HOW STRATEGY SHAPED STRUCTURE

Introduction “Instead of letting the environment define your strategy craft a strategy that defines your environment.” Says by authors of Blue Ocean Strategy.

DEFINITION OF STRATEGY “Strategy is defined as the develpoment and allignment of the three propositions to either exploit or reconstruct the industrial & economic environment in which an organization operates.”

TYPES OF STRATEGY  Structuralist Strategy in which we assume that operating environment is given.  Reconstructionist Strategy which seeks to shape the environment.

CHOOSING OF RIGHT STRATEGY APPROACH  A strucuralist approach is a good fit when:-  Structure conditions are attractive & resource and capabilities to build a distinctive position.  Less attractive but sufficient resources and capabilities.  The organization has a bias toward defending current strategic positions and a reluctance to venture into unfamiliar territory.

 A reconstructionist approach is a good fit when:-  Structure condition are attractive but players are well-entrenched and the organizaton lacks the resources or capabilities to outperform them.  Structure condition are unattractiveness and they work against an organization irrespective of its resources and capabilities.  The organization has an orientation toward innovation and a willingness to pursue new opportunities.

THE THREE STRATEGY PROPOSITION  Value proposition that attracts buyers.  Profit proposition that enables the company to make money out of the value proposition.  People orientation that motivates those working for or with the company to execute the strategy.

Types of strategy failure  Execution failure  Formulation failure.

ACHIEVING STRATEGY ALLIGNMENT  Structualist strategy can be achieved when allignment of three strategy proposition in is done in pursuit of either differentiation or low cost.  Reconstructionist approach can be achieved when the allignment of three strategy is done in pursuit of both differentiation or low cost.

DUBAI STRATEGY PROPOSITION  VALUE PROPOSITION  100% foreign ownership  Free repatriation of capitals and profits  To lower foreign investors cost, it charges no import and re-export duties.  There is no corporate tax  Registration process is of one and half hour  Documentation is in English & Emirates transparent legal system is based on British Law.  World class airport and shipping services to make logistics of doing business more effective.

PROFIT PROPOSITION Government has invested in infrastructure and support the investors activities which have allowed the govt. to directly profit from its unique low cost proposition. Example:- DP World is 80% owned by govt. operates Jebel Airport and complex in Dubai where 6000 companies are based. Nakheel which is wholly owned by Dubai is world’s biggest real estate developers. Emirates airlines ownership, the govt. makes money on the high volume of business travelers and cargo flowing into Dubai. Operates globally that generates more money. 50 ports in 31 countries which strong revenue growth for the state and a global reputation for quality.

DUBAI PEOPLE PROPOSITION Generous social system and are virtually guaranteed a govt. job. They receive extensive state assistance, including medical care, sickness and maternity benefits, child care, free of subsidize education, pensions, unemployment benefits & in some instances housing and disability benefits. Preserves Dubai culture and heritage by promoting virtual boundaries between citizens and foreigner.

Free plots of land, interest free loans and grants to build homes on the outskirts of city. Islamic religious teaching along wit modern teaching. No income tax. Luxury real estate costs one fifth to one- third than it does in other major commercial center. Dubai differ from India and China by allowing foreigners to own their properties outright.