Strategic Decision-Making in Business Management
Explore frameworks, views, and strategies in strategic decision-making for business management, covering resource-based and market-based views, phases of planning, and key concepts like competencies, capabilities, and strategic relationships.
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Presentation Transcript
DOCTORAL DEGREE IN BUSINESS MANAGEMENT PERSADA INDONESIA UNIVERSITY YAI 2020
Business Systems Complementors (C4) Center (C6) Company (C1) Channels (C5) Customers (C2) Competitors (C3)
RESOURCE AND MARKET BASED VIEWS Based RESOURCE-BASED MARKET-BASED Dimensions Drivers of Strategy Customer/ Competitors Unique Resources Derivatives Markets Resources Strategy Profiles Core Competencies Positional Appropriate Contexts Mature Markets Dynamic Markets
Phase 1 Basic Financial Planning Phase 2 Forecast-Based Planning Externally Oriented (strategic) Planning Phase 3 Phase 4 Strategic Management
Strategic Management Frameworks Framework SWOT (1960s) Strategic Planning Matrix (1970s) Competitiveness (1980s) Competency (1990s) Strategic Relationship (2000s) Perspective Inside-out and current Inside-out and future Outside-in and current Inside-out and future Outside in and future Innovation Management Value Based Management R&D Technology Management Total Management Approach Management Relationship Management Strategy Competitive Comparative Cooperative
CAPABILITIES MISMATCH EXTERNAL TRUST (TURBULENCE & DIVERSITY) CUSTOMER LOYALTY ? BUSINESS VALUE CAPABILITIS MISMATCH RESOURCES (RESOURCES LIMITATION) IMAGE SCH-2
Unrealized Strategy Realized Strategy Emergent Strategy Warren Kim : 2003
STRATEGIC DECISION FOR SUCCES Develop new opportunities /competences Strategic Decision Sustainabillity of success Exploit existing Opportunities / competences
CHARACTERISTIC OF STRATEGIC DECISIONS Create value Major resource commitment Long term commitment Difficult to reverse
STRATEGIC MANAGEMENT PROCESS (ADAP) ANALYSIS DECISION ACTION PERFORMANCE STRATEGIC SITUATION ANALYSIS STRATEGY IMPLEMENTATION EVALUATION & CONTROL STRATEGY FORMULATION FEED BACK
STRATEGY DEVELOPMENT PROCESS AND LEVEL STRATEGY DEVELOPMENT PROCESS AND LEVEL STRATEGIC SITUATION ANALYSIS (SSA) STRATEGY IMPLEMENTAT ION (SI) STRATEGY FORMULATION (SF) EVALUATION & CONTROL (EC) CORPORATE (EC) (SSA) (SF) DIVISION (SI) (EC) (SI) FUNCTIONAL (SSA) (SF)
STRATEGY DEVELOPMENT PROCESS EXTERNAL ENVIRONTMENT ANALYSIS (OPPORTUNITY AND THREAT) STRATEGY EVALUATION AND CONTROL STRATEGY FORMULATION STRATEGY IMPLEMENTATION Strategic Situation Analysis (TOWS) MISION VISION INTERNAL ENVIRONTMENT ANALYSIS (STRENGTH AND WEAKNESS) Feed Back Strategy Formulation Strategy Implementation Strategy Evaluation and Control Strategic Situation Analysis
STRATEGIC SITUATION RESOURCES/ INTERNAL M A R K E T O P P O R T U N I T Y STRONG AVERAGE WEAK 1 2 3 Winners Winners Selectivity A T T R A C T I V E N E S 4 5 6 A V E R A G E Selectivity Winners Losser 7 8 9 T H R E A T S Selectivity Losser Losser
The Industry Attractiveness Business Strength Matrix The Industry Attractiveness High Medium Low Investment and Growth Selective Growth Selectivity High Selective Growth Selectivity Medium Harvest / Divest Business Strength Harvest / Divest Harvest / Divest Low Selectivity Pankaj Ghemawat 11
Corporate Directional Strategies *GROWTH *STABILITY *RETRENCHMENT Concentration Vertical Growth Horizontal Growth Diversification Concentric Conglomerate Turnaround Captive Company Sell-Out / Divestment Bankruptcy / Liquidation Pause / Proceed with Caution No Change Profit
General Electrics Business Screen Winners A Winners B C High Question Marks D Industry Attractiveness Winners E Average Businesses F Medium Losers H Losers G Profit Producers Low Losers Strong Business Strength / Competitive Position Average Weak
BUSINESS COMPETITIVE FRAMEWORK : 3 BUSINESS COMPETITIVE FRAMEWORK : 3- -CAs MODEL CAs MODEL CA1 P O S I T I O N A L Unique Resources S P U E P R E F R O I R O M R A N B C U E S I N E S S Comparative Strategy Comparative Advantage CA2 Company Superior Value Competitive Advantage Competitive Strategy A D V A N T A G E CA3 Strategic Relationship Cooperative Strategy Cooperative Advantage Inferior Value Competitors 3-CA s Model (Sucherly, 2010)
STRATEGIC PLANNING (6-As MODEL) ARENA ADAPT Where to compete Why to compete Superior Business Performance ACTIVITIES ADVANTAGE When to compete Strategic Vision How Far to compete ACCOUNT ACCESS So Far to compete How to compete 6-A s Model (Sucherly, 2010)
INDUSTRY FACTORS - Competitive Forces - Cooperative Forces - Macro environment Profitability FIRM SPECIFIC FACTORS Resources Activities Positions Atuah,2004
Potential Entrants Threat of New Entrants Relative Power of Unions, Governments, Special Interest Groups,etc. Bargaining Power of Buyers Industry Competitors Other Stakeholders Buyers Suppliers Rivalry Among Existing Firms Bargaining Power of Suppliers Threat of Substitute Products or Services Substitutes
THE FIVE GENERIC COMPETITIVE STRATEGIES THE FIVE GENERIC COMPETITIVE STRATEGIES (each stake out a different market position) (each stake out a different market position) Types of Competitive Advantage Being Pursued Overall Low-cost Provider Strategy A Broad Cross section of buyer Broad Differentiation Strategy Market Target Best Cost Provider Strategy A Narrow Buyer Segment Or Market niche Focused Low-cost Strategy Focused Differentiation Strategy THOMSON : 2006
Competitive Advantage Lower Cost Differentiation Broad Target Cost Leadership Differentiation Competitive Scope Narrow Target Cost Focus Differentiation Focus
Retaining Customers Preventing Imitation Resources Capabilities Value Drivers Cost Drivers Defendable Market Position Superior Market Position Sustainable Competitive Advantage Gordon . W 77
SMARTER OBJECTIVES 1.Specific Result 2.Measurable 3.Audacious / Achievable 4.Result oriented 5.Time Bond / Time Specific 6.Encompassing (linkages) 7.Reviewed
Personal Balanced Scorecard Personal Ambition Self Knowledge Thinking Doing Self-knowledge serves as the Binding Tie in the PBSC concept ( Rampersad, 2005)
ORGANIZATIONAL BALANCED SCORECARD (OBSC) Financial To succeed Financially, how Should we appear to our Shareholders? Internal Business Process Customer Vision And Strategy To satisfy our shareholders And customers, what business processes must We excel at? To achieve our Vision, how should we appear to our customers? Learning and Growth To achieve our Vision, how will we sustain our ability to Change and Improve?
Financial ROCE Customer Customer Loyalty On-time Delivery Internal/Business Process Process Quality Process Cycle Time Learning and Growth Employee Skills
