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Strategic Management Leveraging Individual Strategic Thinking

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1 Strategic Management Leveraging Individual Strategic Thinking
to Produce Superior Organizational Performance by Alan W. Kennedy February 2015 © Alan W. Kennedy on behalf of Schulich Executive Education Centre (SEEC). All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, recording, photocopying or otherwise, without written permission of the copyright holder. Strategic Management © 2015 Alan W. Kennedy

2 Strategic Management © 2015 Alan W. Kennedy
Module 1 Course Introduction Strategic Management © 2015 Alan W. Kennedy

3 Strategic Management © 2015 Alan W. Kennedy
About the Presenter Alan Kennedy B.A. LLB. CMC Alan is a founding partner of Gibson Kennedy & Company, a Toronto consulting firm offering Canadian clients strategy counsel and competitive research services since Gibson Kennedy is the authorized correspondent in Canada for Kaiser Associates Inc., a Washington-based consultancy offering global competitive research services to North American based clients. Alan’s practice focuses exclusively on matters of strategy and capital projects planning and communication. Alan has extensive governance experience developed from attendance at more than 500 board meetings. Alan has been teaching Strategic Management for the Schulich Executive Education Centre since Alan is a member of the faculty for Management I, a one week course for new managers, and the Insurance Industry Leadership Program. Alan is a frequent speaker on matters of strategy, risk, and project management of major capital projects. Alan’s book, The Alpha Strategies – Understanding Strategy, Risk, and Values in Any Organization, listed as a Kirkus Best Books of 2013, is available at online retailers everywhere and at Alan is a Honor Roll CMC member of the Canadian Association of Management Consultants. Alan received his degrees from Dalhousie University and served as Senior Vice President & General Counsel for both Oxford Development Group and Campeau Corporation and as a member of the Board of Directors for both companies. Strategic Management © 2015 Alan W. Kennedy

4 Table of Contents Day One: Situation Analysis
Module 1: Course Introduction 1 – 1 – 27 Module 2: Getting Ready to Plan 1 – 28 – 39 Module 3: Internal Assessment 1 – 40 – 50 Module 4: External Assessment 1 – 51 – 60 Day Two: Strategic Planning Module 1: Course Introduction 2 – 1 – 27 Module 2: Getting Ready to Plan 2 – 28 – 39 Module 3: Internal Assessment 2 – 40 – 53 Module 4: External Assessment 2 – 54 – 71 Day Three: Business Planning Module 1: Strategic Plan Review 3 – 3 – 19 Module 2: Expectations of the Strategic Plan 3 – 20 – 35 Module 3: Impact of the Strategic Plan 3 – 36 – 46 Module 4: Business Plan Strategy Development 3 – 47 – 55 Schedules English Bay Situation Analysis Schedule “A” Tarion Strategic Plan Schedule “B” Goldstone Branch Business Plan Schedule “C” Bibliography Schedule “D” Strategic Management © 2015 Alan W. Kennedy

5 Your Expectations - Strategic Management © 2015 Alan W. Kennedy

6 How to prepare and to evaluate a situation analysis
Course Objectives How to prepare and to evaluate a situation analysis How to prepare and to evaluate a strategic plan How to prepare and to evaluate a business plan Strategic Management © 2015 Alan W. Kennedy

7 Module 1 Course Introduction Topics
An overview of the course and content for each day Deliverables The 12 modules The strategy model The 8 strategies 3 types of strategy Origins of the strategy system model Overview of strategy development process The 4 types of expectations driving strategy development The 3 steps in strategy development Definition of major terms to be used in the course Strategic Management © 2015 Alan W. Kennedy

8 Day 1 Day 2 Day 3 Produce a Situation Analysis
1. Course Overview Course Deliverables Day 1 Day 2 Day 3 Produce a Situation Analysis Produce a Strategic Plan Produce a Business Plan Strategic Management © 2015 Alan W. Kennedy

9 Situation Analysis Strategic Plan Business Plan
1. Course Overview Definitions Situation Analysis The knowledge base to support strategy decisions Strategic Plan A review of the 8 strategies common to all organizations Business Plan An alignment of functional activities with expectations created by the strategic plan Strategic Management © 2015 Alan W. Kennedy

