1-1 business models stakeholders strategy & the 21 st century outcomes & basic definitions...

1-1Business Models

StakeholdersStrategy & the 21st Century

Outcomes & Basic Definitions

The Strategic Mgmt. Process

What is Strategy?

Competing Approaches

Mission & Vision

118

Chapter Three:

The External Environment

Chapter Three:


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Hitt, Ireland, Hoskission, Rowe & Sheppard

Strategic Management

N o

t e sChapter One:

Strategic Management & Strategic

Competitiveness

Competitiveness & Globalization

1-2Business Models




What is Strategy?


Mission & Vision

218

Strategic Management & CompetitivenessKnowledge Objectives

1. Define and list preferred Strategic Outcomes.

2. See how Industrial Organization & Resource-Based models show how firms earn above average returns.

3. Discuss the value of strategic vision & mission.

4. Discuss the the 21st Century Environment.

5. Describe stakeholders ability to influence firms.

6. Know how ‘Business Models’ differ from Strategies.

1-3Business Models




What is Strategy?


Mission & Vision

318

Desired Strategic Outcomes

Strategic CompetitivenessAchieved when a firm successfully formulates & implements a value-creating strategy.

Occurs when a firm develops a strategy that competitors are not simultaneously implementing.

Sustained Competitive Advantage

Above-Average ReturnsReturns in excess of what an investor expects to earn from other investments with similar risk.

Provides benefits which current and potential competitors are unable to duplicate.


1-4Business Models




What is Strategy?


Mission & Vision

418

Important Definitions

RiskAn investor’s uncertainty about the economic gains or losses resulting from a particular investment.

Returns equal to what an investor expects from other investments with similar amount of risk.

Average returns

Strategic management processThe full set of commitments, decisions and actions required for a firm to achieve strategic competitiveness & earn above average returns.


1-5Business Models




What is Strategy?


Mission & Vision

518

Implementation

Inputs

The Strategic Management Process

Chapter 5: Bus.-Level Strategy

Chapter 6:Competitive Dynamics

Chapter 7:Corp.-Level

Strategy

Chapter 8:Acquisition & Restructuring

Chapter 9:International

Strategy

Chapter 10:Cooperative

Strategy

Strategy Formulation

Chapter 11:Corporate

Governance

Ch. 12: Org. Structure & Controls

Chapter 13:Strategic

Leadership

Chapter 14:Org. Renewal & Innovation

Strategy Implementation

StrategicActions

Ch. 1: Strat. Mgmt. & Com-petitiveness

Ch. 2: Strat. Mgmt . &

Performance

Chapter 3:The External Environment

Chapter 4:The Internal Environment

Strategic Competitiveness

Strategic Mission & Strategic Intent

Strategic Objectives & Inputs

Chapter 1: Strategic

ManagementStrategic

Competitiveness


ManagementStrategic

CompetitivenessStrategic Vision & Intent / Mission

Formulation


1-6Business Models




What is Strategy?


Mission & Vision

618

What is Strategy?“A unified, comprehensive & integrated plan designed to ensure that the basic objectives of the enterprise are achieved.” (Glueck, 1980:9)“The pattern or plan that integrates an organization’s major goals, policies, & action sequences into a cohesive whole.” (Quinn, 1980)

… A good strategy… exploits opportunities & neutralizes threats while capitalizing on strengths & avoiding or fixing weaknesses.” (Barney, 1997:17)

“A pattern of resource allocation that enables firms to maintain or improve their performance.

An integrated & coordinated set of commitments & actions designed to exploit core competencies and gain a competitive advantage.

What is Strategy?

1-7Business Models




What is Strategy?


Mission & Vision

718

Intended, Emergent & Realized Strategies

IntendedStrategies Realized

StrategiesDeliberate Strategies

EmergentStrategies

UnrealizedStrategies

What is Strategy?

1-8Business Models




What is Strategy?


Mission & Vision

818

Intended, Emergent & Realized StrategiesExample 1: _________

Break into the Market New Ads &

channels Got into the

Market

New Customers

Sell to current types of customers

Break into the Market Build Mfg. &

Dist. Op.sGot into the

Market

New Channels

Sell to through current

channels

Thus, strategy can emerge from“a Pattern in the stream of decisions or actions”

Break into the Market New Ads &

channels Got into the

Market

New Customers

Sell to current types of customers

& 2: __________

What is Strategy?

1-9Business Models




What is Strategy?


Mission & Vision

918

Resource-BasedModel

Alternative Models of Superior Returns

Industrial Organization Model


An Attractive Industry


Assets and Skills


Superior Returns

Resources

Capabilities

Competitive Advantage

An Attractive Industry


Superior Returns

OOI


1-10Business Models




What is Strategy?


