6000 - week 1 - corporate strategy framework - sept 2015

7/23/2019 6000 - Week 1 - Corporate Strategy Framework - Sept 2015

1/65

Corpor

ateStr

ategyCours

e

Framework

SGM

T6000

Session1

Profe

ssorChar

lesMcMillan

charl

esmcmilla

nsgi@gm

ail.com

September17,2

1-2015


2/65Q

uickOverviewofCourse

Manyc

oursenamesBusiness

Strateg

y,

StrategicManag

ement,

CorporateStrate

gy,

Leadershipand

Strateg

y,etc..

Multipleviewpointshistorical,

econom

ic,psych

ological,

organizational;

Multipletools:casestudies,cross-

section

al,longitudinal,au

thorinsights,

statisti

cal,etc.;

DifferentLevels

Functio

nal,Business,

Corporate,

Enterprise.


3/65Se

archingfor

theH

olyGr

ail


4/65


5/65

6000CourseF

ramework

Studyo

fStrategy

fortheOr

ganization

as

anIntegratedWhole;

BestPra

cticeOrga

nizationalF

ramewor

kvs.

HowOrganizationsareMana

ged;

Strategy:Integrationofbeh

avioural

science,economic

s,andbas

icstatistics;

CoreTheme:Canadianfir

msdontplay

Hardba

ll.


6/65

SGMT6

000ThreeV

iewpoints

IdealLearning

Experience

Real

Chore=

TooMan

yReadings,

Requir

edCourse

SGM

T601:

Necessary

Fram

eworks

Swee

tSpot


7/65

T

imeFrames:De

cadesSinceEarly1950s

Morecomplexity,GlobalMind-Set

Case

Studies

Theor

yof

TheF

irm

Competitive

Positioning

Corporate

Alignments

BrandValue

Networks,

TimeBased

EvolutionofStrategicMana

gement


8/65

StrategicManagem

ent

Setofd

ecisionsandactions

thatresultin

formula

tionandexecutionofideasand

plansto

achievek

eyobjectives;

Futureorientation

ofafirm,

providing

coordinateddecision,

based

oninterna

l

capabilitiesagains

texternale

nvironmental

benchm

arks;

Strategy

usuallyinvolvesth

reelevels:

Organiz

ational,bu

siness,an

dfunctional.


9/65C

orporateStr

ategy

Models

Industry

Positioning

Value

Positio

ning

Asset

P

ositioning

C

orporate

Strategy

LifeCycles

C

ompetitive

F

orces

Innovations

Sta

rtups

Tra

nsformations

ExploitComp

etencies

StretchAssets

ReinforcingStrengths


10/65Str

ategicChoice:ForkintheRoad


11/65H

istory

ofStr

ategy

Ancient

Writers;

SunTsu

Military

Practitioners:

Caesar,Geng

hisKhan

MilitaryWriters:

Machiav

elli,

VonClaus

ewitz,

Napole

on

KeyConcepts:

Manoeuvre,unityofcommand,

Surprise,deception,

simplicity

Ad

am

Sm

ith

Da

vidRicardo

KarlMarx

Dru

cker

Schumpeter

MaxWeber/

FredTaylo

r

KeyConcepts:Man

agement,

Innovation,Competitiv

eAdvantage,

Inn

ovationHumanP

sychology

Thuswemayknowthattherearefiveessentialsforvictory:

1Hewillw

inwhoknow

swhentofightandwhen

nottofight.

2H

ewillw

inwhoknowshow

tohandlebothsuperiorandinferiorforces.

3Hewillw

inwhosearmyisanim

atedbythesamespiritth

roughoutallitsranks.

4Hewillw

inwho,preparedh

imself,waitstotakethee

nemyunprepared.

5Hewillw

inwhohas

militarycapacityandisno

tinterfered

with

bythesovereign.