10 Strategy Planning in 12 Steps
1. Course Overview Strategy Planning in 12 Steps 1. Choice of Planning Process: Should we be doing strategic planning or business planning? Situation Analysis 2. Scoping Expectations: Have we assessed the expectations for strategic planning? 3. Internal Assessment: Do we truly understand the what’s, how’s and why’s of our current strategy? 4. External Assessment: What factors in the external environment must we truly understand? 5. The Situation Analysis Review: Do we have enough understanding to support informed decisions? Strategic Planning 6. Issue Development: Are we able to connect external factors to the strategy framework? 7. Strategic Issue Identification: Are we able to develop scenarios to identify possible strategic issues? 8. Strategic Plan Communication: Have we described the likely “what” and “when” impact of change? 9. Strategic Plan Review: Do we understand the strategic plan and how it is likely to impact us? Business Planning 10. Expectations Impact: Can we identify the impact of strategic plan expectations on functional activities? 11. Expectations Testing: Are the strategic plan expectations consistent with competitive reality ? 12. Strategy Implementation: How are new expectations (if any) to be integrated with ongoing responsibilities? Strategic Management © 2015 Alan W. Kennedy

11 The 4 Steps of Situation Analysis
Identify Type of Planning Required Identify CEO / Board Expectations Conduct Internal Assessment Conduct External Assessment Confirm Responsibility for all 8 Strategies Identify Authority Group Convert 8 Strategies to Org Design Identify What Management Knows If less than 8, Go to Business Planning Assess Appetite for Change Evaluate Activity Strengths/Weaknesses Separate Need to Know from Nice to Know Prepare Scope for Planning Project Use Evaluation to Identify External Factors Study Factors for Actionable Information Strategic Management © 2015 Alan W. Kennedy

12 1. Course Overview Step Objective 1. Choice of Planning Process:
Should we be doing strategic planning or business planning? Identify Type of Planning Required Identify CEO / Board Expectations Conduct Internal Assessment Conduct External Assessment Confirm Authority for all 8 Strategies Identify Authority Group Assess Appetite for Change Prepare Scope for Planning Project Strategic Management © 2015 Alan W. Kennedy

13 8 Strategies are Common to all Organizations
2. The Strategy Model 8 Strategies are Common to all Organizations Strategic Management © 2015 Alan W. Kennedy

14 The starting point for all strategy
2: The Strategy Model The 8 Strategy Model Strategy General Description Business Definition / Mandate Focus on positioning the business / interpreting mandate parameters Risk Focus on the unacceptable and ways to manage it Growth Focus on type and rate of growth Financial Management Focus on sourcing, allocation, and management of capital & revenues R&D / Technology Focus on the creation and/or use of intellectual capital / technology Organization Mgmt Focus on sourcing, allocation, and management of human resources Marketing & Sales / Communications Focus on identifying and capturing customers / clients Service Delivery / Production / Manufacturing Focus on fulfilling the marketing / communication promise of value / relevance Strategic Management © 2015 Alan W. Kennedy

15 The Generic Sub-Strategies
2. The Strategy Model Business Definition / Mandate Business Positioning: Niche, Specialty, Commodity Mandate: Narrow Interpretation; Middle-of-the-Road; Broad Interpretation Risk Focus: Internal; External; Both Management: Accept, Avoid, Transfer, Reduce Growth Type: Internal, External (acquisitions, partnerships, alliances, joint ventures) Rate: Bigger, Smaller, No Change Financial Management Sourcing: Debt, equity, self-funding Allocation: Stars, Cash Cows, Question Marks, Dogs Management: Performance; Control, Both R&D / Technology Purpose: To enable productivity; to create competitive advantage Type: Follower, Leader, Adapter Organization Mgmt Sourcing: Internal; External Allocation: (Org Design) Centralized, Decentralized, Functional, Lines of Business, Geographical Management: Rigid Expectations, Flexible, Laissez-faire Marketing / Sales Communications Identifying: (Marketing 4Ps): Product / Service; Price; Place; Promotion Capturing: (Sales): Targeting; Approaching; Pitching; Converting; Closing; Follow-Up Service Delivery / Production / Manufacturing Needs / Requirements; Inputs Production Delivery Follow-up Strategic Management © 2015 Alan W. Kennedy

