Upload
aria-claiborne
View
216
Download
0
Tags:
Embed Size (px)
Citation preview
1-1Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
118
Chapter Three:
The External Environment
Chapter Three:
The External Environment
© 2 0 0 9
Hitt, Ireland, Hoskission, Rowe & Sheppard
Strategic Management
N o
t e sChapter One:
Strategic Management & Strategic
Competitiveness
Competitiveness & Globalization
1-2Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
218
Strategic Management & CompetitivenessKnowledge Objectives
1. Define and list preferred Strategic Outcomes.
2. See how Industrial Organization & Resource-Based models show how firms earn above average returns.
3. Discuss the value of strategic vision & mission.
4. Discuss the the 21st Century Environment.
5. Describe stakeholders ability to influence firms.
6. Know how ‘Business Models’ differ from Strategies.
1-3Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
318
Desired Strategic Outcomes
Strategic CompetitivenessAchieved when a firm successfully formulates & implements a value-creating strategy.
Occurs when a firm develops a strategy that competitors are not simultaneously implementing.
Sustained Competitive Advantage
Above-Average ReturnsReturns in excess of what an investor expects to earn from other investments with similar risk.
Provides benefits which current and potential competitors are unable to duplicate.
Outcomes & Basic Definitions
1-4Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
418
Important Definitions
RiskAn investor’s uncertainty about the economic gains or losses resulting from a particular investment.
Returns equal to what an investor expects from other investments with similar amount of risk.
Average returns
Strategic management processThe full set of commitments, decisions and actions required for a firm to achieve strategic competitiveness & earn above average returns.
Outcomes & Basic Definitions
1-5Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
518
Implementation
Inputs
The Strategic Management Process
Chapter 5: Bus.-Level Strategy
Chapter 6:Competitive Dynamics
Chapter 7:Corp.-Level
Strategy
Chapter 8:Acquisition & Restructuring
Chapter 9:International
Strategy
Chapter 10:Cooperative
Strategy
Strategy Formulation
Chapter 11:Corporate
Governance
Ch. 12: Org. Structure & Controls
Chapter 13:Strategic
Leadership
Chapter 14:Org. Renewal & Innovation
Strategy Implementation
StrategicActions
Ch. 1: Strat. Mgmt. & Com-petitiveness
Ch. 2: Strat. Mgmt . &
Performance
Chapter 3:The External Environment
Chapter 4:The Internal Environment
Strategic Competitiveness
Strategic Mission & Strategic Intent
Strategic Objectives & Inputs
Chapter 1: Strategic
ManagementStrategic
Competitiveness
Chapter 1: Strategic
ManagementStrategic
CompetitivenessStrategic Vision & Intent / Mission
Formulation
The Strategic Mgmt. Process
1-6Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
618
What is Strategy?“A unified, comprehensive & integrated plan designed to ensure that the basic objectives of the enterprise are achieved.” (Glueck, 1980:9)“The pattern or plan that integrates an organization’s major goals, policies, & action sequences into a cohesive whole.” (Quinn, 1980)
… A good strategy… exploits opportunities & neutralizes threats while capitalizing on strengths & avoiding or fixing weaknesses.” (Barney, 1997:17)
“A pattern of resource allocation that enables firms to maintain or improve their performance.
An integrated & coordinated set of commitments & actions designed to exploit core competencies and gain a competitive advantage.
What is Strategy?
1-7Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
718
Intended, Emergent & Realized Strategies
IntendedStrategies Realized
StrategiesDeliberate Strategies
EmergentStrategies
UnrealizedStrategies
What is Strategy?
1-8Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
818
Intended, Emergent & Realized StrategiesExample 1: _________
Break into the Market New Ads &
channels Got into the
Market
New Customers
Sell to current types of customers
Break into the Market Build Mfg. &
Dist. Op.sGot into the
Market
New Channels
Sell to through current
channels
Thus, strategy can emerge from“a Pattern in the stream of decisions or actions”
Break into the Market New Ads &
channels Got into the
Market
New Customers
Sell to current types of customers
& 2: __________
What is Strategy?
1-9Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
918
Resource-BasedModel
Alternative Models of Superior Returns
Industrial Organization Model
The External Environment
An Attractive Industry
Strategy Formulation
Assets and Skills
Strategy Implementation
Superior Returns
Resources
Capabilities
Competitive Advantage
An Attractive Industry
Strategy Implementation
Superior Returns
OOI
Competing Approaches
1-10Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
1018
Four Attributes that Create Competitive Advantage
Rare Held by few, or no, current and potential competitors.
