closing shot! - studyonline.iestudyonline.ie/wp-content/uploads/2016/09/closing-shot-what-we... ·...

Closing shot!What have we learned over the course?

William Meaney - MBA, BSc, ACMA 2

Definitions

Strategy: course of action , including the specification of resources, required to achieve a specific objective.

Strategy: the mediating force or “match” between the organisation and the environment. Heofer and Schendel

SW OT

Strategy is a pattern in a stream of decisions. Henry Mintzberg

Resources6 Ms

EnvironmentPESTEL, Industry

3

ABC Ltd

2015

ABC Ltd 2020

Environment

Resources

The purpose of strategy is to enhance the long term profitability of an organisation.

Strategy is a process not an event

William Meaney - MBA, BSc, ACMA

4William Meaney - MBA, BSc, ACMA

Levels of Strategy


11

Benefits of Strategy - What makes it relevant!

• Framework for Analysis , Planning, Control.

• Way of viewing industry, competition.

• Identifies best practice in multiple disciplines.

• Way of assessing problems / tools for solutions.

• Better resource allocation. Risk assessment , critical thinking.

• Creates common mission/objectives.

• Common language of strategy.

• Textbook to workplace application.

William Meaney - MBA, BSc, ACMA

Developing a Strategic Vision and Mission and Objectives

• Involves thinking strategically about• Firm’s future business plans• Where to “go”

• Tasks include• Creating a roadmap of the future• Deciding future business position to stake out• Providing long-term direction• Giving firm a strong identity



https://www.google.ie/imgres?imgurl=http://www.svp.ie/St.VincentDePaul/media/SVP/images/General/mission.jpg&imgrefurl=http://www.svp.ie/About-Us/Mission-Statement.aspx&h=203&w=285&tbnid=-d0tQ8PicVtnJM:&docid=7qUVMwJc484bBM&ei=jVT7Vbb0EILxUqDKqvAC&tbm=isch&ved=0CBMQMygQMBA4rAJqFQoTCPbuovej_8cCFYK4FAodIKUKLg

https://www.google.ie/imgres?imgurl=http://www.svp.ie/St.VincentDePaul/media/SVP/images/General/mission.jpg&imgrefurl=http://www.svp.ie/About-Us/Mission-Statement.aspx&h=203&w=285&tbnid=-d0tQ8PicVtnJM:&docid=7qUVMwJc484bBM&ei=jVT7Vbb0EILxUqDKqvAC&tbm=isch&ved=0CBMQMygQMBA4rAJqFQoTCPbuovej_8cCFYK4FAodIKUKLg

Characteristics of objectives1. Hierarchical - from the top down.

2. Consistent - groups of objectives internally

consistent.

3. Realistic - essential to motivate.

4. Quantitative - basis for performance

measurement.

5. Time frame - targets to be achieved within

a given time.

SMART

Specific

Measurable

Attainable

Realistic -results oriented

Time- bounded


Two Types of Objectives Are Required

Outcomes that improve a firm’s financial performance

Outcomes that strengthen a firm’s competitiveness and long-term market position

Financial Objectives Strategic Objectives

$


The Stakeholder ModelStakeholder theory: corporations should be socially responsible institutions managed in the public interest. Many organizational constituencies have interests other than maximizing firm profits.

Firm

PoliticalGroups

InvestorsGovernments

Suppliers Customers

Trade Associations

CommunitiesEmployees

(SOURCE: Donaldson, T. and L.E. Preston. 1995. “The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications.” Academy of Management Review 20:65-91.)

Source: Adapted from A. Mendelow,.

A B

C D

Minimaleffort

Keepinformed

Keepsatisfied

Keyplayers

Low

High

POWER

LEVEL OF INTERESTLow High

Stakeholder mapping: the power/interest matrix - Source Johnson,Scholes and Whittington

Mendelow’s Grid

“The Business of Business is Business.”Milton Friedman

Satisficing shareholders? Baumol

Build a technostructure? J.K. Galbraith

CSR are grounded by opposing objectives and views

(Maximize Profits to Balance Profits with Social Responsibility)


PHILANTHROPICResponsibilities

Be a good Corporate Citizen.Contribute resources to the

community; improve quality of life.

ETHICALResponsibilities

Be ethical.Obligation to do what is right,

just and fair; Avoid harm.

