E3 Models Flashcards
9M
For resource audit:
Manpower, Money, Machinery, Materials (Supp relations), Markets (Marketing & Dist), Management (Skill), Methods (Processes), Make Up (Structure/ Culture), Management Information Systems
Porters Diamond
Used to asses NATIONAL environment (Advantage):
Firm Strategy, Structure & Rivalry
Factor Conditions Demand Conditions
Related and supporting industry
Porters 5 Forces
Used to asses competitive environment (Specific industry): Threat of new entrants Threat of substitutes Bargaining power of suppliers Bargaining power of buyers Existing rivalry
Porters Value Chain
What a firm does to add value:
Support activities:
Firm Infrastructure
Technology Development
Human Resource Management
Procurement
Primary activities:
Inbound Logistics
Operations
Outbound Logistics
Marketing & Sales
After Sales ServicePESTEL
Used to asses general environment: Political Economic Social Technical Environmental (S) Legal (P)
Ansoff Matrix
Strategic directions open to a firm (2.Direction):
Product - Current
Market - Current (Penetration)
Market - New (Market Development)
Product - New
Market - Current (Product Development)
Market - New (Diversification)
Porters Generic Strategies
Generic competitive strategies (1.Basis):
Cost Leadership
Differentiation
Focus (Cost Focus/ Differentiated Focus)
Bowman’s Clock
Alternative to Porter’s Generic that allows HYBRID & FAILURE STRATEGIES (1.Basis):
[perceived added value(y) vs. price(x)]
4. Differentiation
3. Hybrid 5. Focussed Differentiation
2. Low Price 6(F)
1. No Frills 7(F)
8(F)
Lynch Expansion Matrix
Methods of implementing strategy (3.Implementation): Internal Development (Organic) - Home Country - Abroad External Development (Merger/ Acq.) - Home Country - Abroad
SAF
Strategic Evaluation Criteria(Picking Options):
- Suitability (Exploits strength/ Neutralises Threat?)
- Acceptability (To Relevant Stakeholders)
- Feasibility (Physical/ Financial Capability)
Mendelow Matrix
Stake holder mapping & classification: [Level of interest vs. power] I, P Low, Low - Minimal Effort Low, High - Keep Satisfied High, Low - Keep Informed High, High - Key Players
Kotler Brand Strategy
General brand strategies:
Line Extension (New variants of existing lines)
Brand Extension (New product category)
Multibranding (Launch several brands in same category)
New Brands (New launch)
Co-branding (Two brands combined in an offer)
BCG Matrix
Asses internal balance of product portfolio:
[Relative Market Share Vs. Rate of Market Growth]
[Relative share=Own share/ strongest competitor share]
[Growth = industry sales growth, 10%=’High’]
Share,Growth
H,H - Stars
H,L - Cash Cow
L,H - Question Mark
L,L - Dog
SWOT
Used for position audit:
Internal:
Strength
Weakness
External:
Opportunities
ThreatsCompetitor Analysis
Part of environmental analysis
Product Life Cycle
Assess internal balance of product portfolio:
-Industry life cycle
-Brand life cycle
-Product life cycle
Introduction, Growth, Shakeout, Maturity, Decline
Benchmarking
Establish best practice in business critical processes:
Internal Benchmarking
Functional Benchmarking (irrespective of industry)
Competitive Benchmarking
Strategic Benchmarking (competitive but aimed at change)
Types of Change
Balogun & Hope Hailey: Scope - Realignment (Tweak) - Transformation (Major Strategy Change) Nature - Incremental (In stages) - Big Bang (Fast)
=> Adaptation, Evolution, Reconstruction, Revolution [S(R)-N(I), S(T)-N(I), S(R)-N(B), S(T)-N(B)]
Lewin Force Field Analysis
How to achieve desired state:
Driving forces»Current State«Restraining forces = Desired Outcome
Unfreeze-Move-Refreeze
Change Context
7 aspects of context to consider (Balogun & Hope Hailey): Scope of Change Time available Need to preserve characteristics Diversity of opinions Resources Workforce Readiness Power to Change
Staff resistance
Kotter & Schleisinger:
- Education & Communication
- Participation & Involvement
- Facillitation & Support
- Negotiation & Agreement
- Manipulation & Co-Option
- Coercion, implicit & explicit
McKinsey 7S
Aspects of culture to consider when undergoing cultural change: 'Hard' Aspects: - Strategy - Structure - Systems 'Soft' aspects: - Skills - Staff - Style