Costly to When other firms either can- Imitate not obtain them or must obtain at a much higher cost.
Organized Supported by the appropriate to be structure, controls & rewards. Exploited
Valuable Allow firm to offset threats or exploit opportunities in its external environment.
CoreCompetencies
Are a basis for: Competitive
advantage;
Strategic competitiveness;
Ability to earn above-average returns.
Re
so
urc
es
an
d C
ap
ab
iliti
es
Competing Approaches
1-11Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
1118
The 21st Century Environment
Values
Globalization
Technology
• Flexibility• Innovation• Integration
• Speed to market• Hypercompetition• Handling constant change
Global Economy: One where goods, services, people, skills & ideas move freely across geographic borders.
•Increasing rate of tech. change & diffusion;•Increasing knowledge intensity;•The information age.
Strategy & the 21st Century
1-12Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
1218
Strategic Vision Vision is a picture of what the
firm wants to be and, in broad terms, what it wants
to ultimately achieve.
Strategic Vision
Together, strategic vision & strategic mission yield the insights required to formulate and implement strategies.
The mission specifies the business or businesses in which the firm
intends to compete and the customers it intends to serve.
Strategic Intent / Mission
Mission & Vision
1-13Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
1318
Tim Horton’s Strategic Vision
“Our vision is to be the quality leader in everything we do.”Tim Horton’s Strategic Mission“Our guiding mission is to deliver superior quality products and services for our customers and communities through leadership, innovation and partnerships.”
Mission & Vision
1-14Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
1418
StakeholdersGroups who are affected by firm’s performance & have claims on its performance
The firm must maintain performance at an adequate level in order to maintain the participation of key stakeholders.
Firm
Product Market
Primary Customers Host CommunitiesUnionsSuppliers
Capital Market
Stock market/Investors
Debt suppliers/Banks
Organizational
EmployeesManagersNonmanagers
Stakeholders
1-15Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
1518
What are Business Models?Business models are at heart, stories that explain how enterprises work.
Who, What, When, Where, Why, How, and Are-you-sure.
They answer the critical questions of:
The Razor & Blade Model
King Gillette practically gave razors away & made money on the blades.
© 2009 by J. Sheppard
They allow us to think about customer value creation and corp. value capture separately.
& Xerox & Standard Oil.
B
O
N
U
S
Business Models
1-16Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
1618
What are Business Models?
• Who are the customers• What is the value proposition • Why• When • Are-you-sure
Price sensitive buyers. Low to no investment. Attract the most
buyers. New product
purchases. Lower buyer
investment.
B
O
N
U
S
Business Models
Today’s version of the
Razor & Blade Model.Neum
an
1-17Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
1718
What are Business Models?
1. Business models address a series of broad functions that create value for the customer, rather than activities;
2. Business models do not show how an organization’s activities are related, but the strategic value chain does;
3. Unlike the strategic value chain, business models do not address competitive advantage.
Porter notes 3 main differences between business models and strategies:
© 2009 by J. Sheppard
More importantly: Business models separate out the notion of:
• Value creation (for customers) versus,• Value capture (for the organization).
How do Business Models Differ from Strategies?
B
O
N
U
S
Business Models
1-18Business Models
StakeholdersStrategy & the 21st Century
Outcomes & Basic Definitions
The Strategic Mgmt. Process
What is Strategy?
Competing Approaches
Mission & Vision
1818
The Strategic Management Process
Chapter 5: Bus.-Level Strategy
Chapter 6:Competitive Dynamics
Chapter 7:Corp.-Level
Strategy
Chapter 8:Acquisition & Restructuring
Chapter 9:International
Strategy
Chapter 10:Cooperative
Strategy
Strategy Formulation
Chapter 11:Corporate
Governance
Ch. 12: Org. Structure & Controls
Chapter 13:Strategic
Leadership
Chapter 14:Org. Renewal & Innovation
Strategy Implementation
StrategicActions
Ch. 1: Strat. Mgmt. & Com-petitiveness
Ch. 2: Strat. Mgmt . &
Performance
Chapter 3:The External Environment
Chapter 4:The Internal Environment
Strategic Competitiveness
Strategic Mission & Strategic Intent
Strategic Objectives & Inputs
Chapter 1: Strategic
ManagementStrategic
Competitiveness
Chapter 1: Strategic
ManagementStrategic
CompetitivenessStrategic Vision & Intent / Mission
Chapter 1: Strategic
ManagementStrategic
CompetitivenessStrategic Vision & Intent / Mission