bimf 2011 lecture 1b

8/3/2019 Bimf 2011 Lecture 1b

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Introducing Strategy and

Strategic Management

Bent Steenholt Kragelund

[email protected]


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The need for a strategy

Would you tell me, please, which way I

ought to go from here?

That depends a good deal on where youwant to get to, said the Cat.

I dont much care where, said Alice.

Then it doesnt matter which way you

go, said the Cat.

So long as I get SOMEWHERE, Aliceadded as an explanation.

Oh, youre sure to do that, said the Cat,if you only walk long enough.

(Alice's Adventures in Wonderland


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Definitions of strategy

Strategy is the patternor plan that integratesan organisations major

goals, policies andaction sequences intoa cohesive whole

(Quinn, J., 1980)

Strategy is a pattern ina stream of actions

(Mintzberg and Waters,1985)

Strategy, in effect, ismanagements game plan for

strengthening the organisations

position, pleasing customers andachieving performanceobjectives. (Thompson andStrickland, 1996)

Strategy is the overallplan for deployingresources to establisha favourable position.(Grant, 1995)

Strategies are meansto ends, (Thompsonand Martin, 2010)


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Five Views of Strategy


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The Business Model

Positioning the company

A narrow product (or service) range fora broad range of customers

A broad product range for a definedsegment

A narrow range for a targeted niche

A broad range for a wide market

Key questions to address

What is different about our valueproposition?

Who are our customers?

What do customers value today?

What will customers value tomorrow?


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Three Perspectives of Strategic Analysis

Corporate

Strategy

The strategic perspective(range, scope, diversity)

of the organisation

Competitive / Business

Strategy

The search for a distinctcompetitive advantage for each

business / product / service

Functional /Operational

Strategy

The source of competitive

advantage in the activities andfunctions carried out by the

business


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Understanding of a companys current strategyMOST analysis

Mission (Vision)

Objectives

Strategy

Tactics


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Mission statements

Why mission statements ? Motivate and inspire the organisations employees

Provide a set of criteria for choosing between alternativestrategic options

Provide a yardstick for measuring the organisations

performance and re-evaluating strategy

Project a vision to the outside world of where exactly theorganisation is going


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5 key characteristics of a mission statement

It will contain a formulation of objectives that enablesprogress towards them to be measured

It differentiates the company from its competitors

It defines the business(es) that the company wants to be

in, not necessarily is in

It is relevant to all stakeholders in the firm, not justshareholders and managers

It is exciting and expiring

Russell Ackoff (1987)


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Mission Statements


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Mission Statements


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Mission Statements


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Objectives

Helps translate overall goals into more narrowly definedand accessible ends

Clear, focussed and specific

Measurable

Feasible and acceptable to the stakeholders

Consistent with the strategy

Economic as well as non-economic objectives


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Exercise

Why do organisations need to spend time definingmissions and objectives ?

Analyse 3-4 of the mission statements against RusselAckoffs criteria. Use either the ones supplied or chose

by looking at company web-sites. How could the missionstatements be improved ?


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Groups

Group 1

Frederik Emil Busk Fenger David Bo Bjerring Edward Hansen Giuliano Eugenio Hasberg Carette Jeppe Boesen Agerbo

Group 2

Andres Alejandro Nadal Llabres Eunice Teshela Munthali Johann Tau Gundersen Jacob Larsen Nikolaj Thiesen Nielsen

Group 3

Simon Gough Danil Rumenov Grancharov Laura Marie Holdrup Maria Ptursdottir Harprit Singh

Group 4

Olivier Blanger Despoina Stavrianou Philip Nrregaard Hargett Laila Mohamed Abdel S Abrahim John Mark Burnett

Group 5

Stephan Kallienke Hartmann Larsen Villads Riber Mink Alexander Adam Ryle Kristian Almlund Virkelyst Noah Ikpegbu

Group 6

Sabina sterby Joachim August Keittelmann Sigurd Tao Lyngse Sren Louv-Jansen Per Kiil

Group 7

Martin Dam Anne Dorthe Bolther Andersen Barbara Carboni Eman Hassen Mohamed

Haioty Kasper Hansen

Group 8

Jens Bak Frlund Tayaba Parveen Lasse Boisen Andersen Jakob Skovmand

Fonsbl


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Strategicanalysis

StrategicImplemen-

tation

Strategicchoice

Theenvironment

Expectations,objectives

and

powerResources

Resource

planning

Organisation

structure

Selectionof strategy

People andsystems

Evaluation

of options

Generation

of options

Johnson & Scholes (1993)


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Strategic Management: Awareness and Change


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Strategic Change


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SWOT Analysis

Useful to summarize the external and

internal analysis of the company

Strengths and weaknesses relates tothe internal aspects of the firm and canbe influenced by the organisation

Opportunities and threats are factors

in the external environment that has aneffect on the firm and which the firmcant influence

Remember:

Be specific avoid generalisations

List items in order of importance

Limit items to most important 6-7

InternalAnalysis

Strengths Weaknesses

ExternalAnalysis

Opportunities Threats


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Case: Nokia SWOT Analysis


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Case: Nokia

Founded in 1865 Headquarter in Finland

Initial business was paper mill, divested into electricity, galoshes,tires, cables, television, PCs, consumer electronics etc.

Divested most of the businesses in 1990s to focus ontelecommunication

Operates globally largest market is China (2010)

Worlds largest manufacturer of mobile phones with a (declining)market share of 30% in Q111

Substantial part of Finland's export and economy

New CEO Stephen Elop joined Nokia on September 21, 2010 fromMicrosoft

Partnership with Microsoft announced on February 11, 2011

Four business Units

Smart Devices

Mobile phones

NAVTEQ

Nokia Siemens Networks

http://www.nokia.com/about-nokia/company
http://www.nokia.com/about-nokia/companyhttp://www.nokia.com/about-nokia/companyhttp://www.nokia.com/about-nokia/companyhttp://www.nokia.com/about-nokia/company


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Case: Nokia Key figures

Figures in M2010 2Q 2011

Sales Operating profit Sales Operating Profit

Total 42.446 (+4%) 2.070 9.275 (-7%) - 487

Devices and

Services

29.134 (+5%) 3.299 5.467 (-20%) - 247

NAVTEQ 1.002 (+50%) - 225 245 (- 3%) - 58

Nokia SiemensNetworks

12.661 (+1%) - 686 3.642 (+20%) - 111


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Comparison of Apple, Nokia and Nasdaq index

Source: Nasdaq.com accessed 30.08.2011 @ 18.20


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Task

Assess Nokias Strengths

Weaknesses

Opportunities

Threats

Internal

External


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Backup


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Successful companies

Identify the key success factors inherent in theeconomics of each business.

Segment their markets so as to gain decisivecompetitive advantage

Measure and analyse any competitive advantage

Anticipate their competitors response

Stay ahead by looking for new competitive opportunities

Invest in businesses that promise a competitiveadvantage


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The Entrepreneurial Strategic Leader

Typically such managers will exhibit the following skills andattributes:

A tolerance of calculated risks A combination of leadership, general management and financial

skills Planning, time and project management skills Receptiveness to innovation A commitment to continuous learning A willingness to delegate Motivated by factors other than financial gain Self-confident, resilient and persevering Good communication skills.


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Positioning the Model

A narrow product (or service) range for a broadrange of customers

A broad product range for a defined segment

A narrow range for a targeted niche

A broad range for a wide market


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Figure 1.5 E-V-R congruence

bimf 2011 lecture 1b

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