- Shared Values
Balanced Scorecard
Kaplan & Norton developed balanced scorecard for broader strategic focus: Financial Customer Internal Learning & Innovation
Strategy
Strategy is a HOW an organisation seeks to acheive it’s goals
How to develop strategy
Johnson, Scholes & Whittington: Design Lens (Formal, detailed, focused plan) Experience Lens (Flexible plan, trial & error, based on experience) Ideas Lens (No plan, exploit opportunities & new ideas)
RPM
Rational Planning Model: Corporate mission & objectives Position Audit Environmental analysis Corporate appraisal Strategic option generation Strategic evaluation & choice Strategic implementation Review & Control
Mintzberg ‘Crafting emergent strategies’
Alternative to RPM: Planned Strategy Realised Strategy Craft in emnergent strategy Craft out submergent strategy
Freewheeling Opportunism
Alternative to RPM:
Determine organisational goals but don’t plan how to acheive them
Exploit opportunities
Logical incrementalism
Alternative to RPM
No clear plan
Feel forward through small steps & decisions
Usually taken by customer facing staff, not strategic apex
Resource Based
Resource based approach to strategy Johnson, Scholes & Whittington -Strategic capability (Resources & competences needed for an organisation to survive) -Tangible Resources -Intangible Resources -competencies -threshold competencies/ resources -unique competencies/ resources
Lynch - Mission Statement
Mission statement should:
- Be specific enough to influence an individuals behaviour
- Be realistic & Acheivable
- Reflect the org’s distinct advantages
- Be flexible to the demands of a changing environment
Mission statement can be useful
- Can promote goal congruence
- May provide a focal point for new strategies
- Allows the org to communicate core values to stakeholders
Objective Setting
Specific Measurable Attainable Relevant Time bound
CSF
Critical success factors are those components of strategy where the organisation must excel to out-perform competitors
CSR
Corporate Social Responsibility
- Strong View (a company exits for the benefit of all stakeholders
- Weak View (a company exists to maximise shareholder wealth)
Dealing with uncertainty
Real Options Forecasting Game Theory Scenario Planning Foresight
Real Options
- Option to abandon
- Option to wait
- Follow on investments
Value using Black Scholes Model
Forecasting
Trying to predict what will happen
- Time series analysis (identify long term trends & seasonal variances)
- Regression analysis (looking for correlation)
- Econometrics (application of economic variables to computer modelling)
- Jury Forecasts (advice sought from a panel of experts)
- Delphi method (anonymous experts responding to a detailed questionnaire)
Game theory
Simulating competitor reactions to strategy
- Win-Lose (adopt)
- Lose-Win (avoid)
- Lose-Lose (avoid. e.g. oligopoly-few key players-mobile providers)
Scenario planning
Model outcomes
Based on changing variables
Around which there is a high degree of uncertainty
Benefits of scenario planning
- Identification of key uncertainties allow for better planning around these
- Management are forced to look externally
- Insight is provided into the future of the industry, helping to plan strategy
- The organisation as a whole becomes more future orientated
- Fewer suprises as outcomes are anticipated
How to do scenario planning
- Define scope of project & identify major stake holders
- Identify key trends & areas of uncertainty
- Construct initial scenarios & check them for consistency
- Identify further research needs
- Develop quantitative models used to formulate competitive strategies
Why do environmental modelling
Uncertainty may cause:
- planning horizons to be shortened
- strategy too become conservative
- emergent strategy to prevail over planned strategy
The importance of marketing
A successful marketing strategy can be a key source of competitive advantage through the development of:
- Brands
- Distribution channels
- Product innovation
- Customer relationships
Strategic Marketing: DPP
Products view:Direct Product Profitability Analysis
- Sell more products to drive success
- Fully understand profitability of the products to maximise performance
