How to think strategically by Davide Sola, Jerome Couturier

Introducin” rel=”nofollow”>ing Assignment 2

? Introduced at this poin” rel=”nofollow”>int in” rel=”nofollow”>in order to use and apply learnin” rel=”nofollow”>ing as we go along
? Adopt an approach of theory in” rel=”nofollow”>into practice

The Strategy Development Process
Source: Sola, Courturier and Borioli, 2013

Round about:

Visual Evidence
? Leadership and role modellin” rel=”nofollow”>ing
? Governance and structure
? Stories
? Systems and processes
? From this central core strategists then need to assess the current situation …

Current Situation
• Transfer to slides from Johnson & Scholes for:
• PESTLE analysis
• Porter’s five forces
• Roundabout model – assessin” rel=”nofollow”>ing the situation

Competitive Advantage
? Value proposition
– Sum of benefits the organisation promises to deliver to its customers, for which customers are willin” rel=”nofollow”>ing to pay
– What is the product’s scope and uses? What are the key features?
– Who is this product aimed at? Where are the customers?
– What need does the product address? What problem is it tryin” rel=”nofollow”>ing to solve? To what extent does the product address the problem?
– What is the product’s price position? (price versus cost)

Value chain” rel=”nofollow”>in model – developed by Porter

? Primary activities:
– Inbound logistics – receivin” rel=”nofollow”>ing, storin” rel=”nofollow”>ing, distributin” rel=”nofollow”>ing
– Operations – activities to transform in” rel=”nofollow”>inputs in” rel=”nofollow”>into fin” rel=”nofollow”>inal product, such as assemblin” rel=”nofollow”>ing, packin” rel=”nofollow”>ing, testin” rel=”nofollow”>ing
– Outbound logistics- warehousin” rel=”nofollow”>ing and external distribution
– Marketin” rel=”nofollow”>ing and Sales – means by which customers are made aware of product or service and are able to purchase it
– Service – in” rel=”nofollow”>installation, repair, train” rel=”nofollow”>inin” rel=”nofollow”>ing, periodic main” rel=”nofollow”>intain” rel=”nofollow”>inance

Value Chain” rel=”nofollow”>in – Support Activities

1. Procurement – acquirin” rel=”nofollow”>ing resources for primary activities
2. Technology – ‘know how’, design, research
3. HR Management – people, recruitment, train” rel=”nofollow”>inin” rel=”nofollow”>ing, managin” rel=”nofollow”>ing, developin” rel=”nofollow”>ing, rewardin” rel=”nofollow”>ing
4. Infrastructure – systems, routin” rel=”nofollow”>ines and structures to support the organization such as fin” rel=”nofollow”>inance and in” rel=”nofollow”>information

Resources

Resources – assets the organization possesses or can be called upon – such as a strategic alliance (good examples within” rel=”nofollow”>in the airlin” rel=”nofollow”>ine sector to use capacity effectively)
Competences – the way assets are deployed – what an organization does well – even unique – they are hard to access or copy
Core competences – used to achieve competitive advantage

Competence-Resource Matrix Application
p.127 Sola, et al

Quadrant Q1 presents all the unique resources and core competences the organization already has
Q2 shows superfluous strengths. For these the challenge is to turn apparently irrelevant strengths in” rel=”nofollow”>into valuable resources and capabilities
Al the resources and competences in” rel=”nofollow”>in Q3 represent the organization’s key weaknesses. Convertin” rel=”nofollow”>ing weakness in” rel=”nofollow”>into strength is likely to be a long-term task for most organizations and outsourcin” rel=”nofollow”>ing may be a solution
Q4 is a zone of irrelevance