Sun

Tzu,

TheArtofWar
http://www.goodreads.com/author/show/1771.Sun_Tzuhttp://www.goodreads.com/author/show/1771.Sun_Tzuhttp://www.goodreads.com/author/show/1771.Sun_Tzuhttp://www.goodreads.com/author/show/1771.Sun_Tzuhttp://www.goodreads.com/author/show/1771.Sun_Tzuhttp://www.goodreads.com/author/show/1771.Sun_Tzuhttp://www.goodreads.com/work/quotes/3200649http://www.goodreads.com/work/quotes/3200649http://www.goodreads.com/work/quotes/3200649http://www.goodreads.com/work/quotes/3200649http://www.goodreads.com/work/quotes/3200649http://www.goodreads.com/work/quotes/3200649http://www.goodreads.com/work/quotes/3200649http://www.goodreads.com/work/quotes/3200649http://www.goodreads.com/work/quotes/3200649http://www.goodreads.com/work/quotes/3200649http://www.goodreads.com/work/quotes/3200649http://www.goodreads.com/work/quotes/3200649http://www.goodreads.com/author/show/1771.Sun_Tzu


12/65


13/65Strategy

LearningfromHistory


14/65En

vironme

ntalCha

nge:Vo

latilityI

ndex
http://e.businessinsider.com/3cba.eyj/Ta31MQDhFi1poGqNB6cfe


15/65F

ourT

StrategicA

nalysis

Countries

Branding

Promotions

Pro

cesses

Products

Engineering

IT

Tools

Daily,

Weekly

In-House

QCTools

Ca

shflow

Borrowing

Sha

rePrice


16/65Vision,S

trategy,and

Tactics

Vision

DiverseAudience

B

roadDirection

LongTerm

Inspirational

Enduring

HighEnergy

Strategy

DecisionMakers

Top

Priorities

Med

iumTerm

De

clarative

Stable

Di

rectional

Tactics

Operations

Exe

cution

ShortTerm

TakingCharge

Cha

nging

M

ap

Leadership,

theOrganization,andC

apacityforChange


17/65


18/65Strategy:AMatterof

Timing


19/65Glo

balizationand

itsConseque

nces


20/65S

GTMinBusin

essSchools

Traditionally,majorintegrating

coursetotalv

s.silo-functionalv

iew;

Noone

model

Harvardcasestudy

approa

ch,

highly

theoretical(Chica

go);

Othert

ools:businessplan,studyfirm

(Oslermodel),s

tudynon-business

approa

ches;

Harvard:Spend

atermin

apoor

country.


21/65T

heBusinessofBusiness

Schools


22/65


23/65Co

reThesis:Busin

essSch

oolsare

like

Lu

xuryGo

ods:Los

ingTheir

Luste

r

Likefashiongoo

ds,rapid

growth

means

declinein

quality;

Coreproductisdebasedb

ybad

theorie

staughtbyweaktheorists;

MBASc

hoolsfac

eBipolar

Shopping

DisorderWeak

Schools

wantthe

BusinessModeloftheTopSchools,

withou

tthePayoffFew

schoolsm

eet

theLou

isVuittonBrandA

dvantage


24/65Ma

nagem

ent:T

heNewSourceof

Co

mpara

tiveAdvanta

ge

HugeG

rowthin

BusinessEducation

2000+

Schools

;

ThreeLevelsTop20(M

ostly

Americ

anHarvard,

Wh

arton,plus

LBS,IN

SEAD),next20-3

0butwith

larged

rop,

then

therest

.

TopSc

hoolsenjoy,apartfromFa

culty

sizean

dcriticalm

ass,lo

cation

(financ

ialcenters),firstrate

universitybrand

,andglo

balname

professors.


25/65


26/65


27/65

P

roductivit

yandMan

agementS

coresbyCountry

Country

OverallScore

Mo

nitoring

Targetin

g

Incentives

SampleSize

Canada

3.1

3

3.3

5

3.0

2

3.0

2

344

USA

3.3

3

3.4

4

3.2

3

3.3

0

695

Britain

2.9

8

3.1

6

2.9

3

2.8

8

762

Sweden

3.1

8

3.5

4

3.2

2

2.8

6

270

Japan

3.1

5

3.2

0

3.2

5

2.9

0

188

Germany

3.1

8

3.4

0

3.2

4

2.9

5

336

SOURCE:AdoptedfromBloomandR

eenen(2010).


