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Strategic Management of
Organization and ICT (SMOI)
Lecture 1
February 7, 2018
Drs. N.A. Brand MMC
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The SMOI team
Lecturers
Nico Brand
Han Hoogeveen
Other DEBB members
Kalliopi Zervanou
Raoul Schipper
Christiaan Snoek
Rob de Wit
Kubilay Cakir
Website: www.cs.uu.nl/docs/vakken/b3smi
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Learning objectives for the course
Acquire knowledge about the main models, theories and insights in Strategic Management and specifically the IS/IT Strategy Planning process
Apply acquired models, theories and insights in a case study setting and a business simulation setting
Practice team collaboration skills, presentation skills and business report writing skills
Managerial and practical insights in running a company from the perspective of different executive roles
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SMOI setup 2017-2018
Part I: Theory (first 3 weeks)
John Ward and Joe Peppard: “Strategic Planning for Information Systems”, 4th Edition, ISBN: ISBN 978-0470034675
Multiple choice exam (re-exam in few days!)
Part II: Business game (remaining weeks)
Business game: running an international beer brewery and compete with other teams by developing a good strategy and doing smart investments (see next slide)
Grade:
30% Multiple choice exam (Part I)
10% Job application form
60% Business game (Part II)
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SMOI Business Game
Management Team:
CEO
CFO
CMS
CLO
CIO
5 rounds: Q0 (exercise), Q1, Q2, Q3, Q4
Teamwork, Presentations, Reporting, …
Fun and Creativity!
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Course overview (see website)
Week Wednesday Friday
6 Lecture (2 hours) Lecture (2 hours)
7 Lecture (2 hours) Tutorial/workshop (2 hours, 2 consecutive timeslots)
8 Tutorial/workshop (2 hours, 2 consecutive timeslots)
Midterm exam (re-exam: 27 feb)
9 Kick off lecture Business Game
Q0 Business Game
10 Feedback lecture Q0 Q1 Business Game
11 Feedback lecture Q1 Q2 Business Game
12 Feedback lecture Q2 Q3 Business Game
13 Feedback lecture Q3
14 Warstories presentations Q4 Business Game
15 Feedback lecture Q4 Year-end presentations
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Deadlines (see website)
Date Deliverable
Sunday, February 18; 23:59 Job application for Business Game
Friday, February 23 Mid-term Exam
Tuesday, February 27 Mid-term Re-Exam
Friday, March 2 Game assignments Q0
Friday, March 9 Game assignments Q1
Friday, March 16 Game assignments Q2
Friday, March 23 Game assignments Q3
Tuesday, March 27; 23:59 h Requests for Beertelligence
Wednesday, March 28 Warstories presentation
Friday, April 6 Game assignments Q4
Friday, April 13 Final presentation Business Game
Sunday, April 22; 23:59 h Year-end report Business Game
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Lectures and book
John Ward & Joe Peppard: "The Strategic Management of Information Systems: Building a Digital Strategy 4th Edition, ISBN 978-0470034675
Lecture 1 (Feb 7): Business Strategy – Mostly Chapter 2
Lecture 2 (Feb 9): IT Overview & Strategy – Mostly Chapter 1 & 3
Lecture 3 (Feb 14): (IT) organization, Investments, Innovation – More to be found in Chapter 4, 5, 8 & 10
Some theories and models are also used and elaborated in other chapters. So feel free to read more if you’re interested.
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SMOI
Any questions so far?
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Strategic Management
And the impact/need on/for IT!
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Strategic decisions
VS.
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Strategic decisions
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Strategic decisions
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Strategic decisions
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Strategic decisions
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But why?
But why would you call the previous examples strategic decisions?
In other words why would you call it strategic?