Value Network

A value network “is the set of in” rel=”nofollow”>inter-organizational lin” rel=”nofollow”>inks and relationships that are necessary to create a product or service” (Johnson Scholes and Whittin” rel=”nofollow”>ington, 2008:111)
Where are the cost and value created?
Which activities are central to your own strategic capability and which are less crucial?
Where are the profit pools? (different levels of profit available, may differ due to competitive rivalry, but still need ability to support activity)
Make or buy?
Best partners and suppliers?
Relationships – such as strategic alliances (Defin” rel=”nofollow”>inition: where two or more organizations share resources and activities to pursue a strategy (J S & W, 2008:360)

Strategic Alliances
? To obtain” rel=”nofollow”>in resources that are required but not possessed
? Sharin” rel=”nofollow”>ing or poolin” rel=”nofollow”>ing, mechanism of co-operation
? May be complementary, lead to cost-reduction
? Specialisation – concentrate, use knowledge and expertise
? Learnin” rel=”nofollow”>ing – to develop own competencies
? Types of strategic alliances
? Join” rel=”nofollow”>int ventures – set up newly created organization
? Consortia – to focus on a particular venture or project (usually large scale)
? Networks – less formal, mutual trust
? What makes them work? Purpose, benefits, compatability

Summary
? The strategic roundabout circulates around the culture of an organization
? Culture is contin” rel=”nofollow”>inuous and requires acknowledgement
? Strategic posturin” rel=”nofollow”>ing – various routes
? Strategic development process – five stages
? Assess current situation usin” rel=”nofollow”>ing PESTLE
? Competitive advantage (over competition)
? Value chain” rel=”nofollow”>in and network
? Strategic alliances

Solvin” rel=”nofollow”>ing the Core Challenge – p.141
• Cause effect approach – seek origin” rel=”nofollow”>ins
• Positive effect Negative effect
• Choose one effect
• Identify causes/reasons
• Check existence of core challenge
• Yes – core challenge

Logic Tree Structure
? Ask a series of how questions and alternatives
? Relevance questions – why
? Coherence
? Mutually exclusive – therefore be distin” rel=”nofollow”>inctive
? Collectively Exhaustive – complete coverage
? Assign weightin” rel=”nofollow”>ings – for importanc

Logic Tree Structure
1st lin” rel=”nofollow”>ine 2nd lin” rel=”nofollow”>ine MECE
Why? Coherence Mutually Exclusive
Core Challenge Relevance
How? Coherence Collectively Exhaustive

Co-Creation (p.165)
• Encourages active in” rel=”nofollow”>involvement of every aspect of the value chain” rel=”nofollow”>in
• Integrates knowledge
• Integrates experience and creativity
• Moves away from passive recipient stance

Blue Ocean Strategy
Chan &Mauborgne (2005)
Applyin” rel=”nofollow”>ing Blue Ocean Strategy
Elimin” rel=”nofollow”>inate – reduce
raise – create framework
Which features can be elimin” rel=”nofollow”>inated because they are not creatin” rel=”nofollow”>ing any value in” rel=”nofollow”>in the blue ocean?
Which features can be reduced because they no longer make the product stand out from its competitors?
Which features should be in” rel=”nofollow”>increased or even created?

Seven Degrees of Freedom (Sola, p.172-174
Bagnai, Coley and White (2000)
• New competitive arena
• New in” rel=”nofollow”>industry structure
• New geographic area
• New delivery approaches
• New products and services
• New customers
• Existin” rel=”nofollow”>ing products to existin” rel=”nofollow”>ing customers

Summin” rel=”nofollow”>ing up solutions
• Priority matrix – p.177
• Assign high to low values again” rel=”nofollow”>inst specific criteria
• Horizons – may be growth, momentum,
• Ideas that develop, seeds for the future see p.181
• Extend/defend, new busin” rel=”nofollow”>iness, viable options

Reducin” rel=”nofollow”>ing Uncertain” rel=”nofollow”>inty
• State your assumptions
• Test a value hypothesis (p.189)
• Test a growth hypothesis (p.190)
• Test a sustain” rel=”nofollow”>inable hypothesis (p.190)
• (simple, quick and in” rel=”nofollow”>inexpensive)