28/65

Performance

Time

Strategy

Gap

TheoreticalOutput:

Knowledge,

Change,

ResourceAllocations,

Will,Finan

ce,

Luck A

ctual

Output:

Growth,B

enchmarks

Th

eory:Business

SchoolsImpro

veManagemen

tQuality


29/65SourceofMBAThinking/Course

Content

1970s+

AcademicWorld/IntellectualContent

ConsultingAdap

tation

BestPractice

2000+

BestPrac

tice(FirmsApp

le,

GE,

Toyota,e

tc.)

Consulting

Busines

s

Schools


30/65C

orpora

teStrategyDe

velopm

ent

Be

stPracticeCom

panies

(BestoftheBreed,

BestandtheRest)

Glo

balConsulting

Companies,

Investment

Banks

Busines

sSchools

(FirstTier-Theoretical

Work;SecondTier-

Dissemination

Fac

tories

Journals,

Conferences

Executiv

eEducation,

Publish

ingHouses

Corporate

Universities

MultipleWorkAssignments,Careers,Te

aching,Publis

hing


31/65Aca

demics

vs.

Consultants

Advanta

ges

Well

train

edfromb

es

t

schools;

Academicsarehighly

focused(

butalso

narrow);

FewTime

pressures;

Publicdo

main,

free

fromn

arrowinterests;

Publisho

rPerish;

USDomination

(English)

;

Hierarchy

ofJournals

;

Acce

sstofirmsa

nd

internalcorporate

date

;

Reputationof

Consultants(pra

ctical)

vs.A

cademics(t

oo

abst

ract);

Consultantshave

Talent,resources,and

spee

d;

Hugedatabase

of

benc

hmarks,

indu

stries,andg

lobal

reac

h;

Strongdisseminat

ion

chan

nels,media,

journ

als;

LeadingAcad

emicAdvantages

Leading

ConsultantAdv

antages


32/65Aca

demics

vs.

Consultants

Advanta

ges

Academicstalkto

themselv

esviaunrea

d

journals;

Narrowd

isciplinary

focus;

Toooften

,datadrives

research

topics;

Methodologiesdrive

dataanalysis:survey

s,

cross-sec

tional,Publi

c

statistics;

Hierarchy

ofJournals

andscho

olsinhibit

publicdis

semination.

Revenues,not

intellectualinsight,

drivesbusinessmodel

forc

onsultants;

Prob

lems

olving

drives

cons

ultingplatfo

rms

(e.g.

Competitive

Forc

es,

Process-

Re-

Engineering,

Tim

e-

Base

dCompetition);

Over-generalizationof

findingsfromsp

ecific

indu

stries,

firms;

Mark

etreputatio

n

drivessales

repu

tation.

AcademicD

isadvantages

Consu

ltantsDisadvan

tages


33/65

CorporateStrateg

yAndLev

elsofAna

lysis

High

Impact

G

lobal:

Energ

y,Internet,

Technology,

Etc.

R

egional:

e.g.Europe,

Latin

America

Industry

Impacts:

Te

chnology,

F

inancial

Corporate

Strategy

Competitiv

Advantage


34/65C

hanging

Focuso

fCorporateStra

tegy

Price:

Co

stLeadership

Tools:

Scale,Experience

Curves,

C

ostAnalysis,

Indus

trystructurean

d

s

upplycurves

Positioning

Tools:

BCGGrow

th/

ShareMatrix

GEMatrix

McKinsey

7s

Scenario

s

Processes

Tools:

ValueChain

QualityTQM

Balanc

edScore

Board

Resou

rce-Base

T

i m e

People

Tools:

C

ollaboration

Strategic

Alliances

Networks

BlueOcean

C l

d C

i

TheFourPsofStrateg

y:

1970sPriceLowCostLeadership

1980sIndustryPo

sitionandPortfolioAnalysis

1990sOrganization

alProcessesan

dCapabilities

2000+-People,

Networks,Sust

ainability


35/65

NewM

odels:

Synthesisof

MultipleView

s

Recog

nitionoftheGlo

balGam

e;

Extrem

ecomp

lexityandvolatility

ofthe

Externa

lEnvironment;

Needformultipletalents,

viewpoints,un

derstan

dingofcore

streng

ths.