16 Source of The 8 Strategies
2. The Strategy Model Strategic Management © 2015 Alan W. Kennedy

17 3 Types of Strategy are Common to all Organizations
2. The Strategy Model 3 Types of Strategy are Common to all Organizations Strategic Management © 2015 Alan W. Kennedy

18 Source of the 3 Types of Strategy
2. The Strategy Model Strategic Management © 2015 Alan W. Kennedy

19 Strategic Management © 2015 Alan W. Kennedy
2. The Strategy Model Services Avoid Place Acquisitions Transfer Use Specialty Internal Growth Equity Production Debt Centralized Control Lines of Business Strategic Management © 2015 Alan W. Kennedy

20 The Dynamic Strategy System
2. The Strategy Model The Dynamic Strategy System Strategic Management © 2015 Alan W. Kennedy

21 4 Types of Expectations Driving Strategy Development
2. The Strategy Model 4 Types of Expectations Driving Strategy Development Strategic Management © 2015 Alan W. Kennedy

22 Strategy Development in 3 Steps
1. Getting the Facts / Becoming Informed Scoring 1 = Not Very Important = Neutral 7 = Very Important Name Focus on Process Results Comments 1 2 3 4 5 6 Strategic Management © 2015 Alan W. Kennedy

23 Process (Strategy) Very Important Process (Strategy) Not Important
2. Conducting Analysis 3. Strategy Development Process (Strategy) Very Important 7 6 5 3 2 1 Results (Metrics) Not Important Results (Metrics) Very Important Process (Strategy) Not Important Strategic Management © 2015 Alan W. Kennedy

24 Step 3: Strategy Selection
Development Process (Strategy) Very Important Results (Metrics) Not Important Results (Metrics) Very Important Process (Strategy) Not Important Strategic Management © 2015 Alan W. Kennedy

25 Strategy Development Characteristics
Strategy development is driven by imposed expectations Strategy development is fueled by timely & relevant facts The time required to become informed is usually underestimated The strategy development process should provide insight - possible choices of action - on current chosen strategy - on what is required to move from current strategy “Selling” a recommended strategy for approval is a different process Strategic Management © 2015 Alan W. Kennedy

26 Definitions of Major Terms
Strategy A description of chosen action Strategic Planning A review of the 8 strategies common to all for-profit and nonprofit organizations Business Planning Any subsequent strategy planning to implement the expectations of the organization’s Strategic Plan Strategic Issue A Strategic Issue is a question whether to replace or to improve existing strategy Strategic Management Strategic management is the leveraging of strategic thinking of individuals Strategic Thinking Strategic thinking is thinking about how imposed expectations and the realities of the external environment should impact the management of assigned responsibilities Expectations: Guidance on the hoped-for outcome Metrics: Anything expressed as a number Vision: A description of the successful outcome from long term pursuit of dominant strategy Strategic Management © 2015 Alan W. Kennedy

27 Module 1 Course Introduction Topics
An overview of the course and content for each day Deliverables The 12 modules The strategy model The 8 strategies 3 types of strategy Origins of the strategy system model Overview of strategy development process The 4 types of expectations driving strategy development The 3 steps in strategy development Definition of major terms to be used in the course Strategic Management © 2015 Alan W. Kennedy

28 Getting Ready for Planning
Module 2 Getting Ready for Planning It isn’t the unkown that gives us trouble. It what we know that ain’t so. Will Rogers Strategic Management © 2015 Alan W. Kennedy

29 Module 2: Getting Ready for Planning
Overview of output and process for situation analysis SWOT Analysis and how to make it more powerful Stakeholder Analysis - Identification of Stakeholders - Appetite / Expectations / Strategy Understanding Analysis Planning as a project Strategic Management © 2015 Alan W. Kennedy