Ask the question?
• How will the proposed course of action solve the problem?
• Need to be explicit – what is the problem?
• Who faces the problem?
• What price is required to solve the problem
• Scale and growth – will it last?
• Imitation and substitution. Ability to cope

Fishbone Analysis
• Assumptions about value
• Well-tested tool to identify cause of a problem (p.195)
• https://www.isixsigma.com/tools-templates/cause-effect/the-fundamentals-of-cause-and-effect-aka-fishbone-diagrams/

Growth/Cost p.196
• Viral growth – word of mouth, recommendation
• Paid growth – advertisin” rel=”nofollow”>ing, in” rel=”nofollow”>incentives and new features
• Sticky growth – customer retention, loyalty

Sustain” rel=”nofollow”>inability p.199
• How easy is your product to replicate?
• How adaptable is the organization?
– Add new features
– Intellectual property protection
– Customer lock-in” rel=”nofollow”>in (warranty, servicin” rel=”nofollow”>ing)
• Adaptable culture

Test and Learn p.201
• Monitor – awareness of trend changes
• Create a forum for dialogue within” rel=”nofollow”>in the organization to discuss strategic level concerns and in” rel=”nofollow”>initiatives
• Take action in” rel=”nofollow”>in response

Scope of Strategy (Sola, p207)
? Strategy is a lengthy and arduous process
? Strategy is in” rel=”nofollow”>intricate and usually in” rel=”nofollow”>involves several or many people, groups and specialisms – all with their own agendas and priorities
? The most frequently cited reason for partial or total failure of strategic implementation is three factors:
? Culture (the in” rel=”nofollow”>invisible hand)
? Communication (effective)
? Change (there is a difference in” rel=”nofollow”>in activity and outcome)
? Why are these three issues so in” rel=”nofollow”>influential?

Strategic Action (Sola, p.208)
• Needs to be:
– Co-ordin” rel=”nofollow”>inated
– Complimentary
– Main” rel=”nofollow”>instream – so there is awareness and in” rel=”nofollow”>insight within” rel=”nofollow”>in the organization https://www.youtube.com/watch?v=NTgJOwa9tZc – Strategic Intent
• Clarity – people are able to state the strategy
• There is a rationale (why – should be an improvements) and an overall purpose
• Which companies are examples of executin” rel=”nofollow”>ing these aspects of strategy to a high standard/successfully?

Learnin” rel=”nofollow”>ing how to change
• Strategy execution is defin” rel=”nofollow”>ined as: “a set of actions designed to take you from poin” rel=”nofollow”>int A to poin” rel=”nofollow”>int B” (Sola, et al. 2013:209) [this is about change]
• Learnin” rel=”nofollow”>ing is defin” rel=”nofollow”>ined as “the acquisition of new, or the modification of existin” rel=”nofollow”>ing behaviour, skills or knowledge” (Sola, et al. 2013:209) [this is about change – order to reach poin” rel=”nofollow”>int B]

Shared Intentionality (p.211)
• Everyone in” rel=”nofollow”>involved needs a will to act and an appreciation that status quo is not an option
• The in” rel=”nofollow”>intentions need cohesion and direction
• Achieved by: restatin” rel=”nofollow”>ing strategic objectives
• Mutual rein” rel=”nofollow”>inforcin” rel=”nofollow”>ing / in” rel=”nofollow”>interdependence; not conflict

Change Management Architecture
Source: Sola, et al (2013:213)
Acceleratin” rel=”nofollow”>ing the speed of change Enablers Capability buildin” rel=”nofollow”>ing Rein” rel=”nofollow”>inforcin” rel=”nofollow”>ing mechanisms Change of context
Compellin” rel=”nofollow”>ing
Story Role
Models
Launchin” rel=”nofollow”>ing and Spreadin” rel=”nofollow”>ing Change
Strategic Initiatives
Settin” rel=”nofollow”>ing the Scene Clear end state
Shared Understandin” rel=”nofollow”>ing of the Need to Change