Limitations:
- Internal focus on cost (vs external focus on customers)
- Ignores inter-relations between products (Dysfunctional)
- DPP analysis may cost more than it saves
Strategic Marketing: Branding
Differentiates using three key elements:
- Name/ logo
- Colour Scheme/ Livery
- Associations
Strategic Marketing:Customer view
CPA-An analysis of revenue streams & service costs associated with specific customers/ customer groups
Lifecycle-value of the entire customer relationship
Relationship-focus on customer retention, Transactions marketing Vs. Relationship Marketing
Marketing mix
Product, place, price, promotion
How to create marketing strategy
- Define market & key requirements for success in the market
- Determine performance differentials (understand gaps in the market that could be entry points)
- Determine difference in competitive programmes (get to know competitors
- Profile strategies of competitors (Threats & how to deal with them)
- Determine strategic planning structure (How strategic marketing effort will be planned & managed)
Earl’s 9
Earl’s 9 reasons for IT/IS strategy (CHESSSTAR):
Critical to the success of the business
High cost (Capital & Revenue perspective)
Effective management is required due to it’s specialist nature
Source of competitive advantage
Structural changes may occur within an organisation, or industry as a whole
Stakeholders are affected (therefore analysis of the impact is required)
Technical issues both within and outside the IT department
All levels of staff are affected by IT
Revolutionary changes are possible e.g. Banking
E-commerce
- challenges traditional business models (Disintermediation, Reintermediation, Countermediation)
- small companies can move instantly into the global market place
- it has led to new business partnerships
- it promotes transparent pricing
- it facilitates personalised attention
Innovation
‘The successful exploitation of new ideas’
- Offer (products/ service) innovation
- Process innovation
BPR
BPR is the fundamental rethinking and radical redesign of business processes, to give dramatic improvements in:
- Cost
- Quality
- Service
- Speed
Prince 2
- proven framework
- output (product focussed)
- documentation
- flexible to business case
- allocates responsibilities
Traditional organisational structures
- Classical (Fayol, Taylor, Weber)
- Human relations (Mayo, Mintzberg, Maslow)
- Contingency (Handy, Woodward, Burns & Stalker)
Criticisms of traditional organisational structures
- general trend away from long term planning to the identification of core competencies (5yr plan to 2yr plan)
- Management power has been diluted by the increasing influence of stakeholder groups
- Greater need for innovation & flexibility
- Greater need for detailed product/ customer profitability analysis
- Greater emphasis on external sources of information (competitors)
Network Structure
Modern alternative to traditional organisational structures:
- Core company
- Specialised design company
- Specialist manufacturing company
- Specialist finance company
- Specialist distribution company
- Specialist sales & marketing company
Change Management Process
- Analyse competitive position (Pestel/ P5F)
- Determine type of change (Balogun & Hope Hailey)
- Identify desired state(Lewin Force Field)
- Analyse the change context (Balogun & Hope Hailey)
- Determine design choices
- Design the transition process (Bologun & Hope Hailey)
- Manage & evaluate
Change design choices
- Change path (Nature & Scope)
- Start point (Top down or bottom up?)
- Change style (Kotter & Schleisinger)
- Change target (Strat, Tact, Op)
- Change interventions (Levers/ mechanisms to be deployed)
- Change roles (Who leads/ directs the change)
Change levers/ mechanisms
Balogun & Hope Hailey:
- Technical changes (Systems/ Structures)
- Political interventions (Direction from senior management)
- Cultural interventions
- Interpersonal interventions
Control Styles
- Strategic planning style (strategy dictated from HO)
- Strategic control style (Halfway house, some strategic guidelines with financial controls)
- Financial control style (divisions controlled by imposition of strict financial targets)
