Thinking Strategically: The Three Big Strategic Questions

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Thinking StrategicallyThe Three Big
Strategic Questions

• 1. Where are we now -- what is our situation?
• 2. Where do we want to go?
• Business(es) we want to be in and market
  positions we want to stake out
• Buyer needs and groups we want to
  serve
• Outcomes we want to achieve
• 3. How will we get there?

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What Is Strategy?
Concept

• Competitive moves and business approaches
  management employs in running a company
• Managements game plan to
• Please customers
• Position a company in its chosen market
• Compete successfully
• Achieve good business performance

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Why Are Strategies Needed ?

• o proactively shape how a companys business will
  be conducted

• To mold the independent actions and decisions of
  managers and employees into a coordinated,
  companywide game plan

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Developing a Vision and Mission
The First Task of Strategic Management

• Begins with thinking strategically about
• The firms future business makeup
• Where to take the firm
• The task is to
• Create a roadmap of a companys future
• Decide what future business position to stake out
• Provide long-term direction
• Give the firm a strong identity

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Examples Mission andVision Statements

• Intel
• Intel supplies the computing industry with chips,
  boards, systems, and software. Intels products
  are used as building blocks to create advanced
  computing systems for PC users. Intels mission
  is to be the preeminent building block supplier
  to the new computing industry worldwide.

Compaq Computer To be the leading supplier of
PCs and PC servers in all customer segments.
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Strategy Is Both Planned and Reactive to
Changing Circumstances
Planned (or Intended) Strategy
Actual Strategy
Adaptive Reactions
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Understanding Company Strategy -- What to
Look For
Diversification
Responses to Changing Conditions
Actions to Strengthen Resources Capabilities
How Functional Activities Are Managed
Offensive Moves to Gain Edge
Pattern of Actions That Define Strategy
Changes in Product Line, Quality, or Service
Defensive Moves
Pursuing New Opportunities
Geographic Coverage
Forward or Backward Integration, Collaboration
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Why Do Strategies Evolve?

• There is always an ongoing need to react to
• Shifting market conditions
• Fresh moves of competitors
• New technologies
• Evolving customer preferences
• Political and regulatory changes
• New windows of opportunity
• The crisis of the moment

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Strategy Implementation
Strategy implementation is an internal,
operations-driven activity involving organizing,
budgeting, motivating, culture-building, supervisi
ng, and leading to make the strategy work as
intended!
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What Does StrategyImplementation Include?

• Building a capable organization
• Allocating resources to strategy-critical
  activities
• Establishing strategy-supportive policies
• Motivating people to pursue objectives
• Tying rewards to achievement of results
• Creating a strategy-supportive corporate culture
• Installing needed information, communication, and
  operating systems
• Instituting best practices for continuous
  improvement
• Exerting strategic leadership

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Evaluating Performance

• Corrective adjustments
• Alter long-term direction
• Redefine the business
• Raise or lower performance objectives
• Modify the strategy
• Improve strategy execution

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Role of Strategic Planners

• Gather necessary information
• Provide support in revising strategic plans
• Coordinate review and approval process
• Crystallize strategic issues to be addressed
• Conduct studies of industry and competitive
  conditions
• Establish an annual review cycle
• Develop strategy performance assessments

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Strategic Role of aBoard of Directors

• Continuously audit validity of a companys
  long-term direction and strategy
• Evaluate strategic leadership skills of the CEO
  and candidates to succeed the CEO