LEGALResponsibilities

Obey the LawLaw is society’s codification of right and wrong;

Play by the rules

ECONOMICResponsibilities

Be ProfitableThe foundation upon which all others rest

Source: Carroll (1991)

The Pyramid of Social Responsibility

Macro environment – PESTEL (1)

JSW Adapted William Meaney MBA BSc. ACMA 15

Porter’s Competitive Forces Model

The Five Generic Competitive Strategies

William Meaney MBA BSc. ACMA 17

Source: Based on the work of Cliff Bowman. .

4

5

6

8

7

PRICE HighLow

DifferentiationFocuseddifferentiation

Low price/low added value

Strategiesdestined forultimate failure

PERCEIVEDADDEDVALUE

Hybrid

Lowprice

High

Low

1

2

3

The strategy clock: Bowman’s competitive strategy options


5. How will our competitors respond if attacked Identifying a competitors response profile


4. Future goals?

What drives the competitors

2. Capabilities

What strengths and weaknesses does the competitor possess.What are the resource capabilities

3. What assumptions does the competitor hold about the industry?Are the assumptions realistic

1. Current strategy. How is the competitor currently competing and what levels of success

Competitor’s Response Profile

• At what point will the competitor respond if challenged?

• How expansionist is the competitor likely to be?

• What likely moves or strategy shifts will the competitor make in the long run?

• Where is the competitor most vulnerable?

• What will provoke the greatest reaction by the competitor?

• Where do we hold advantages?

• Can we change the relationship with our competitors?

Approach to competitor analysis

.


Industry analysis Industry mapping

Critical success factors

Competitor profiling

Special competitor analysis

Value chain analysis

Benchmarking

Building competitive advantage

Internal information

DeskResearch Databases

Market Research

The Value Chain

Source: M.E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance, Free Press, 1985. Used with permission of The Free Press, a division of Simon & Schuster, Inc. © 1985, 1988 by Michael E. Porter. All rights reserved.


22

BCG Product/SBU designations for action

Industrygrowth rate

HIGH

LOW

HIGH LOW

Relative Market Share

StarsMaintain orincrease market share

Cash cowUse profits to maintain growthMaintain position

Question markIntensify marketing effortor leave market

DogReduce marketingeffort or divest

William Meaney MBA BSc. ACMA

GE Multifactor Portfolio Matrix


SWOT

External Assessment Marketplace, competitor’s, social trends, technology, regulatory environment, economic cycles.

Internal Assessment Organisationalassets, resources, people, culture, systems, partnerships, suppliers etc.

Convert

Match

Strengths• Financial • Marketing• Production• 6Ms analysis

Weaknesses• Financial• Marketing• Production

Opportunities• Political & legal• Economic• Social• Technological

Threats • Political & legal• Economic• Social• Technological

Internal

External


The Critical Success Factors Approach


Identify the specific factors most responsible for the organisation to achieve its goals – Example Ryanair

Determine the CSF (load factor) for monitoring each business area and suitable KPIs (average ticket price, revenue per customer etc.)

Define the data requirements for measuring each KPI - Tickets sales per flight / number of passengers

Develop prototype system - DashboardModify prototype based on user feedback – update as required.

Strategic Choice


Ansoff’s Product market growth matrix – Options

Present

MARKETS

New

New Product developmentMarket Penetration• Reduce price• Advertising• Sales promotion• Free trial• Branding• Build customer loyalty

Market Development• New Segments• New channels of distribution• New markets regionally,

nationally, internationally• New methods – internet

Diversification• Acquisition/Merger• Licence• Franchise • Joint ventures• Strategic Alliances

Products/ServicesPresent New Booz

Allen Hamilton


Ansoff’s Product market growth matrix- DiversificationPresent

MARKETS

New

New Product developmentMarket Penetration

Market Development Diversification

Products/ServicesPresent New


Concentric

Integration Backward

Horizontal

Forward Lateral

Related diversification Unrelated Diversification

Strategic Choice Growth options

Porters Generic Strategies

Ansoff’s Matrix

AcquisitionsMergerLicenceFranchiseJoint VenturesStrategic AlliancesDivestmentSub contractingContract Manufacture.OutsourcingMBO etc.

