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(3) Developing strategy - vision, mission, intent and strategic planning -…
(3) Developing strategy - vision, mission, intent and strategic planning
Vision
reset once goal reached
realistic, credible, attractive future for organisation (better in some important ways than present)
Mission
Central glue comprising strong norms influencing way people behave, how they work together, pursue organisation goals
Purpose
reason for existence, beneficiary of efforts
"What is our business, what should it be"
Strategy
desired positioning vs other companies
source of competitive advantage
certain behaviour for organisation success
Values
beliefs, moral principles behind behaviour standards
normally formulated by founding dynasty or dominant management team
morally upright, right way to behave
Behaviour standards
norms, rules of "way we do things here"
rationale for action
Strategic intent
Desired leadership position, criterion to chart progress
From mission, vision (future state + goal in competitive terms) - more of vision than purpose, strategy definition
"what business are we in", strategic position sought
Strategic planning
attain firm-environment alignment
integrate + control parts of firm
Value chain analysis
Compare your value chain with the industry's
Zero in on price drivers (high current or potential impact on differentiation)
superior value for customers by performing activities in distinctive way or activities not performed by competitors
value creation without commensurate costs
Lay out industry value chain
how far upstream or downstream do industry's activities extend?
Value-creating activities at each step
configuring activities to create customer value
Compare value chain of industry rivals to understand prices and costs differences
Zero in on cost drivers, special attention to activities that represent large or growing sales percentage
actual or potential cost differences between own and rivals' cost structures
Value chain: sequence of activities company performs to design, produce, sell, deliver, support products
(part of larger value system)
Life cycle
Growth through creativity leading to crisis of leadership
What is a good business model
Consider choices
assets
governance
policies
Consider consequences
flexible
rigid
Characteristics of good model
Create virtuous cycles
Robust (fend off threats)
slack (organisation complacency)
holdup (suppliers, customers, distributors or partners)
substitution
imitation (competitors)
Self-reinforcing
Aligned to company goals
Misunderstood trio
Business model
system of choices, consequences
reflect strategy
Tactics
residual range of choices (by business model)
Strategy
competitive advantage by defending unique position or exploiting valuable, idiosyncratic set of resource (VRIO)
contingent plan about which business model to use
plan to create unique, valuable position involving a set of activities
Business model canvas
From value proposition to business model
Toolkit for generating business model
From idea to value proposition
9 segments
Customer segments
for whom are we creating value?
most important customers
Mass market
Multi-sided platform
Niche market
Segmented market
Diversified
Channels
Most cost-efficient channels
Channel phases
Evaluation
Purchase
Awareness
Delivery
After sales
Channels that work best
Channels customer segments want to be reached
Value proposition
Bundle of products and services offered to each customer segment
Customer needs satisfied
Customer's problems helping to solve
Characteristics: newness, performance, customisation, design, brand, price, cost reduction, risk reduction, accessibility, convenience etc
Value delivered to customers
Customer relationships
Personal assistance
Self-service
How costly are the customer relationships?
Automated services
Established customer segments
Communities
Type of relationship expected to be established, maintained
Co-creation
Revenue streams
How would they prefer to pay?
How much each revenue stream contribute to overall revenues?
Value customers willing to pay
Asset sale
Advertising
Usage fee
Brokerage fees
Subscription fees
Licensing
Lending/ renting / leasing
Key resources
Distribution channels
Customer relationships
Value proposition
Revenue streams
Types of resources
Intellectual (patents, copyright, data)
Human
Physical
Financial
Key activities
Distribution channels
Customer relationships
Value proposition
Revenue streams
Categories
problem solving
platform/network
Production
Key partnerships
Key resources
Key activities
Key suppliers
Motivations for partnership
Reduction of risk, uncertainty
Acquisition of particular resources, activities
Optimization, economy
Key partners
Cost structures
Most expensive key activities
Cost driven or value driven
Most expensive key resources
Fixed costs, variable costs, economies of scale, economies of scope
Most important costs
From problem to idea