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Strategy
“an integrated set of actions aimed at increasing the long-term well-being and strength of the enterprise relative to its competitors” (Porter, 1985 in Ward & Peppard, p. 69)
Typical decisions include: (1) choice of industry, (2) firm configuration, (3) resource investments, (4) pricing tactics and (5) scope decisions
Requires: Strategic planning, Strategic thinking, Opportunistic decision making
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Evolution of Strategic Management
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Lets start a business
Why do we start a business? (Raison d’être)
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Mission
Mission: Unambiguous statement of what the organization does and its long-term, overall purpose.
Set direction and must be inspirational
Often contain values the organization stands for
“Who we are and what we do”
‘Companies whose employees understand the mission and
goals enjoy 29% greater return than other firms’, (Watson
Wyatt Work Study).
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Example Mission Statement
"Give people the power to build community and bring the world closer together."
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Example Mission Statement
Working to contribute to a better world. Our graduates have the knowledge and skills to make a substantial contribution to society. Our research is ground-breaking and focused on solving major global issues. Our collaborative culture fosters innovation, new insights and societal impact. The core values of ambition, inspiration, commitment and independence form the basis of our community.
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Example Mission Statement
“Our mission is to be our customers’ favorite place and way to eat & drink. We’re dedicated to being a great place for our people to work; to being a strong, positive presence in your community; and to delivering the quality, service, cleanliness and value our customers have come to expect from the Golden Arches – a symbol that’s trusted around the world.”
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Example Mission Statement
“offer reasonably priced quality food, served quickly, in attractive, clean surroundings.”
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Example Mission Statement
“We help and inspire people to make a home of their house”
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Example Mission Statement
“We believe all sustainable progress is driven by people with the imagination and determination to improve their future and the futures of those around them. We empower people and organisations to realise their own vision for a better future – however modest or grand. Our purpose therefore is: Empowering people to stay a step ahead in life and in business.
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Example Mission Statement
None
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Vision
Vision: What the business will be in the future and how it will operate.
Give the whole organization a destination
Should bring the strategy alive, shared picture of future aim
“Where are we going”
‘”I have a dream”, Martin Luther King Jr. said, and what
followed was a vision that changed a nation’.
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Example Vision Statement
“to provide access to the world’s information in one click.”
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Example Vision Statement
“Our overall vision is to become a modern, progressive burger company delivering a contemporary customer experience. Modern is about getting the brand to where we need to be today and progressive is about doing what it takes to be that our customers will expect tomorrow. To realize this commitment, we are focused on delivering great tasting, high-quality food to our customers and providing a world-class experience that makes them feel welcome and valued.”
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Example Vision Statement
“to be the most profitable QSR business, through a strong franchise system and great people, serving the best burgers in the world.”
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Example Vision Statement
”We’re all ‘creating the new’ – because we believe that through sport, we have the power to change lives”
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Example Vision Statement
”Playing people are happy people”
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Big Hairy Audacious Goal (BHAG)
A BHAG engages people. It reaches out and grabs them in the gut.
Focus on results vs activity.
It is tangible, energizing and highly focused.
People ‘get it’ right away: it takes little or no explanation.
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Big Hairy Audacious Goal (BHAG)
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Big Hairy Audacious Goal (BHAG)
JFK/NASA: Put a man on the moon and return him savely to earth (1960s)
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Big Hairy Audacious Goal (BHAG)
Bill Gates: “a computer on every desk and in every home”
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Big Hairy Audacious Goal (BHAG)
Nike: Crush Adidas (1960s)
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Other Elements of a Business Strategy
Mission
Vision
Business objectives
Values
Critical Success Factors (CSF)
Business Area Strategies & Plans
……..
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Objectives
Goals that are set for achieving the vision
Objectives at several levels, cascaded from corporate to business unit to business functions
Example of higher level objectives by Heineken:
Grow the Heineken brand
Top 3 in every market
Capture opportunities in emerging markets
Drive personal leadership
Objectives should be made SMART
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Communication, Communication, Communication
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An other Example
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Now what?