30 Day One Output: Situation Analysis Report
2. Overview Day One Output: Situation Analysis Report The Scope of Acceptable Change The Planning Scope Internal Assessment Stakeholder Analysis & Appetite for Change Current Strategy Analysis and Configuration Customers & Markets Industry Analysis Competitors Trends Best Practices External Assessment Conclusions A listing of factors most likely to impact the Firm Preliminary insights on questions of strategy Strategic Management © 2015 Alan W. Kennedy

31 Confirm Responsibility
2. Overview Step 2 Objectives 2. Scoping Expectations: Have we assessed the expectations for strategic planning? Identify Type of Planning Required Identify CEO / Board Expectations Conduct Internal Assessment Conduct External Assessment Confirm Responsibility for all 8 Strategies Identify Authority Group Assess Appetite for Change Prepare Scope for Planning Project Strategic Management © 2015 Alan W. Kennedy

32 Strategic Management © 2015 Alan W. Kennedy
2. SWOT Traditional SWOT The TOWS Matrix, A Tool for Situational Analysis Heinz Weihrich, Strategic Management © 2015 Alan W. Kennedy

33 8 Strategy SWOT Analysis on English Bay
Under Norcross Control – Strategy Strengths & Weaknesses Not Under Norcross Control – External Factors (Opportunities / Threats) Strategic Management © 2015 Alan W. Kennedy

34 Strategic Management © 2015 Alan W. Kennedy
2. SWOT A Framework for SWOT The Alpha Strategies Strengths Weaknesses Opportunities Threats Business Def / Mandate Risk Growth Financial Management R&D /Technology Organization Mgmt Marketing/Sales /Comm Service Delivery / Production / Manufacturing Strategic Management © 2015 Alan W. Kennedy

35 Stakeholder Identification Who are the major stakeholders?
Stakeholder Categories Actual Stakeholders The Authority Group Those Stakeholders who approve the plan and authorize implementation The Involve Group Stakeholders who should be involved because of the role they will play in implementation The Inform Group Stakeholders who need to be told what to do so that their actions are consistent with implementation The Consider Group Any Stakeholders not falling in any of the above categories and who could have a response to implementation Strategic Management © 2015 Alan W. Kennedy

36 Stakeholder Categories
2. Stakeholders Stakeholder Expectations Now we know “Who” they are, what do they want? Stakeholder Categories Actual Stakeholders Expectations The Authority Group The Involve Group The Inform Group The Consider Group Strategic Management © 2015 Alan W. Kennedy

37 Scoping Appetite / Expectations / Understanding
2. Stakeholders Scoping Appetite / Expectations / Understanding Circle the symbol that is Norcross’ likely answer X means change is acceptable ● means change is not acceptable Question: What does it mean if not all 8 strategies can be candidates for change? Business Definition Risk Growth X X X X X Financial Management Organization Management X X Manufacturing (Outsourced) Marketing / Sales Store Operations X R&D / Technology Strategic Management © 2015 Alan W. Kennedy

38 Strategic Planning as a Project
2. Stakeholders Strategic Planning as a Project Project Element Description Objective Scope Methodology Schedule Major Mile Stones Deliverables Strategic Management © 2015 Alan W. Kennedy

39 Module 2: Getting Ready to Plan
Overview of output and process for situation analysis SWOT Analysis and how to make it more powerful Stakeholder Analysis - Identification of Stakeholders - Appetite / Expectations / Strategy Understanding Analysis Planning as a project Strategic Management © 2015 Alan W. Kennedy

40 Module 3 Internal Assessment
Strategic Management © 2015 Alan W. Kennedy

41 Module 3: Internal Assessment
Overview of process Configuring the strategy system Moving from strategy to organization design Current Strategy Performance Assessment - Strengths & Weakness Identification - External Factors Impacting Strategy Initial English Bay Strategy Conclusions Strategic Management © 2015 Alan W. Kennedy

