evolution of management systems strategic planning –analysis of firm’s prospects –competitive...

Evolution of Management Systems

• Strategic Planning– Analysis of Firm’s Prospects

– Competitive Analysis

– Strategic Portfolio Analysis• Closes the Competitive Gap

– Diversification Analysis

• Long Range Planning– Action Programs, Budgets, and

Implementation

• Strategic Planning– Balances Prospects against Objectives

to produce a strategy

• Strategic Posture Management

Strategic W

ork

Environment

Strategy

Capability

Environment

Strategy

Capability

S1 S2

E1 E2

C1 C2

Capability is introduced into Strategic

ManagementMentality-Culture-Power StructureSystems-Organizational StructureCapacity

CORPORATE MANAGERS/LEADERS

General Managers

Functional Management

“Workers”

R & D PRODUCTION MARKETING

LINE AND STAFF

THE STUDY OF ORGANIZATIONS

TOPDOWN

BOTTOM UP

Ansoff and McDonnell, 1990Created by Robert Moussetis, 2000

Organization's Behavior in the Environment

ORGANIZATION

Environment

TRANSACTION THROUGH LINKAGES = COMPETITIVE (OPERATING) BEHAVIORADAPTATION (CHANGE) OF LINKAGES = STRATEGIC BEHAVIOR


MARKET

PRODUCTSERVICE

PRESENT NEW

PRESENT

NEW

COMPETITION

PRODUCT INNOVATION

PRODUCT +MARKET INNOVATION

MARKET INNOVATION

ORGANIZATION’S BEHAVIORAL ALTERNATIVES


ENVIRONMENT

PROFIT/PERFORMANCEMAKING

STAKEHOLDERSLENDERS

STRATEGICDEVELOPMENT

StrategicData

Com

peti

tive D

at a

Profits Sales

New and

Historical ProductsInvestment

New Prototype Products/Technologies

Funds

THE PERFORMANCE ENGINE


-

++

-

History of a Strategic Change

LIFETIME ROI = + AREA- AREA

NET CASHFLOW


Strategic Diagnosis: Background

• Evolution of change Agenda makes it dangerous to base future plans on successful responses to historical challenges

• There is no single prescription for future success which will apply to all firms

• Management confronts two Key Problems– Each Organization

needs to diagnose its unique future challenges, threat and opportunities

– Each firm must design and implement its unique response to these challenges

Strategic Diagnosis: Definition

• A systematic approach to determining the changes that have to be made to a firm’s strategy and its internal capability in order to assure the firm’s success in its future environment

• Environmental Turbulence is a combined measure of the changeability and predictability of the firm’s environment– Complexity– Novelty– Rate of Change– Visibility

Strategic Diagnosis: Example

Environmental Turbulence

StrategicAggressiveness

Responsiveness of Capability

RepetitiveSlow

IncrementalFast

Incremental Predictable Unpredictable

Repetitive Expanding Changing Discontinuous Surprising

Custodial Adapts toChange

Seeks FamiliarChange

Strategic Flexible

Stable Reactive Anticipatory Entrepreneurial Creative

Strategic SegmentationStrategic Information ModelCompetitive Positioning


• How can we systematically “divide” our environment into “workable areas”?

• How do we make sure that the information we received from the environment involves legitimate (perceived) information?

• How do we systematically design a competitive organization?

• How do we interpret qualitative data?• Perception vs. Reality for Organizational

Leaders

SBA:A Strategic Business Area which is a distinct segment of the environment in which a firm does (or may

want to do) business

• In which SBAs will the firm do business in the future?

• What competitive position will the firm occupy in each SBA

• What competitive strategy will the firm pursue to gain this position

SBA Segmentation• Dimensions: Need, Customer

type, Technology and Geography

• Characteristics: Growth, Performance (Profitability), Turbulence and Success factors

• Strategic Resource Area: In the resource based postindustrial universe, managers have to balance what they want to do against what they can do

• Strategic Influence Groups: Firms increasingly legal and societal pressures - Stakeholder ManagementFirm Environment

SBA

SBUSBU

SBASBA1

SBA2


Critical mass

Optimal Mass

-

+ROI

INVESTMENT IN AN SBA

CRITICAL MASSCM: INVESTMENT BELOW WHICH A FIRM

BECOMES UNPROFITABLE IN AN STRATEGIC BUSINESS AREA


STRATEGIC SEGMENTATION

STRATEGIC SUCCESSHYPOTHESIS

FIRM’S OBJECTIVESSBA

PROSPECTS

STRATEGICDIAGNOSIS

SBAATTRACTIVENESS

TARGET COMPATITIVEPOSITIONING

PORTFOLIOPOSTURE

ENVIRONMENT

COMPETITIVE POSTURE IN SBA

ENTRPENEURIAL PLANNING

SBA

SBA

SBA

Degree of Preparedness


Strategic Information Model• Power Filter: It is nature for

managers and departments, whose power is threatened by discontinuities, to minimize or even refuse to recognize the impact of discontinuity.

• Mentality Filter: Rejection of novel information and predisposition on success models

• Strategic and Creative Mentalities focus on– Future, Novel and

Unfamiliar change– Entrepreneurial drive and

tolerance of failure

• Management Information

Environment

DataData

PerceptionPerceptionInformation

Actions

MentalityFilter

SurveillanceFilter

PowerFilter


Competitive Positioning• Estimating SBA

attractiveness– Global forecast– Future Turbulence– Historical Trends

extrapolated into the future

– Changes in the historical demand

– Overall shifts in growth prospects

– Numerical estimates of Future growth

– Future shifts in the profitability

• Boston Consulting Group matrix

Low

High

High

Low

?

CashCows Dogs

Volume Growth

Market Share as a functionof leading competitor

SBA Attractiveness = G + P + O - TAnsoff and McDonnell, 1990

Created by Robert Moussetis, 2000

Example: North Central College


• MBA• Educational Leadership• Biology• History

• Administrative Services– Admissions -Registrars -Financial Aid

• Academic Services– Advising - Technology Needs

• Facilities – Buildings and Services

– Recreational Activities

– Classrooms and Teaching Domains

Identify Future TurbulenceEstablish Strategic Aggressiveness

Establish Responsiveness of Capability

• STRATEGY (S)

• CAPABILITY (C)

• STRATEGIC INVESTMENT (I)

• GROWTH THRUST• (Domain) MARKET POSITION• (Domain )MARKET DIFFERENTIATION• SERVICE-PRODUCT DIFFERENTITION• CRITICAL MASS• VERITCAL INTEGRATION

• MANAGEMENT• FINANCE• MARKETING• R&D• PRODUCTION

• IN STRATEGY• IN CAPABILITY• IN FACILITIES

COMPETITIVE POSTURE IN AN SBA

POSTURE = SXCX(I-Icr)Ansoff and McDonnell, 1990

Created by Robert Moussetis, 2000

evolution of management systems strategic planning –analysis of firm’s prospects –competitive...

Documents