36/65

Organi

zationalGrowth

Strategies

Energizing

The

Business

G

oing

International

Leveraging

The

Business

Creating

New

Business

Growth

Strategies


37/65T

hreeW

avesofGlobalization


38/65

Countries

andTheWealthCreationProcess

WealthC

reation:

PerCapitaGNP

Factor

Endowme

nts:

D.

Ricar

do

Scale&

Specialization:

A.

Marsh

all

Science-B

ased

Innovation:

Schumpeter


39/65

Globalization:AManagem

entGap?

Sourcesof

We

alth:

1.Factor

Endowments

2.Scale

Economies

3.Scienc

eInnovation

Mana

gement

Inno

vation

USA:100,000MBAs

Canada:

7000MBAs

China:10,000MBAs

Globalization

Gap?

PerCapita

G

DP

Impact


40/65


41/65

Domestic

Environment

Domestic

Domestic

Environme

nt

Environme

nt

ValueCh

ains

sophistic

ation

Adjustm

ent

ValueCh

ain

ValueChainss

sophistic

ation

sophistic

ation

Adjustm

ent

Adjustm

ent

EntryExit

B

arriers

Ad

justment

Entry

EntryExit

Exit

B

arriers

B

arriers

Ad

justment

Adjustment

ountry

rowth

Time

MarketOpenness

MarketOpenness

International

Expansion

International

ExpansionN

ewRulesan

dPlayers

NewRulesan

dPlayers

Global

Competition

Global

Competition

GlobalGrow

thModelforIndustries

GlobalGrow

thModelforIndustr

ies


42/65

Flows

of

Resources,

People

and

Informa

tion

amon

g

IndependentUnits

Distributed

Resources

&

Capabilities

TheCorporateCenter

TheCorporateCenter

ComplexCoordinatio

n:

C

ooperation&SharedDe

cision

Making,Culture

InternationalO

rganization

InternationalO

rganization

Operationsabroad

AppendagestoHQ

TightPlanningand

Controllinkages

Assets,

Decisions

Decentr

alized,butHQ

controlled

GlobalOrganization

GlobalOrganization


43/65

ORGANIZATIONALPSYC

HOLOGY

ORGANIZATIONALPSYC

HOLOGY

MACRO

-ECON

OMICS

MACRO

-ECON

OMICS

Institutional

Focus

Organization

al

History

Resource-b

ased

Perspective

Entrepreneurial

vision

POLITIC

ALECONOMY

POLITIC

ALECONOMY

1.

Compe

titiv

e

Focus

2.

Tec

hnol

og

ica

l

Pos

ition

ing

3.

Internal

Compete

nces

4.

Organ

izati

ona

l

Effec

tiveness

StrategicPositioning

Organizatio

nalLearning

CoreCompetencies

STRATEGIC

STRATEGIC

OPTIONS

OPTIONS

ORGANIZATIONALPSYC

HOLOGY

ORGANIZATIONALPSYC

HOLOGY

MACRO

-ECON

OMICS

MACRO

-ECON

OMICS

Institutional

Focus

Organization

al

History

Resource-b

ased

Perspective

Entrepreneurial

vision

POLITIC

ALECONOMY

POLITIC

ALECONOMY

1.

Compe

titiv

e

Focus

2.

Tec

hnol

og

ica

l

Pos

ition

ing

3.

Internal

Compete

nces

4.

Organ

izati

ona

l

Effec

tiveness

StrategicPositioning

Organizatio

nalLearning

CoreCompetencies

STRATEGIC

STRATEGIC

OPTIONS

OPTIONS

Glob

alManagement

Glob

alManagementGlobalCompetition

GlobalCompetition


44/65

Global

In

tegration

Worldwide

L

earning

National

Responsiveness

Tiltingto

Intern

ational

Tiltingto

Global

Tiltingto

Multinational


45/65E

cosystemC

ollaboration


46/65

AUTOIndustry:MBAsv

s.

Engineers

AUTOIndus

try:MBAsv

s.