Suitable

Appropriate

Feasibility

Financial DecisionalModels• Pro forma

accounts• Capital budgeting• Capital

Investment appraisal

• NPV etc.• Decision trees• (EMV) Expected

Monetary Values

Basis Means Options

Generation of Options Evaluation of options Selection of Strategy

Own and control

Shared ownership and control

Have use of


Strategic Implementation

People and Systems

• Organisational Cultureand Values

• Change management

Organisation structure

• Organisation structure

• Strategy v Structure

• Mintzbergs Organisational fit

Resource planning• Budgeting• Resource allocation• Project management• Balanced Scorecard • Performance monitoring


Strategic Implementation

31

Balanced scorecard

Strategy implementation

Final thoughts

StrategicMarketing

Change management

Project management

MotivationOrganisation structure and

design

Culture and values

LeadershipHuman Resources

Strategic IT

Resource allocation


Cause of change Affects

Change

Interdependencies

Conflicts and frustrations

Time lags

Triggers

Structure

Business

People

Technology


Force field analysis

Restraining forcesAssist


Driving forces

• Anxiety about job security• Change seems less stimulating• Fear of loss of power status. • Cynicism about change

‘another fad’• Existing systems are sufficient.• Trade union concerns• Cost of reviews• Complexity of work

• Fresh challenge in the job.• Improved rewards

• Increased job discretion

• New legislation requirement• Report to external agencies.

• Concern for quality.

Restraining and Driving forces for change

Current state

ResistanceIdeal

Managing the change process


Unfreeze

To new desired behaviourExisting behaviour

Change Refreeze

Attitudinal behavioural change

Selling the change

• Challenge the currentways

• Power structure alterations

Positive reinforcement• Reward the positive

acceptance

Communication

Encouragement

Functional

Advantages• Chief executive in touch with all

operations• Reduces/simplifies control

mechanisms• Clear definition of responsibilities• Specialists at senior and middle

management levels

Disadvantages• Senior managers overburdened

with routine matters• Senior managers neglect strategic

issues• Difficult to cope with diversity• Coordination between functions is

difficult• Failure to adapt


Chief executive

Personnel ProductionFinanceMarketing

Mintzbergs five design configurations• The Strategic Apex

Top level managers with overall responsibility for the organisation• Middle line managers

Managers who connect the Strategic apex to the operating core• Technostructure

Analysts who have responsibility for affecting certain formsof standardisation in the organisation

• Support staff People who provide indirect services for the organisation

• The Operating Core Employees who perform the basic work related to the

productionof goods and services


Style theories of Leadership


Successful business leader• Jack Welch at GE• Michael O Leary at Ryanair• Steve Jobs at Apple• Ralph Halpern at Burtons• Ann Heraty at CPL recruitment?(key organisation in analysis of the recruitment industry)

• Lee Iacocca at Chrysler• Willie Walsh at British Airways• Terry Leahy at Tesco• Stuart Rose at M&S • Denis O Brien at ESAT


Principles of the Strategy Focused Organization:TRANSLATE THE STRATEGY TO OPERATIONAL TERMS

� Measurement is the language that gives clarity to vague concepts.

� Measurement is used to communicate, not to control.

� Building the scorecard develops consensus and teamwork throughout the organization

"If we succeed, how will we look to our shareholders?”

The Strategy

Financial Perspective

"To achieve my vision, how must I look to my

customers?”

Customer Perspective

"To satisfy my customer, at which processes must

I excel?”

Internal Perspective

"To achieve my vision, how must my organization learn

and improve?”

Organization Learning


William Meaney MBA BSc ACMA 41

42

Linking the reward system to strategic outcomesProperly designed reward system is management's most powerful strategy implementation tool.

Guidelines• Performance must be major piece of the total compensation package.• Should extend to all employees not just top management but reward

performers only.• Administer with utmost equity and fairness.• Incentives linked tightly to targets in the strategic plan.• Performance targets for individuals should involve what the individual

has control over• Keep time between performance and reward to an absolute minimum.• Combine monetary and non-monetary rewards.

William Meaney MBA BSc ACMA

Constraints on project management


‘Strategy is a process not an event’• Planned• Resourced• Management driven

2013

2015 20162018

2027

2020


Wisdom - knowledge with insight

Knowledge - information with meaning

Information - Data with context

Data - facts and observations

The knowledge hierarchy


Strategic management and strategic marketing –the link!


Conclusion

• We have covered a lot of material!• About 30 topics minimum in some detail• And we have still only looked at 1exam!• All this work will ultimately come down to 3.5 hours in the not

too distant future• Select a date and start …………• …………….and soon you will be ready for your exam!

closing shot! - studyonline.iestudyonline.ie/wp-content/uploads/2016/09/closing-shot-what-we... ·...

Documents