E3 Flashcards
4 main models to develop a strategy:
- The Rational Model - 3 steps; strategic analysis, strategic choice, strategic implementation
- The Emergent Model - formal planning, but adjusted for unexpected events
- Logical Incrementalism - formal planning is a waste of time, use small scale extensions of past, successful strategies
- Freewheeling opportunism - ignore any formal planning, take advantage of opportunities as they arise
Mission =
statement of fundamental objectives, ‘reason for being’
Vision =
Where they company sees itself in the future
Stakeholders: 7 Actors
Organisations of states
States
Organisations formed by firms
Corporations
Non-gov organisations
mass publics
knowledge based communities
4 Ways to Resolve Stakeholder Conflict:
Satisficing - negotiaition
Side Payments - compensation
Sequential action - deal with each dept in turn
power - enforcing contracts
4 levels of CSR:
philanthropic
ethical
legal
economic
4 approaches to csr:
reaction, defence, accomodation, proaction
4 ethical stances to CSR:
short-term shareholder interest - follow the law
long-term shareholder interest - spend on short term CSR for long term gains
multiple stakeholder obligation - involve stakeholders
shaper of society - lead the way in industry
6 Markets Model: Groups an org needs to market to
Customer markets - direct customers/comsumers
Referral markets - people/orgs that refer customers to us
Supplier markets - suppliers we partner with
Recruitment markets - providers of staff
Influence markets - public relations
Internal markets - internal departments
Competitor analysis - 3 stages
- Identify competitors ( 4 types)
- brand - similar products, same customers
- Industry - similar products, different segment
- form - different products, satisfy same need
- generic - compete for the same income - Analyse competitors
- Develop a response profile (4 types)
- Laidback - no response
- Selective - respond in certain instances
- Tiger - aggressive response
- Stochastic - no predictable pattern
Porter’s Diamond
Factor Conditions
highly skilled employees/infrastructure/can’t be emulated by competition
Demand Conditions
Substantial demand at home = economies of scale & experience to compete globally
Related Supporting Industries
Knowledge sharing/supply chains/distribution networks
Firm Strategy, Structure & Rivalry
If home market is very competitive, company is more likely to become world class
Threshold competency =
Core competency =
Threshold = things a business must do well to simply compete
Core = things the business does well that give competitive advantage
9Ms Model:
Manpower
Money
Management
Machinery
Markets
Materials
Methods
Management info
Make-up (structure/culture)
CSFs =
main sources of CSFs
vital areas where things must go well and a business must out perform its rivals
corporate mission translates into CSFs which translate into KPIs
Main sources of CSFs include: industry, situation, wider environment
Porter’s Value Chain
Primary:
inbound logistics, operations, outbound logistics, marketing & sales, service
Support: firm infrastructure, technology, HR, Procurement
Value drivers
Value shop
Value system
Value drivers = enhance perceived value of product by customers
Value shop = alternative representation of value chain for professional service firms
Value system = linkages between the value chains of the business and it’s suppliers/customers
Diversification gap =
difference between ideal position & the profit after efficiency savings AND new strategic initiatives
Efficiency gap =
increase in returns caused by an efficiency drive / cost cutting exercise
Value drivers
Tangible =
Intangible =
tangible = NCAs / raw materials
intangible = brand / know-how / reputation
Methods of Corporate Foresight (6)
Issues analysis - potential signfificant events analysed for probability & impact
Scenario planning - consider series of possible futures
The Delphi method - 1-1 interrogation of experts using questionnaires
Morphological analysis - systematically investigates all components of major problems
Opportunity mapping - identifying gaps in market
Cross-impact analysis - how events will interact with one another
Real options (3)
- abandon
- follow-on
- Delay
The 5Cs of foresight
communication
concentration
co-ordination
consensus
commitment
Intuitive methods of forecasting (4)
- Think tank - group of experts discuss, unstructured
- Delphi Technique - experts posed with questions individually (reduces pressure to conform)
- Brain storming - all levels of org generate ideas in a group (outside of normal hierarchy)
- Derived demand - forecast based on demand for another product, many other factors could influence
for a strategy to be selected it must be (3)
SUITABLE (does the job)
FEASIBLE (possible to be done)
ACCEPTABLE (to stakeholders)
Porter’s Generic strategies
(appropriate for small org that doesn’t have the resources to compete on a large scale)
Source of competitive advantage (cost or differentiation) vs scope:
Cost leadership (broad scope)
Cost focus (narrow scope)
Differentiation (broad scope)
Differentiation focus (narrow scope)
Ansoff’s Matrix ( gives the direction of growth / where to compete)
Market penetration - same product, same market. Aim to increase market share
Product development - different product, current market
Market development - existing product, different market
Diversification - different product to different market. (related if same supply chain, unrelated if no common ground)
BCG Matrix - aim to have a balance
Dog - low market share, low growth market
Cash cow - High market share, low growth market
Problem child/? - low market share, high growth market
Star - high market share, high growth market