Settin” rel=”nofollow”>ing the Scene (Sola, p.214)

• A cause champion/believer lays the foundations and creates the right conditions (very evident in” rel=”nofollow”>in political scenarios)
• Clear message: doin” rel=”nofollow”>ing nothin” rel=”nofollow”>ing is not viable
• Lin” rel=”nofollow”>ink message with benefits to motivate
• How can in” rel=”nofollow”>individuals contribute (tasks/actions)
• Clear end state (visualize)
• What are the benefits of the case study project? What is the end state?

Strategic Initiatives (Sola, p.215)
• Sense of flow/progression/alignment
• What are the proposed actions?
• How will the actions contribute to the strategic objectives? (which need to have been communicated previously)
• Who is the facilitator/project co-ordin” rel=”nofollow”>inator?

The From – to Matrix
Visualise and express key guidelin” rel=”nofollow”>ines

FROM: TO: INITIATIVES
Current situation
Core challenges
Prevailin” rel=”nofollow”>ing issues
Via openin” rel=”nofollow”>ings, opportunities and change What outcome/s will the strategy achieve?
List by importance What
How
Why

Launchin” rel=”nofollow”>ing and Spreadin” rel=”nofollow”>ing Change
• What is required:
– Communicate with empathy
– Encourage commitment to change
– Offer support through change
• Persuade, in” rel=”nofollow”>inspire, comfort, co-operate
• How?

Compellin” rel=”nofollow”>ing Stories (Sola, p.220)
• https://www.youtube.com/watch?v=KUwavAAUyH8
• Narrative not bullet poin” rel=”nofollow”>ints
• Ability to locate within” rel=”nofollow”>in the story
• Include examples
• What does it mean for me?
• Easy to recall and retell

Usin” rel=”nofollow”>ing Role Models (Sola, p.221)
• https://www.youtube.com/watch?v=Kc2lV00LoPo
• Knowledgeable, confident, approachable
• Held in” rel=”nofollow”>in high regard by colleagues
• Practice values of the organization
• Visible, trusted understandin” rel=”nofollow”>ing and understandable, personally competent
• Who is your role model and why?

Pace of Change (Sola, p.223)

• Enthusiastic Enablers- use networks and professional status
– Connectors – spread ideas, may be in” rel=”nofollow”>informal
– Experts: very knowledgeable, respected
– Sales People: persuasive, see benefits
• https://www.youtube.com/watch?v=4bkmp6NnkHQ

Capability Buildin” rel=”nofollow”>ing
To address busin” rel=”nofollow”>iness needs (Sola, p.224)
• Formal train” rel=”nofollow”>inin” rel=”nofollow”>ing
• On the job practice and coachin” rel=”nofollow”>ing
• Involve, experiment, discover
• Develop new skills with confidence and motivation to use them
• Meanin” rel=”nofollow”>ingful and relevant – use role models
• Investment in” rel=”nofollow”>in staff – sufficient time

New normality (Sola, p226/7)
• Change the environment – VISIBLE
• In what ways can a workplace change?
• Meanin” rel=”nofollow”>ingful – lin” rel=”nofollow”>inks with change message
• Relevant – has impact on work routin” rel=”nofollow”>ines
• Rein” rel=”nofollow”>inforce through recognition and reward
• Visual and lin” rel=”nofollow”>inked to change programme

Summary
• Strategy is about change, testin” rel=”nofollow”>ing and modifyin” rel=”nofollow”>ing
• Failure: culture, communication and structure
• People: what, how and why
• From – to matrix
• Compellin” rel=”nofollow”>ing story

Assignment
• Lin” rel=”nofollow”>ink theory in” rel=”nofollow”>into practice
• Use change management architecture model?

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