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Business model canvas(BMC) (Osterwalder)
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Business Model Canvas Often used in workshops
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Business model canvas(BMC) (Osterwalder)
Sports car
Collectors
Rally
Racers
Car fans Own
premium
dealers
Private events
Excl members
TV Channel
Excl rallies
Suppliers
Design studio
High Tech
partners
Production
Branding
Hospitality
Factory empl
CRM specialists
Hospitality crew
Selling cars
Memberships Factory, employees, R&D,
events
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Business model canvas(BMC) (Osterwalder)
Normal car?
Suppliers
Production
Factory empl
Selling cars
Spare parts Factory, employees
Middle class
Car
Retailers
TV marketing
Brochures
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Business Model Canvas Other example
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Business Model Canvas Make it visual!
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Business Model Canvas Spin offs
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Business Model You
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Strategic Models
Source: Alice in Wonderland
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Famous models for strategic analysis
PEST(EL) Analysis
Environmental analysis
Porter’s - Five Forces
industry analysis
Christensen – SWOT
Company/environmental analysis
Porter’s – Competitive strategies
strategic positioning
Treacy & Wiersma’s - Value disciplines model
strategic positioning
BCG matrix
Company/product analysis
De Ruijter - Scenario thinking
Strategic options
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Evolution of Strategic Management
Ansoff
Porter
SWOT
Portfolio
Treacy & Wiersema
Hamel & Prahalad
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PEST(EL) Analysis
Political
Economical
Social
Technological
Ecological
Legal
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PEST(EL) Analysis
Political: stability production countries of coffee beans;
Economical: price of coffee beans; price pressure of ‘coffee to go’
Social: people like drinking coffee together
Technological: coffee home machines become better and cheaper
Ecological: sustainable bean production, sustainable coffee cups
Legal: opening hours
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Low entry, Branding
important, Technology
Low switching costs,
Customer loyalty, Buyer
has not much power
Tea, Juices, Soft
drinks, Smoothies
Low bargaining
power, World
wide production
Coffee bike; McDonalds;..
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Design School
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Porters’ Generic Strategies
Competitive advantage
Strategic goal
Low price Perceived added
value
Complete
industry
Cost leadership Differentiation
Specific
segments
Focused cost
leadership
Focused
differentiation
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Porters’ Generic Strategies
Competitive advantage
Strategic goal Low price Perceived added
value
Complete
industry
Cost leadership Differentiation
Specific
segments
Focused cost
leadership
Focused
differentiation
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Positioning School
Product Leadership: Have the most advanced products. Continuous product innovation to meet customer needs. Initiate change to which competitors must respond.
Customer Intimacy: Targeting markets for tailored customer solutions. Not only fulling their needs, but anticipate! Be ready to change in quick changing markets.
https://www.youtube.com/watch?v=2KpLHdAURGo
Operational Excellence: Narrow product lines. Focus on cost, reliability, efficiency and volume. Moderate change in systems and structure.
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Positioning School
Choose the one to be the best
Be “at Par” with the other disciplines
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Positioning School
Current state Future state
This can change over time
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Positioning School
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BCG Matrix
Product life cycle
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BCG Matrix
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Example
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Portfolio Analysis
BCG - Matrix Higgins - Matrix
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Core Competencies – Hamel & Prahalad
Core competencies:
“the company’s collective knowledge about how to coordinate diverse production skills and technologies”
“Depart from your core competencies ... translate them into ‘strategic intent’ ... and shape the future of your business”
What are the core competencies of:
Apple ?
Google ?
Heineken ?
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Strategic Models
Any questions so far?
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Strategy Blue Prints
Events
Capabilities
Learn & Leverage
Read & React
Plug & Play
Adaptive
Enterprise
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Lean Start Up
Minimal Viable Product
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Lean Start Up
https://www.youtube.com/watch?v=PDoZeFzIbRk
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Questions
? Next Lecture Friday 9.00 - 10.45
