What is strategy?
Definition: strategy is what we want to do, what we want our organization to be & where we want it to go.
Why do we need a strategy?
- for understanding our position in the market place
- to give some sense of direction
- focusing on key issues
What does a strategy involve:
- Where are we now & how did we get there? What did we do well or badly to arrive at our current position
- What business are we in? Will this remain the same or will we need to change over business? If so, what?
- What factors, internal or external to the organization will or can have a telling impact on what we do in the future?
The steps written in "What does a strategy involve" above are a continuous process.
Where does strategy fit:
# Growth model
Growing market share by reduction in production cost & increasing sales
# Porter's 5 forces model:
# Growth by Mergers, Acquisitions & Takeovers
[Inorganic growth model]
- GE / Mckinsey Model [latest]
- BCG [old strategic tool]
- Value Chain -Porter
- Core Competitiveness - C K Prahlad/ Gary Hamel
- GE / Mckinsey Model
It's also called as Product Portfolio Matrix.
- Value Chain
- Core Competitiveness
- How does activity "X" significantly improve the end product for the customer?
- Does "X" offer access to a range of application & needs?
- What would happen to our competitiveness if we lost our strength in "X"?
- How difficult is it for others to imitate activity "X" & compete with us?
- 7S - Mckinsey
Ansoff, Porter, Prahlad, Hamel, Mintzberg, Goldratt, Tom Peters
Guidelines for strategic formulation:
- be different
- learn from the past
- change continuously
- be innovative
- involve people [CFT - cross functional team]
- external environment - SLEPTW analysis
- internal environment - SWOT
- competition - 5 forces model
While making a strategy, look for the following perspectives also:
- strategic horizon
- alternate strategy
During the process of strategic formulation:
- seriously question
- involve everyone
- avoid "paralysis by analysis"
- encourage & foster innovation & creativity
- go for a balance
- embrace conflict
- remember that strategy never stops
4 types of organizations:
- short lived
- learning organizations &
Strategic formulation & implementation:
Learning strategy frameworkSTRATEGY