The Performance Pyramid
Level 1: CORPORATE VISION
Level 2: MARKET & FINANCIAL: Divisions / SBUs. CSFs that must be achieved to meet the vision
Level 3: CUSTOMER SATISFACTION, FLEXIBILITY, PRODUCTIVITY: Business operating systems. Measures & processes
Level 4: QUALITY, DELIVERY, CYCLE TIME, WASTE; departments. day to day measures
Building Block Model
(performance measurement should be based on 3 blocks)
DIMENSIONS - goals / CSFs
Downstream results: financial performance / competitiveness
STANDARDS
The ideals/values we want to achieve (need ownership, accountability & fairness to ensure manager motivation)
REWARDS
Motivators for employees to work towards. Clarity, motivation & controllability
Benchmarking (3)
Internal - comparison to another dept
Competitor - comparison to competitor
Process - compare to outside of industry
Shareholder Value Analysis. 7 drviers of value
(value of business = value of future cash it can generate)
SLOWCAT
Sales growth rate
Life of project
Operating profit margin
Working capital
Cost of capital
Asset investment
Tax
Integrated Reporting: 6 capitals
Financial
Manufactured
Intellectual
Human
Social & relationship
Natural
7 guiding principles to underpin preparation of report:
- strategic focus
- connected info
- stakeholder relationships
- materiality
- conciseness
- reliability & completeness
- consistency & comparability
speed of change vs extent of change matrix (4 options)
Transformational change & big bang speed = revolution
Transformational change at incremental speed = evolution
Realignment at big bang speed = reconstruction
Realignment at incremental speed = adaptation
McKinsey 7S Culture Framework
(all factors must be aligned for org to effectively & factors depend on each other so cannot just change one)
Hard factors: Structure, Strategy, Systems
Soft factors: Skills, Style (of leadership), Staff, Shared values
3 key reasons why employees may resist change
- personal factors
- job factors
- social factors
Scenario Planning Process Stages (7)
- Identify high impact, high uncertainty factors
- Identify possible futures
- Cluster factors together to identify consistent futures
- Write the scenario
- Identify & assess possible courses of action
- Monitor reality to see which scenario is unfolding
- Revise scenarios and strategic options as appropriate
Change leadership: 8 step process of leading a change
- Establish a sense of urgency
- Create a guiding coalition
- Develop a change vision
- Communicate the vision
- Empower broad-based action
- Generate short-term wins
- Never let up
- Incorporate changes into culture
Leadership styles to help manage staff amongst change
- Education & communication - inform & explain to overcome fear
- Participation - make feel involved
- Facilitation & support - help/training/mentoring
- Negotiation - come to an agreement
- Power/coercion - force the change
- Manipulation & co-optation - select the info communicated, no negatives, ethical issues! Breaking integrity!
Lewin’s Model for implementing change: 3 step process
- unfreeze the existing structure (breakdown barriers)
- make the changes (communication, training)
- Refreeze - embed the change (success stories, targets, bonuses)
Lewin’s Forcefield Analysis
Aim to increase DRIVING FORCES which encourage & facilitate change
Aim to reduce RESTRAINING FORCES which hold change back
Theory E & Theory O
Theory E: focus on improving shareholder value
Theory O: softer strategies, people oriented
BOTH IMPORTANT - implement simultaneously
Mentoring =
Coaching =
Mentoring = experiences helps less experienced. Learning & development partnership
Coaching = more specific. Focused achievement for set period of time
4 main strategies for failing businesses
Retrenchment = cost cutting
Turnaround = reposition in current market, look for new source of competitive advantage
Divestment = sell/close business units
Liquidation = sale of organization as a whole
5 Emerging Digital Trends
- the internet of me (digital experiences)
- outcome economy (outcomes, not products)
- The platform (r)evolution (cloud, mobile)
- The intelligent enterprise (big data)
- Workforce reimagined (machines)
9 Revenue streams presented by digital technology
- transaction
- capacity leasing
- licensing
- subscription
- commission
- advertising
- trading
- donations
- subsidies
Customer demands in a digital era (7)
contextualized interactions
seamless experience
anytime, anywhere
great service
self-service
transparency
peer-review & advocacy
skills leaders must demonstrate in a digital era (6)
inspirational leadership
Competitive edge
influence external parties
collaboration
building talent
strategy execution
4 ideas to keep ahead of digital expectations
- design thinking - alternative experiences to appeal to many
- Experiential pilots - gage how customer reacts
- protoyping
- brand atomisation - super distribution of the brand
to attract digital talent (5)…
long term working strategy
make company values together
empowerment
suitable workplaces
policies that support collaboration
Digital traction is a function of scale, active usage & engagement.
Engagement is measured by …
engagement is measured by net promoter score (NPS) which categorizes users as:
promoters - buy again/recommend
Passives- satisfied but might switch to competitors
Detractors - could damage brand
five main challenges/limitations in AI model development:
Data labelling workload – the humans analysing the camera data are ‘labelling’ it.
Obtaining massive training data-sets
The explainability problem – developers cannot fully explain the decisions made by the algorithm, even though they programmed it
Generalizability of learning
Bias in data and algorithms
