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[BS-4] Strategic Positioning and Strategic Renewal, Group2 Team members,…
[BS-4] Strategic Positioning and Strategic Renewal
4-4 The Manager’s Journey: Advice from Our Experts
Recommendations for becoming an effective strategic leader
Sean Chou / CEO and Founder
Product development is the largest opportunity cost resource
Technology increase profit margins and value
Admit the fact of the mistake
Use a metric to measure the success of your experiment
Maintain a good relationship with customers
Listen to customer needs
Framing up dreams as the next big version of something that is currently big
a good strategy has a series of tactical plans
Kurt Bock / CEO and Country financial
Be an excellent listener
Know your own leadership skills
Know yourself by listening and encouraging open discussion
strengths and weaknesses
Be passionate and talk to people from non analogous companies
Al Goldstein / CEO and Founder, Avant
Using experience, judgment and thought to determine important and unimportant strategies
higher chance of success
Make some key decisions at the right time
Humility
Critically understand your own skills, strengths, and weaknesses, and then find areas where you can really use these strengths
Five to ten strategic decisions determine the direction of your business
4-1.1 Generic Business Strategies
Two main generic business strategies
Cost leadership
Emphasis on controlling costs ex:WALMART
If costs are in check, the price charge should be adequate to generate a nice profit
The profits are economic profits, which means that they are profits earned after paying the full cost of capital
Differentiation advantage
Emphasizes value creation for customers ex:NORDSTROM
Can charge a price premium above what its typical competitors may charge and still be able to track customers
Cost leadership
Reduce the expense producing the company's product or service
Drivers of cost advantages
Production techniques
Product design
Input costs
Capacity utilization
Scale/Learning economies
Important in some processing or manufacturing related industries
Once the main drivers of costs have been identified, we can turn to how these costs can be reduced
Bureaucracy or managerial inefficiency
Provide a very significant opportunity for a low-cost strategy
EX:Walmart
Use resources,capabilities and activities to reduce Walmart's input costs
Capability
Building a great procurement
Activities
Analyzing consumer buying behavior
Collecting price sensitivity data
Gathering detailed supplier cost data
Hardball negotiation tactics with suppliers
Resources
A good IT system for managing the logistics
A fleet of trucks
Developing strong supplier relationships
Differentiation advantage
Company need to do
Market research
Combine that with their own insights about customers
Common value drivers
Product features ex:cellphone
Customer service ex:hotel
Customization ex:Starbucks coffee
Complements
EX: Starbucks
Use resources and activities to creat customer value(Customization)
Activities
Every order gets repeated multiple times,which all customers here and thus begins to educate customers about how to customize their coffee orders
Resources
Good equipment, recruitment and training of its staff
Focused differentiation advantage ex:luxury products
Targeted at a narrower market segment and limited distribution channels
Promote exclusivity around the product
Help to contain costs
Focused low cost
Reduce costs by avoiding some customer segments that are too costly to serve
Ikea
Do-it-yourself furniture
Geico
The insurance only sells to customers through phone and Internet
Direct-to-customer channel and underprice other insurance
Hamburger chain checkers or rallies
Drive-thru business
Executive Expertise: Strategic Positioning
Country Finance
hit their target market with a value that they need
value added:advice
target market
middle-income households that have assets to protect
Fieldgalss
platform, ecosystem, and knowledge
compliance, quality, cost savings, and cycle time
overall offering(broad scope)
not just product sale
different industry had its own nuance
gas industry/ mining industry
safety compliance
financial services firms
cycle time, resources, platforns
Avant
differentiation across different dimensions
ease of use real time
provide great value
different from bank
service and customers orientation
transparency and clarity of product
regulatory environment and scheme
4-2.1 Dual Strategies
called integrated strategies as well
integrate some elements of cost reduction with some elements of differentiation
develop a competitive advantage
either pursue cost leadership or pursue differentiation advantage
if to do both, the company would be stuck in the middle
e.g.Swedish car company Saab
originally an aircraft manufacturer
1944 introduced its first car, the Ursaab
1960s, a very distinctive car,recognizable from the shape of its front and rear windshield
car owners were reputed to be highly educated
even accused of being snobs
1989, struggling to make profits with its traditional differentiated positioning
General Motors stepped in and acquired a 50% stake
to build multiple car models using a common platform
reduce costs by economizing on the fixed costs
1994 GM introduced a redesigned Saab 900,based on the Opel Astra platform.
greeted with howls of protests from Saab enthusiasts
a surging demand for pre-GM Saabs
2000 GM acquired the rest of Saab
2011 Saab was declared bankrupt
difficult to retain Saab's key features
any generic strategy constantly involves trade-offs
between cost and differentiation need to be made throughout the company in every part of the business
successful examples
Dell
build computers to order
making computers that may not sell at retailers
lower cost
allow users to customize their computers
avoid the costs of buying parts and holding them in inventory
increase customer value
Honda and Toyota
total quality management (TQM) practices in their design and manufacturing
high quality automobiles
fundamental management innovations really helped companies
decrease or at least control costs
increasing value as well
what to pursue
low cost
involve different trade-offs
result
the company may end up doing neither one very well, it becomes stuck in the middle.
solution
managerial innovation
provides a clear and
disciplined way
to manage the cost differentiation trade-off
differentiation
Module 4 Introduction
Strategic fit
Internal attributes
External environment
Three topics
Dual or integrated strategies
Stuck in the middle problem
Strategic renewal
Dynamic capabilities framework
Strategic Positioning:Generic Business Strategies
Align the internal & external environment
4-3.1 Strategic Renewal
Executive Expertise: Strategic Renewal
Startups
Significant advantages are inherent flexibility and adaptability
The way startups are able to do quickly is because of trust
Strategic renewal process is constantly pivoting
Find right product bargain fit both between product
Organization
It's difficult to change, because it may lose value in the change
Make the best decision with the best available information
Constantly learn :arrow_right: Change :arrow_right: Evolve
Maintain the market leader
Adding value to customers
Large established companies are harder making changes
losing strategic alignment
dynamic capabilities
processes
well-developed activities and routines
positions
resources owned and available
paths
opportunities, strategic options
misalignment between the company's environment and its own internal sources of potential competitive advantage.
e.g.Nokia and Blackberry who lost their prominent position in wireless phones
e.g.Circuit City laid off most of its talented sales people and replaced them with low-paid employees.
Course conclusion & Lego case
Gies Online Programs
Designed to
Designed to be career curated learning experiences
For
Having questioning on career
As a professional person but want to hone some skills
Core
Leadership
Communication
Critical thinking skills
Advantage
Convenient
Personal interest
Lego case
Key to success
tactile and creative experience
Large variety of products
Legoland
Lego Mindstorm
Robotic bricks
Video games
TV program
Clothing
Lego brick
Center produts
Strategy
Refocus on
Lego brick
Unrelated diversification
The Lego system of play
Keeping an eye on costs
Innovation to create customer value
Course conclusion
Key points
Incorporate both external and internal analysis
Organization leaders set the stage for strategy
Vision
Values
Mission
Building and sustaining a competitive advantage
Cost leadership or differentiation
Dual strategy
Group2
Team members
阮皓瑄 Nancy
陳睿瑩 Irene
Leader/陳仟容 Karen
周芷萱 Susan
李咨頤 Dorothy
楊怡雯 Wendy
廖柔嘉 Judy
The goal here is to reduce or eliminate unwanted costs that add very little or no value