42 Confirm Responsibility Strengths/Weaknesses Identify External Factors
3. Overview Step 3 Objectives 3. Internal Assessment: Do we truly understand the how’s and why’s of our current strategy? Identify Type of Planning Required Identify CEO / Board Expectations Conduct Internal Assessment Conduct External Assessment Confirm Responsibility for all 8 Strategies Identify Authority Group Convert 8 Strategies to Org Design Assess Appetite for Change Evaluate Activity Strengths/Weaknesses Prepare Scope for Planning Project Use Evaluation to Identify External Factors Strategic Management © 2015 Alan W. Kennedy

43 Configuring the Strategy System
Source: Seeingstrategy.com Strategic Management © 2015 Alan W. Kennedy

44 From 8 Strategy Model to Organization Design
3. Org Design From 8 Strategy Model to Organization Design Strategic Management © 2015 Alan W. Kennedy

45 From 8 Strategies to Organization Design
3. Org Design EB Organization 8 Strategy Framework EB Organization Design Business Definition Risk Oversight Norcross Growth Financial Management Financial Mgmt Lyons Technology - I.T. Organization Management Taglietalla - H.R. Marketing - Buying - Operations Mayweather Service Delivery / Productivity - Marketing - Store Operations Strategic Management © 2015 Alan W. Kennedy

46 From 8 Strategies to Org Design
EB Organization English Bay Organization Design Specific Activities Norcross business definition risk growth Oversight Borrowing Sale of EB / Joint Ventures New Store Openings Expenditures approval Lyons financial management technology Financial Mgmt Payroll Receivables Internal Accting - I.T. - Systems Admin Taglietalla - organizational management - H.R. - Compensation - Policy Admin Mayweather marketing service delivery / production - Buying Competitor surveys Hindsight analysis - Operations Receiving Sorting Reshipping - Marketing Product: Private Label Pricing: Value Promotion: In-store promos and direct mail - Store Operations Hiring Training Sales Strategic Management © 2015 Alan W. Kennedy

47 What are the EB functional strategies?
3. Strategy Performance 1. Within each function, which specific activity has become the functional strategy over time? 2. What makes functional strategy so hard to identify? EB Org Design Specific Activities Functional Strategy Oversight Borrowing Sale / J.V. New store openings Expenditure approval - Financial Mgmt Payroll Receivables Internal Accounting - I.T. - Systems Admin - H.R. - Compensation - Policy Admin - Buying Competitor surveys Prior Year Sales analysis - Operations Receiving Sorting Reshipping - Marketing Product: Private Label Pricing: Value Promotion: In-store promos / direct mail campaigns - Store Operations Hiring Training Customer Sales Strategic Management © 2015 Alan W. Kennedy

48 Likely External Factors Impacting Performance
Internal Assessment 3. Strategy Performance Step 3 Strengths Weaknesses Likely External Factors Impacting Performance Oversight - new store openings capability - micro-management style markets, customers, competitors Financial - real estate equity - budgeting process - discounts - dividends - financing terms - financial ratios - performance measures landlords -bankers – real estate markets - tax law - corporate law market for selling business I.T. - no use of technology Technology H.R. - Good people - no policies - communications - customer/product training - turnover – org mgmt - industry turnover rates competitive compensation competitor employment practices Buying - private label - 3 month cycle - quality issues Industry Change / Evolution fashion trends - customers supplier performance Operations - warehouse real estate value - shrinkage - inventory control - winter delivery - real estate market - Industry practices (e.g. EDI) Marketing - brand / image - private label success - customer lists - community focus - research - advertising - customer data - competitor data - product selections - customers - competitors market trends local markets Store Operations - below market rent - 22 stores upgraded varying performance low leases turning over store hours set by HO HO communications - lack of store mgr autonomy parking customers competitors local store markets Strategic Management © 2015 Alan W. Kennedy

49 Initial English Bay Strategy Summary
3. Strategy Conclusions Initial English Bay Strategy Summary Eight Strategies Strategy Business Definition High-end casual and related accessories in B.C. and Alberta Risk Owner-centric. Norcross involvement in all significant decisions Growth Internal growth through store openings Financial Mgmt debt Technology / R&D To support and enable productivity Organization Mgmt Head Office / Owner control Marketing / Store Operations If you build a store, they will come… Manufacturing Outsourced Strategic Management © 2015 Alan W. Kennedy