Engineer

s


47/65Be

nchm

arkso

fGoo

dStra

tegy

A

uniquev

alueproposition;

A

different,tailore

dvalue

chain;

A

ctivitiesinvaluec

hainarealignedand

r

einforce

eachoth

er;

C

learand

understandabletradeoffs

c

hoosingwhatnottodo;

T

hreeCsStrategi

ccontinuity,

c

ommitm

ent,and

constan

t

improvem

ent


48/65StrategyandtheGeneralMan

ager

General

Ma

nagement

Tasks

Vision,

Mission,

Values

Imp

lementation:

People

I

Perform

ance

Measures

Setting

Direction

,

Creating

Strategy


49/65T

heComplexities

ofaBus

inessMo

del

ValueProposition

Target

Segm

ent

Produ

ct/Service

Offering

Revenue

Model

Busine

ssModel

Operat

ingModel

Value

Chain

Cost

Model

Organ

izational

De

sign


50/65

Strategyand

Opera

tions

Strategy

Strong

Flawed

Strong

Operations

Weak

Valu

e

Creation

Bad

M

anagement

Poo

r

Execution

Value

D

estruction


51/65

WhyFlawedStrategy?

ProtectedMarke

t

Techno

logyObs

olescence

PoorM

anageme

nt/Leade

rship

Slack:

EasyAcc

esstoRe

sources

BadBu

sinessPlan:ValueProposition

All

oftheAbove


52/65I

mpactofBadStrategie

s


53/65FiveCompetitiveForce

sofIneffectiveLea

dership

Low

Organizational

Innovation

CapacityToListen

StrongHierarchy

Group

Think

DataD

eterminesAnalysis

Organ

izationalParalysis

Skills&Competencie

s

Lo

ngevity

YesMenCulture

To

pDownBureaucracy

BiasTowardsthePast

CelebratesExecutiv

es

Capacity

ToLearn

SingleLoopDecisions

BudgetsDetermineActio

n

Strong

RulesCulture

ShortT

imeHorizons

CapacityToMotivate

PayIncen

tivesOnly

DaytoDa

yActions

StrongRu

mourMill

HighPsychologicalExit

WorktoR

ule


54/65

BadStr

ategicChoices


55/65

Strateg

y:Why

PoorE

xecutio

n?

Deming:85-15

Rule

OrganizationalStructure

,Design

HRT

raining

Techno

logy-Peo

pleSyste

ms,

Interfa

ce

PoorLearningT

ools,

Lea

dership

Myopia

All

oftheAbove


56/65

StrategicDile

mmas

for

Managers

G

lobalSyst

emC

ompetition(Oil,

China)

C

ompetitiveDynamic

s(Hardball

S

trategies)

C

reativeDe

struction-

Technology

D

isruption(Schumpeter)

I

nternalDy

namics:C

ulture,

Integration

P

oliticalFra

meworks(ColdWar,

T

errorism,

ThirdWorld,etc.,

Re

gulations,

C

SR)

I

nternet,Communica

tionsRevo

lution


57/65

Worst

Strateg

y:

Sweep

ingunderthe

Rug


58/65

DefiningtheBusiness


59/65


60/65ManagingOrgan

ization

alRenewal:

Th

eDomain

sofEntre

preneuria

lLeaders

Markets

NewExisting

Existing

DistinctiveCompetenciesNew

Domain

of

Leaders


61/65

Indust

ryHar

dball

Deva

stateRiva

lsProfitS

anctuarie

s

Plagiarizewith

Pride,

i.e.

Learn

DeceivetheCo

mpetition

:Surprise

Unlea

shOverw

helmingForce4t

s

Raise

CompetitorsCosts

Tools

ofRuthle

ssIntensity,

Willt

o

Win
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62/65

SGMT6000

Twoca

sewrite-upsInd

ividual(5

-6

pagesnoextra

material-Internet

search

needed);

RequiredReadin

gsImp

ortanceo

f

Certain

papers;

GroupProject

endofco

urse;

FinalExam.

Eachse

ssionopeningstudent

questio

ns


63/65

Course

Prepa

ration

CourseText,Readings

Preparation,

Th

inking,C

oreTopics

Outsid

eReadin

gs/Handouts

Cases:Prepara

tion,

Thinking,

Conclu

sions

ClassPreparation:OneLesson

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64/65Ca

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65/65

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6000 - week 1 - corporate strategy framework - sept 2015

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