Mission & Vision

1018

Four Attributes that Create Competitive Advantage

Rare Held by few, or no, current and potential competitors.

Costly to When other firms either can- Imitate not obtain them or must obtain at a much higher cost.

Organized Supported by the appropriate to be structure, controls & rewards. Exploited

Valuable Allow firm to offset threats or exploit opportunities in its external environment.

CoreCompetencies

Are a basis for: Competitive

advantage;

Strategic competitiveness;

Ability to earn above-average returns.

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an

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ap

ab

iliti

es


1-11Business Models




What is Strategy?


Mission & Vision

1118

The 21st Century Environment

Values

Globalization

Technology

• Flexibility• Innovation• Integration

• Speed to market• Hypercompetition• Handling constant change

Global Economy: One where goods, services, people, skills & ideas move freely across geographic borders.

•Increasing rate of tech. change & diffusion;•Increasing knowledge intensity;•The information age.

Strategy & the 21st Century

1-12Business Models




What is Strategy?


Mission & Vision

1218

Strategic Vision Vision is a picture of what the

firm wants to be and, in broad terms, what it wants

to ultimately achieve.

Strategic Vision

Together, strategic vision & strategic mission yield the insights required to formulate and implement strategies.

The mission specifies the business or businesses in which the firm

intends to compete and the customers it intends to serve.

Strategic Intent / Mission

Mission & Vision

1-13Business Models




What is Strategy?


Mission & Vision

1318

Tim Horton’s Strategic Vision

“Our vision is to be the quality leader in everything we do.”Tim Horton’s Strategic Mission“Our guiding mission is to deliver superior quality products and services for our customers and communities through leadership, innovation and partnerships.”

Mission & Vision

1-14Business Models




What is Strategy?


Mission & Vision

1418

StakeholdersGroups who are affected by firm’s performance & have claims on its performance

The firm must maintain performance at an adequate level in order to maintain the participation of key stakeholders.

Firm

Product Market

Primary Customers Host CommunitiesUnionsSuppliers

Capital Market

Stock market/Investors

Debt suppliers/Banks

Organizational

EmployeesManagersNonmanagers

Stakeholders

1-15Business Models




What is Strategy?


Mission & Vision

1518

What are Business Models?Business models are at heart, stories that explain how enterprises work.

Who, What, When, Where, Why, How, and Are-you-sure.

They answer the critical questions of:

The Razor & Blade Model

King Gillette practically gave razors away & made money on the blades.

© 2009 by J. Sheppard

They allow us to think about customer value creation and corp. value capture separately.

& Xerox & Standard Oil.

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N

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Business Models

1-16Business Models




What is Strategy?


Mission & Vision

1618

What are Business Models?

• Who are the customers• What is the value proposition • Why• When • Are-you-sure

Price sensitive buyers. Low to no investment. Attract the most

buyers. New product

purchases. Lower buyer

investment.

B

O

N

U

S

Business Models

Today’s version of the

Razor & Blade Model.Neum

an

1-17Business Models




What is Strategy?


Mission & Vision

1718

What are Business Models?

1. Business models address a series of broad functions that create value for the customer, rather than activities;

2. Business models do not show how an organization’s activities are related, but the strategic value chain does;

3. Unlike the strategic value chain, business models do not address competitive advantage.

Porter notes 3 main differences between business models and strategies:

© 2009 by J. Sheppard

More importantly: Business models separate out the notion of:

• Value creation (for customers) versus,• Value capture (for the organization).

How do Business Models Differ from Strategies?

B

O

N

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Business Models

1-18Business Models




What is Strategy?


Mission & Vision

1818

The Strategic Management Process

Chapter 5: Bus.-Level Strategy

Chapter 6:Competitive Dynamics

Chapter 7:Corp.-Level

Strategy

Chapter 8:Acquisition & Restructuring

Chapter 9:International

Strategy

Chapter 10:Cooperative

Strategy


Chapter 11:Corporate

Governance

Ch. 12: Org. Structure & Controls

Chapter 13:Strategic

Leadership

Chapter 14:Org. Renewal & Innovation


StrategicActions

Ch. 1: Strat. Mgmt. & Com-petitiveness

Ch. 2: Strat. Mgmt . &

Performance

Chapter 3:The External Environment

Chapter 4:The Internal Environment

Strategic Competitiveness

Strategic Mission & Strategic Intent

Strategic Objectives & Inputs


ManagementStrategic

Competitiveness


ManagementStrategic



ManagementStrategic


1-1 business models stakeholders strategy & the 21 st century outcomes & basic definitions...

Documents

strategic leadership

level strategy chapter

international strategy

approaches mission vision

performance chapter

process slide

external environment

basic objectives