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MBAPRESENTATION CHEBOKSARY
Robin Matthews
FULL COPIES OF PRESENTATION AVAILABLE ON REQUESTrobindcmatthews@gmail.com
Please do not quote without acknowledgement
The meta modelOuter dynamics:; macro system co-opetition and competition Inner dynamics: the value chainPayoffs: stakeholders and competitive advantageGrammar: corporate culture
StrategyGeneric strategies: cost and differentiation
INTRODUCTION TO STRATEGY
THE META MODEL
META MODELOUTER DYNAMICS
Inner dynamics
payoffs
Outer dynamics
grammar
Payoffs to stakeholder groups
Global macro system
Rules, laws, regulations, structures, architectures, routines. Mindsets, culture, norms, values, habits, moods.
Intelligence rational and emotional.Formal and Informal, Inner and Outer.
Tangible and intangible Assets(includingReputation)
Competitors and co-operators
MARCS
12/10/2010 6
payoffs
Inner dynamics
Grammar: marcs
Outer dynamics
capabilities
META
MODEL
STRATEGIC ANALYSISOUTER DYNAMICS AND INNER DYNAMICS
IS THE move from E to E2 OR FROM E TO E3?
Current Business Environment
ECurrent
Capabilities
New Business Environment 1 E3
E2
Still have somecapabilities
New BusinessEnvironment 2
Need completelynew capabilities
META MODELOUTER DYNAMICS
COMPETITION
OUTER DYNAMICS COMPETITIVE DYNAMICS
META MODEL PAYOFFS
STAKEHOLDERS
• Shareholders• Creditors• Customers• Employees
• Community• Government• Ecology• Co-opetitors
COMPETITIVE ADVANTAGE
FAILURE
A B
RISK
RETURN
ab
Payoffs to shareholders
META MODELINNER DYNAMICS
THE VALUE CHAIN
Value chain (Porter)PRIMARY
• Outbound logistics• Operations
(manufacturing)• Inbound logistics• Marketing• Sales • Service
SUPPORT
• Infrastructure• Human resources• Purchasing• Technology
ASSETS• TANGIBL• (Capital)
• Physical• Financial• People• Working• Information• Knowledge
• INTANGIBLE(Capital)
• Reputation• Brands• Relationships• Trust• Learning • Creativity
Dynamic capability
• Sources of competitive advantage that it is difficult to copy
META MODEL GRAMMAR
McKinsey view of internal organizational grammar
COMPETITIVE STRATEGY
TO INCREASE VALUE OF THE FIRM
REDUCE COST INCREASE REVENUES DECREASE THE COST OF
CAPITAL
COST AND PRODUCTIVITY
Costsin the value chain
AVOIDABLE UNAVOIDABLE
F1
Sunk costsUnavoidable once incurred(True costs)
V
VariableAvoidable by cutting Down output(marginal costs)
F2
FixedAvoidable by going out of business
SEGMENTATIONAND PRICING
STRATEGY
DIFFERENT SEGMENTS/NICHESIN THE MARKET HAVE
DIFFERENT ELASTICITY
Effect on sales revenue of price reduction
Effect on sales revenue of a price increase
ElasticEp >1
Sales RevenueRISES
Sales Revenue FALLS
InelasticEp <1
Sales Revenue FALLS
Sales RevenueRISES
Revenues and differentiation
niches
Market segmentsMarket
segment
Whole market
SUMMARY
robinmatthewsembaoct2009
ACTIVITY CORRESPONDENCE IN THE STRATEGIC ENNEAGRAM
ORGANIZATIONAL GRAMMAR
Rules of the game Strategic decisions are subject to rules of the game or grammar:internal/externalformal/informalsocial/personal
MARCS =
Mind sets, Archetectures, Routines, Cultures, Structures
PROCESS Search Vision of alternative scenarios, and valuation of potential payoffs
1,4,2Search in (P),(Π)
Choice Choice (and commitment) of alternatives and Implementation
RISK
8,5,7Two mappings(Π)→(R)(P)→(R)
Adaptation Adaptation (monitoring and control) in response to miscalculations, gaps between actual and desired payoffsunexpected events and disappointed expectations
7,1; 2,8(Π)↔(R)(P)↔(R)
ANALYSIS Outer dynamicsInner dynamics
Strategic decisions as adaptation of inner dynamics (decisions about assets and activities both tangible and intangible) to outer dynamics. Strategic decisions are subject to organizational grammar.
93, 6
Grammar
Payoffs Payoffs are the outcomes of strategic analysis and process
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