50 Module 3: Internal Assessment
Overview of process Configuring the strategy system Moving from strategy to organization design Current Strategy Performance Assessment - Strengths & Weakness Identification - External Factors Impacting Strategy Initial English Bay Strategy Conclusions Strategic Management © 2015 Alan W. Kennedy

51 Module 4 External Assessment
Strategic Management © 2015 Alan W. Kennedy

52 Module 4: External Factors Assessment
Overview of process The Major Categories of External Factors Issues in Customer Identification Overview of Market, Industry, & Competitor and Trends and Best Practices Initial English Bay Strategy Conclusions & Situation Analysis Report Strategic Management © 2015 Alan W. Kennedy

53 4. Overview Step 4 Objectives
4. External Assessment: What factors in the external environment must we truly understand? Identify Type of Planning Required Identify CEO / Board Expectations Conduct Internal Assessment Conduct External Assessment Confirm Responsibility for all 8 Strategies Identify Authority Group Convert 8 Strategies to Org Design Identify What Management Knows If less than 8, Go to Business Planning Assess Appetite for Change Evaluate Activity Strengths/Weaknesses Separate Need to Know from Nice to Know Prepare Scope for Planning Project Use Evaluation to Identify External Factors Study Factors for Actionable Information Strategic Management © 2015 Alan W. Kennedy

54 The Major Categories of External Factors
Stakeholder Expectations Customers & Markets Industry Dynamics Competitors Trends Best Practices Strategic Management © 2015 Alan W. Kennedy

55 Strategic Management © 2015 Alan W. Kennedy
Customer Analysis 4. Customer Identification 1. Who are our most important customers? 2. What criteria drive the customer’s purchase decision? 3. How do we compare, in the customer’s view, to the competition? 4. Which of our products and services are truly valuable to them? 5. What are the steps and who influences the purchase decision? 6. How are customer criteria and behavior likely to change? 7. What products and services are our customers going to need? Strategic Management © 2015 Alan W. Kennedy

56 Need / Risk Segmentation Analysis
4. Customer Identification Customer Analysis Restated for Public Sector Organizations 1. Who represents the greatest need / greatest risk that our services are intended to address? 2. What drives them to use / come into contact with us? 3. How do we compare to alternatives to address the need / risk? 4. Which of our programs / services are truly valuable to them / address the problem effectively? 5. What are the steps and who influences their decision to use us / encourages their behaviour? 6. How is user need / risk behavior likely to change? 7. What services are users going to need / will be required to manage evolving risk? See also: Banishing Bureaucracy 1998, David Osborne Strategic Management © 2015 Alan W. Kennedy

57 Markets – Clusters of Customers
4. External Factors Growth 1 – shrinking market and/or market share 4 – only able to maintain existing business 7 – significant growth in market and/or market share Profitable 1 – not profitable 4 – break-even 7 – very profitable Competition 1 – significant competition 4 – competition is manageable 7 – no competition Strategic Management © 2015 Alan W. Kennedy

58 Demand Analysis Methodology Market Analysis Restated for Public Sector
4. External Factors Purpose To identify specific opportunities for priorities over the planning period Grid Design Horizontal Axis – specific products or services Vertical Axis – specific clusters for those services Scores For each cell, assign a score from 1 to 7 for each of the following variables. Growth of Need / Risk Assess the potential for growth of the need / risk programs / services 1 – shrinking overall need / risk 4 – no change from today 7 – significant growth in need / risk Sustainability Assess the likely financial sustainability of delivering services to meet the need / risk 1 – sustainability is a great risk 7 – sustainability not a risk Alternatives Assess the attractiveness of emerging alternatives to address the need / risk 1 – significant attractive alternatives are becoming apparent 4 – no change in alternatives apparent 7 – no attractive alternatives emerging or apparent Cell Scoring Each cell score is the total of the variables scoring for that cell Highest score: 21, representing a need / risk on which we should focus Lowest score: 3, representing limited perceived value to addressing need / risk Strategic Management © 2015 Alan W. Kennedy

