More Brilliant Execution
Southwest Airlines competition:• bus, train, PTM
Inexpensive fare
+ fun aboard= customer loyalty
SOUTHWEST AIRLINES’ ACTIVITY SYSTEM
Short-haul,point-to-point
routes betweenmidsize citiesand secondary
airports
Limited useof travelagents
Flexibleunion
contracts
Highcompensationof employees
No meals
No seatassignments
No connectionswith other
airlines
Standardizedfleet of 737
aircraft
Southwest,the low-fare
airlineHigh level
of employeestock
ownership
Automaticticketing
machines
Limitedpassenger
service
No baggagetransfers
Lean, highlyproductiveground andgate crews
Frequent,reliable
departures
15 minutegate
turnarounds
Highaircraft
utilization
Very lowticket prices
Brilliant Strategy, More Brilliant Execution
Unique Strategy No. 2:
A late entry that avoided me-too and devised a unique strategy.
Brilliant Strategy, More Brilliant Execution
Howard Schultz wanted to start his gourmet coffee chain in Seattle with a superior product, i.e., coffee manually and lovingly roasted by experts.
Brilliant Strategy, More Brilliant Execution
Schultz built his marketing concept around the superior product and developed STARBUCKS.
Brilliant Strategy, More Brilliant Execution
Schultz’ Strategic Positioning”
“Our business is not selling coffee… it is creating a consumption experience, in which coffee plays a part.”
Brilliant Strategy, More Brilliant Execution
Schultz: “A visit to Starbucks is romance, theatrics, community - the totality of the coffee experience.”
Brilliant Strategy, More Brilliant Execution
The Starbucks PTM:• Yuppies 25 - 45 years• Income over $35,000• University educated• Sophisticated self perception
Brilliant Strategy, More Brilliant Execution
Starbucks’ constant interaction with customers
• Consumer education together with Starbucks’ staff
• Product testing
Brilliant Strategy, More Brilliant Execution
Starbucks’ made a study revealing it cost more to hire/train/lose than retaining employees with benefits. So now it:
• Selects, trains with care• Offers stock ownership plan
Brilliant Strategy, More Brilliant Execution
• Treats employees as assets, not expenses
• Communicates Starbucks is a career, not a stopover.
Result: low turnover, happy crew, upbeat rapport with customers
Brilliant Strategy, More Brilliant Execution
Starbucks now the dominant brand in gourmet coffee
• with little media advertising• word-of-mouth (delicious)
advertising• unique consumption
experience
The STARBUCKSConsumptionExperience
(coffee culture)
Superiorcoffee quality
One week shelflife, only fresh
coffee
Low staff turnoverwith co. ownership
leadership skills
Well designed,strategically located
coffee bars
Persuasive well trained and
motivated people
Consumereducation andacculturization
In-house only:product testing and
market research
HighPremiumpricing
Specialroastingprocess
Buying thebest coffeeworldwide
Blendingonly the
best coffees
Take-homesales of coffee andsatellite products
R & D: Specialblends, new varieties
Programs donatingto CARE in coffeesource countries
Clusteringoutlets in
same location
MAPPING STARBUCKS STRATEGY
Brilliant Strategy, More Brilliant Execution
Example No. 3Jollibee Foods Corporation
No. 1 in fast foods using anymeasure: revenue, profit,
market share, top of mind
Brilliant Strategy, More Brilliant Execution
Jollibee has always developed products following Filipino taste preferences.
Brilliant Strategy, More Brilliant Execution
Jollibee’s obsession to keep improving quality and taste. For CEO Tony Tan it is an obsession.
Brilliant Strategy, More Brilliant Execution
Invisible weapon:Jollibee’s corporate culture
• quiet, unassuming• focused on PTM• low key but professional• positive relations with
franchisees
The Jollibee Value Creation System
IT Systems• on line • processes
Service• courtesy • fast service • convenience
Cleanliness• store
design•
maintenance
Advertising, Promo& Research
Service Quality Monitoring
Franchisee Relations
StoreExpansion
Strict QualityControl
R & D• new products • new methods
Jollibee Culture
CentralCommissary
Own Bakery• buns • pies
Food Quality• delicious,
fresh• local taste
Brilliant Strategy, More Brilliant Execution
Reviewing the Unique Strategy• All three examples have OE
(but so do competitors).• But all three developed a
unique strategy no one has matched.
Brilliant Strategy, More Brilliant Execution
Excellent OE will only guarantee your survival but at a low profit.
Brilliant Strategy, More Brilliant Execution
Comparing the strategy of the 1990’s with the unique strategy model, we see significant differences.
ALTERNATIVE VIEWS OF STRATEGY
THE IMPLICIT STRATEGY MODEL OF OF THE PAST
DECADE
• One ideal competitive position in the industry
• Benchmarking of all activities and achieving best practice
• Unique competitive position for the company
• Activities tailored to strategy
SUSTAINABLE COMPETITIVE ADVANTAGE
Brilliant Strategy, More Brilliant Execution
• Aggressive outsourcing and partnering to gain efficiencies
• Advantage rest on a few key success factors, critical resources, core competencies
• Flexibility and rapid responses to all competitive and market changes
• Clear trade-offs and choices vis-à-vis competitors
• Competitive advantage arises from fit across activities
• Sustainability comes from the activity system not the parts
Brilliant Strategy, More Brilliant Execution
Operate with quality and speed, but remember, the customer of the 2000’s likes to buy from the supplier with the distinctive, if not unique, value.
Subscription
• This is a subscription group. The annual subscription is Rs. 1200 per year. (There is a money back guarantee. Any unused subscription will be gladly refunded, No reasons required but feedback would be welcomed)
Compiled for your edutainment by
LEARNING EXPERIENCESHRD SYSTEMS DESIGN
TRAINING MATERIALS AND TRAINER TRAINING
learnwithparimal@gmail.com www.academylearningresources.com
+91-9825271271
Blog: http://parimalgandhi.wordpress.com/
top related