foundations of strategy: ch. 1
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Foundations of Strategy: Ch. 1. Shea Gordon, Kyle Harris, Bradley Peters, Matthew Powers . Lady Gaga. As the music industry changed so did her approach Ticket sales > CDs Recognized opportunities in social media Creative production team “ Haus of Gaga ” 360 Deals. James Dyson. - PowerPoint PPT PresentationTRANSCRIPT
Foundations of Strategy: Ch. 1
Shea Gordon, Kyle Harris, Bradley
Peters, Matthew Powers
Lady Gaga As the music industry
changed so did her approach
Ticket sales > CDs
Recognized opportunities in social media
Creative production team “Haus of Gaga”
360 Deals
James Dyson Initially Trained as a
designer at the Royal College of Art
Idea for Bagless Vacuum
Innovation was seen as a danger to the industry
Asian Market
Continued innovations
Alex Ferguson
1.Rebuilt scouting
2. Team > Individual 3. Relatively low funds 4. Knowledge of the
game
Went on to win 12 English Premier league titles
Goals that are simple consistent and long term
Profound understanding of the competitive environment
Objective appraisal of resources
Effective implementation
The Role of Strategy In Success
Greg “Ghostcrawler” Street Jumps From Blizzard To Riot Games
Lead Systems Designer for World of Warcraft (mmorpg)
Lead systems Designer for League of Legends (moba)
Profound understanding of the competitive environment Effective implementation?
Current Event
Sun Tzu’s Art of War
50’s-60’s: Financial Budgeting to Corporate Planning
70’s-80’s: Strategic Management
90’s: External to Internal Profit
A Brief History of Strategy
TMT (technology, media, telecommunications)
Continuous Change
Relentless Competition
CSR
Ethics
Sustainability of Natural Environment
Strategy Today
Overall Objective: How do we make money?Corporate Strategy: Industry Attractiveness: Which Industries?Business Strategy: Competitive Advantage: How to Compete?
Concepts used in ISQS 3344- Intro to Productions and Operations Management!
Corporate vs. Business Strategy
Static Strategy: Where do we want to compete? How do we compete?Dynamic Strategy: What do we want to become? What do we want to achieve? How will we get there?
Dyson’s Static/Dynamic Strategy
Static Strategy: Where does Intel compete? How does Intel compete?Dynamic Strategy: What does Intel want to become? What does Intel want to achieve? How will Intel get there?
Intel’s Static/Dynamic Strategy
Strategy is typically viewed as created by rational analysis, but is often the result of adaptation.
Intended Strategy Realized Strategy Emergent Strategy
How is Strategy Made? Design vs. Emergence
Strategy as decision support› Constrains the range of alternatives
“rule of thumb” Strategy as coordinating device
› Communication device› Strategy through goals, commitments and
performance Strategy as a target
› Sets aspirations to motivate and inspire Strategy as animation and orientation
› Achieves focus and plan
Rules of Strategy
Firms create different value for different groups:› Employees› Lenders› Landlords› Government› Owners
Stakeholder approach balances those interests
Shareholder approach values owner’s interests above all
Strategy: in whose interest?Shareholders vs. Stakeholders
The companies of English-speaking countries typically act in the interest of shareholders
The companies of Asian and continental European countries act in interest of stakeholders
During the 1990s, ‘Anglo- Saxon’ shareholder capitalism was in the ascendency
During the 21st century, shareholder value maximization started receiving bad perception.
The responsibilities of business to employees, customers, society and the natural environment are central ethical and social issues.
Strategy: in whose interest?Shareholders vs. Stakeholders
Profit maximizations provides convenient foundation for strategy analysis
The world’s most successful companies in terms of profit tend to be those that are motivated by factors other than profit.
Profit is only effective guide to action if managers know what determines profit
Profit and Purpose
IKEA
SAP
Gaia House (a Buddhist retreat center in England)
Examples of Purpose in Successful Organizations
What is the purpose of some of your favorite companies?
Can you think of any large businesses that are perceived to value profit more
than purpose?
Discussion
The corporate belief that a company needs to be responsible for its actions – socially, ethically, and environmentally.› UC Berkley
“Firm as property” or “firm as a social entity?”
Corporate Social Responsibility (CSR)
January 27, 2014, Intel ranked first on the Environmental Protection Agency’s Green Power Partnership Top Partner List.
Since 2008, Intel has been the nation's largest voluntary purchaser of green power.
In 2013, Intel increased its purchases of renewable energy to meet 100 percent of its electricity use.
Intel’s CSR
Is CSR a good thing?› Should a company serve the stockholder or
the stakeholder?
› “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits…” Milton Friedman
Discussion
“The foundations of mainstream strategy lie in analysis of competition and firms’ quests to outperform their rivals.”› Grant, Robert M. (2012-05-01).
Foundations of Strategy (Page 34).
Foundations of Strategy Approach
• As competition increases, the interests of different stakeholders converge around the goal of survival. Competition
• Management teams that fail to maximize the profits of their companies will be replaced by teams that do.
The market for corporate control
• Profitability over the long term requires loyalty from employees, trusting relationships with suppliers and customers, and support from governments and communities.
Convergence of stakeholder
interest• A key problem of the stakeholder approach is that
considering multiple goals and specifying trade-offs between them vastly increases the complexity of decision making.
Simplicity
Four Key Strategy Considerations
Strategic Fit
Strategy can create successful a performance, both for individuals and for organizations
Strategy origin and how it’s changed over time
Key questions and terminology in strategy
CSR debates Foundations of Strategy approach
Conclusion
Q&A