59 Demand Analysis in the Public Sector
4. External Factors G=Growth S=Sustainability A = Alternatives Services Need / Risk Segments G= S= A= Total Strategic Management © 2015 Alan W. Kennedy

60 Industry Dynamics 4. External Factors
Segment What is my chosen market called? Segment Size / Growth How big is it and is it growing? Segment Dynamics What dynamics are most shaping the segment? (e.g. competitive rivalry, customers, suppliers, entry barriers, alternatives) Critical Success Factors What must a competitor do to succeed given the dominant industry dynamics? Segment Evolution How is this segment likely to change over time? Strategic Management © 2015 Alan W. Kennedy

61 Industry Positioning Critical Success Factors Industry Evolution
Competitor Analysis 4. External Factors Industry Positioning Who do I compete with in my market segments? What segments are my competitors focusing on? - What segments should I focus on? Critical Success Factors - What must I truly understand about my competitors? (e.g. strategies, strengths, weaknesses and areas of relative performance) Industry Evolution - Who are my future competitors? What functional areas are likely to become the most important in the future? Strategic Management © 2015 Alan W. Kennedy

62 Competitor / Alternatives Analysis Restated for Public Sector
4. External Factors Competitor / Alternatives Analysis Restated for Public Sector Service Sustainability Who is offering / can offer alternatives to our services? What segments are they focusing on? - What segments should we focus on? Critical Success Factors - What must we understand about alternatives / competitors? (e.g. strategies, strengths, weaknesses and areas of relative performance) Service Evolution - Who / What are the future competitors / alternatives? What functional strengths are likely to become the most important in the future? Strategic Management © 2015 Alan W. Kennedy

63 Trend Analysis in 3 Steps
4. External Factors 1. Source of Trends - The Family 2. What is the Emerging Trend? - “Kids” not moving out 3. What’s the impact on us? - “Kids” influencing parents’ buying decisions? Strategic Management © 2015 Alan W. Kennedy

64 Benchmarking Analysis
4. External Factors Is a process for comparing organizational performance and processes to “Best-in-Class” performance and using insight from the comparison to improve ways and improve performance Benchmarking Determine what to Benchmark Identify Key Performance Variables / Measures Identify the “Best-in-Class” Organizations Research Performance of “Best-in-Class” Organizations Make Performance Comparisons Recommend Improvements Obtain Commitment to Implement Strategic Management © 2015 Alan W. Kennedy

65 External Factors Conclusions
Research Overall Conclusions Customer Analysis EB customer needs research Market Analysis Markets don’t support seem to support most EB stores. Industry Analysis Entry of more and more well-financed competitors using technology and multi, cross, and omni-channels Competitor Analysis EB is a very small specialty retailer Trend Analysis Technology is changing the nature of retailing Benchmarking Analysis EB is not competitive when benchmarked against the lowest of benchmarks: the industry average. Strategic Management © 2015 Alan W. Kennedy

66 Which one strategy is being most impacted?
4. Conclusions Customers & Markets Competitors Industry Dynamics Trends Best Practices Strategic Management © 2015 Alan W. Kennedy

67 Module 4: External Factors
Overview of process The Major Categories of External Factors Issues in Customer Identification Overview of Market, Industry, & Competitor and Trends and Best Practices Initial English Bay Strategy Conclusions & Situation Analysis Report Strategic Management © 2015 Alan W. Kennedy

68 Day One Deliverable: The Situation Analysis
Produce a Situation Analysis Day 2 Produce a Strategic Plan Day 3 Produce a Business Plan Strategic Management © 2015 Alan W. Kennedy

69 - Review the Day 2 Binder Materials
Day Two – Preparation - Read the Tarion Case - Review the Day 2 Binder Materials - Identify the top 3 external factors you believe Tarion must address because those factors will significantly impact Tarion over the next 3 to 5 years Strategic Management © 2015 Alan W. Kennedy


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