* There is an island of opportunity in the middle of every difficulty.

Albert Einstein

*Chapter One Leadership, Strategy and Competitive Advantage

Dr. Jashim U. Ahmed

*Strategy

A clear vision of what the organization will be; based on a sustainable competitive advantage; specifying what must be done and the resources required.

*Strategy is War!

companies do compete aggressively - even viciously - for strategic advantage in a chaotic arena that is increasingly similar to the modern theater of war.

Source: E. K. Clemons & J. A. Santamaria, April 2002, Harvard Business Review

*Strategy Should IncludeA Clear understanding of the Companys Competitive AdvantageSpecific Objectives - Growth and ProfitsProducts and ServicesMarkets and CustomersPriority areas of BusinessInvestment, Organization, Resources and Skills requiredImplementation Plan

* The Five Elements of StrategyStagingWhat will be our speed and sequence of moves?VehiclesHow we will get there?

Economic LogicHow will we obtain our returns?ArenasWhere will we be active?Differentiators How will we win?Source: D. C. Hambrick & J. W. Fredrickson, 2001

*The Benefits of StrategyClarity of DirectionRationale for Future SuccessBasis for Resource Allocation Decisions Basis for Operational DecisionsIdentifies Critical IssuesCommunication ImprovedCommon Purpose Amongst Management

*Strategic ManagementSomething an organization needs or uses in order to win, or establish its legitimacy in a world of competitive rivalry strategy is what makes a firm unique, a winner, or a survivor.

Howard Thomas, 1993

*Levels of StrategyHQCorporate OfficeBusiness UnitPower PlantCorporate Strategy- where to invest- adding value by linking unitsBusiness UnitHospitalBusiness UnitReal Estates Functional strategiesBusiness Strategy - what we sell to whom - competitive advantageSales & MarketingDistributionService

* When Do You Need a Strategic ReviewExternal ChangesCompetitive ChangesEnvironmental Changes

Internal ChangesNew OwnershipNew TechnologyNew Management TeamPoor ResultsDifferences in Opinion

*Vision Vision is simply an inner picture of something, which has not yet happened. The vision set by leading companies on Europe and US requires the transformational style adopted so successfully in much admired companies like Shell, GlaxoSmithKline and Cisco Systems. Each began with an idea. A clear vision.

*Vision & Mission Vision is a possible and desirable future state of an organization. Mission is why a firm exists, its role in life. It is more associated with behavior and the present.

---A. Campbell and S. Yeung, 1991

*Vision & Competitive Strategy For commercial companies the vision statement needs to define a definite competitive strategy and the key activities to be invested in to provide competitive advantage.

* Compelling Vision Requires Three ComponentsSensitivity to the External Environment(important because every organization needs to adapt continuously to its situation).

Formulating a Compelling Vision(important because this provides a clear strategy for leadership).

Persuasively communicating the Vision(important because all employees need to be enrolled in fulfilling the compelling vision).

*Vision Vision is where tomorrow begins, for it expresses what you and others who shares the vision will be working hard to create. Since most people dont take the time to think systematically about the future, those who do - and who base their strategies and actions on their visions - have inordinate power to shape the future.Burt NanusVisionary Leadership

* The Four Parameters of Mission Purpose Values Strategy Behavior Standards

* Components of A Mission Statement

Mission statements can and do vary in length, content, format, and specificity. Most practitioners and academicians of strategic management feel that an effective statement exhibits nine components. Because a mission statement is often the most visible and public part of the strategic management process.

F. R. David, 2003.

* Nine Components of A Mission Statement Customers: Who are the firm's customers?Products or Services: What are the firms major products or services?Markets: Geographically, where does the firm compete?Technology: Is the firm technologically current?Concern for Survival, Growth and Profitability: Is the firm committed to growth and financial soundness?

F. R. David, 2003.

* Nine Components of A Mission Statement (cont.) Philosophy: What are the basic beliefs, values, and ethical priorities of the firm?Self-concept: What is the firm's major competitive advantage?Concern for Public Image: Is the firm responsive to social, community, and environmental concerns?Concern for Employees: Are employees a valuable asset of the firm?

F. R. David, 2003.

*Long-term Growth in Shareholder Value A Mission-Driven Company A Values-Centered Organization An Adaptable Business Strategy

W. W. George, Academy of Management Executive, 2001, Vol. 15, No. 4, p. 41.

*Why is Vision so Powerful?The key reason is that it grabs attention. It provides focus. Every organization has lots of ways to go. The outside world pulls it in every direction. Each has its own attractions. Yet, no organization can be all things to all people - not General Motors, not IBM, not even the United States of America.

Burt Nanus

* Issues for Strategic Management Where Are We Now? S.W.O.T analysis Where Do We Want to Be? Vision Mission - Goals - Objectives. What is Stopping Us? Organizational blockages. What Should We Do? Strategic action.

*Strategic Thinking ViewpointsSatisfying Customer Needs:

Customer Segments. Customer Perceptions. Unmet Customer needs. Future Customer Needs.

*Strategic Thinking ViewpointsSustaining the Competitive Advantage:

Competitive Interaction. Competitors Gaps. Cost versus Value. Competitors Reaction.

*Offensive Strategies Attack Competitors Strengths. Attack Competitors Weaknesses.Attack on Many Fronts Simultaneously.First-Mover Initiatives.Guerrilla Attacks.Pre-Emptive Strikes.

* Strategy Generation MethodsRedefine Product & Market ScopeSeek Opinions of External ExpertsImitate CompetitorsCreate Variations on an existing theme.Differentiate using Competitive Advantage.Become Lowest cost operatorFocus activitiesChange your sizeGive best QualityUse Different types of Portfolio Analysis.

*Strategic Growth Based OnNew Levels of Services/Product/DistributionNew TechnologiesNew ApplicationsProduct PerformanceDifferentiationInnovationDistinctive Skills or Resources

*Selections of StrategiesMust be Imaginative, Practical & Relevant.High Chance of Achieving Adequate Results.Does not Create Excessive Risk.Uses Organization's Major Strengths.Corrects or Neutralizes major Weaknesses.Exploits Major OpportunitiesEliminate or Reduces Major Threats.

*Final ThoughtAchieving maximum possible Differentiation over the Competition in Meeting Customer Needs.

Source: K. Ohmae

*Thank you

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