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STRATEGIES TO ACHIEVE STRATEGIES TO ACHIEVE SUPERIOR PERFORMANCESUPERIOR PERFORMANCE
MOHD TUSIRIN NORMOHD TUSIRIN NORUKM GRADUATE SCHOOL OF BUSINESSUKM GRADUATE SCHOOL OF BUSINESS
NATIONAL WORKSHOP: EMPOWERING NATIONAL WORKSHOP: EMPOWERING TELECENTERS IN BRIDGING THE DIGITAL DIVIDETELECENTERS IN BRIDGING THE DIGITAL DIVIDE
SEREMBAN, 8SEREMBAN, 8--9 FEBRUARY 20119 FEBRUARY 2011
STRATEGIES TO ACHIEVE STRATEGIES TO ACHIEVE SUPERIOR PERFORMANCESUPERIOR PERFORMANCE
1.1. Brief Strategic Management Brief Strategic Management FundamentalsFundamentals
2.2. Strategic Management in Practice @ Strategic Management in Practice @ Golden HopeGolden Hope
3.3. Blue Ocean StrategyBlue Ocean Strategy4.4. ConclusionConclusion
PRESENTATION OUTLINEPRESENTATION OUTLINE
Strategic Management Process
External Environment
Internal Organization
Competitive Dynamics
Business Level Strategy
VisionMission
Corporate Governance
Org Structure and Controls
Acquisition & Restructuring
Strategies
International Strategy
Cooperative Strategy
Strategic Leadership
Strategic Entrepreneurship
Corporate Level Strategy
Strategic Competitiveness
Strategy Formulation Strategy Implementation
inpu
tac
tions
outc
omes
feedback
Above average returns
STRATEGYIntegrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage and earn above average returns
Ireland, Hoskisson, Hitt (20110The management of Strategy
RESOURCES CAPABILITIES
CORE COMPETENCIES
COMPETITIVE ADVANTAGE
ABOVE AVERAGE RETURN
SUSTAINABLE Competitive Advantage
Valuable, Rare, Costly to imitate, Non-substitutable
INDUSTRY ENVIRONMENT
PORTER’S 5 FORCES; ENTRANT, SUBSTITUTE, BUYER, SUPPLYER, RIVALRY
COMPETITOR ENVIRONMENTObjectivesStrategiesAssumptionsCore competencies
SOCIOCULTURAL
POLITICAL/LEGAL
VISIONMISSION
OBJECTIVESGOALS
KRAKPI
STRATEGIC MANAGEMENT MAP
INTERNAL ENVIRONMENT
EXTERNAL ENVIRONMENT
STRENGTHSWEAKNESSES
OPORTUNITIESTHREATS
STRATEGIES
PHYSICAL
Market commonalityResource similarityAttack & Response1st Mover
STRATEGY FORMULATION
BUSINESS LEVEL CORPORATE LEVEL
COOPERATIVE
MERGERACQUISITIONTAKE-OVER
STRATEGIC ALLIANCE
EQUITY -JVNON EQUITY -CONTRACT
NETWORKING
WHOLLY OWN
LOCAL REGIONAL INTERNATIONAL GLOBALWHERE
HOW
WHAT
COLLUSIVE ALLIANCE
Actions to gain a competitive advantage in specific product markets
Gain a competitive advantage by selecting and managing a group of different businesses
Firm sells its goods or services outside the domestic market
Firms work together to achieve shared objectives
To form subsidiary or associate companies
Com
petitive S
cope
Competitive Advantage
5 components1. Effective customer relationship
management (CRM)2. Customer Reach (connected),
Richness (depth), Affiliation (intimacy and usefulness)
3. Who will be served (market segment)
4. What needs to satisfy (product’s benefits and features)
5. How needs is satisfied (Core competencies: resources and capabilities)
Integrated & Coordinated commitments and actions to gain a competitive advantage in specific product markets
BUSINESS LEVEL STRATEGY
REASONS FOR DIVERSIFICATIONValue-creating
• Operational relatedness• Corporate relatedness• Economy of scope• Market power• Increase revenue/reduce cost
Value-neutral• Antitrust and Tax Laws• Diversify to increase performance• Uncertain Future Cash Flows;
defensive strategy• Synergy and Firm Risk Reduction
Value-reducing • Top management compensation
& risks• Benefits to top management, not
shareholder
Related Constrained
Related Linked
Operation & Corporate
Relatedness
Unrelated O
pera
tiona
l rel
ated
ness
Corporate relatedness –core competency
To gain a competitive advantage by selecting and managing a group of different businesses
CORPORATE LEVEL STRATEGYLEVEL OF DIVERSIFFICATIONLow :Single biz; income >95% from one bizDominant biz; 70-95% income from one bizModerate; income <70% from dominant bizRelated Constrained – more operation relatedRelated Linked – more corporate relatedHigh; income <70% from dominant bizUnrelated related diversification
Vertical – along supply chainHorizontal – across supply chainDiagonal
STRATEGY IMPLEMENTATION
STRUCTURE AND CONTROL OF
ORGANIZATION
CORPORATE GOVERNANCE
STRATEGIC LEADERSHIP
STRATEGIC ENTREPRENEURSHIP
Organization’s professional and ethical values thru Agency Relationship: Separate Owner, Board and Management
Exploit opportunities; commercialize innovations
Framework to implement; monitor and control strategies
Envision and empower to create strategic change
Strategy on Human Resource
9
A. BackgroundB. Corporate Vision and StrategiesC. Group Organization StructureD. Key Performance IndicatorsE. Strategic Directions
STRATEGIC MANAGEMENT IN PRACTICE @ Golden Hope (2004)
A. BACKGROUNDChallenges & Opportunities in Palm Oil Industry
Challenges Limited Land for Expansion Rising Production Costs Stagnating Yields Growing Influence of NGOs /
Consumers In Relation To The Environment, Food Safety And Sustainability
Human Capital
Opportunities Higher Import Level by China,
India & EU Reputable Global Producer and
Exporter Further venture into downstream
Oil Palm An Environmental
Friendly Crop
Growing Concern Over GMO &
Trans-Fatty Acid
THE MAJORTHE MAJOR PLAYERS ARE MOVING DOWNSTREAM (2004)PLAYERS ARE MOVING DOWNSTREAM (2004)
* Figures for 2003 *** Figures for FY2003/2004** Figures for 2004 # Malaysian palm and palm-based products export value 2003
REFINING, BULK, COMMODITY, SPECIALTY
PRODUCTSCONSUMERPLANTATION
CARGILL **
KARSHAMNS *
MILLING/CRUSHING
Source: Annual reports
UNILEVER *
MALAYSIAN PALM OIL INDUSTRY
ARCHER DANIEL MIDLANDS **
AARHUS GROUP *
-UPSTREAM MIDSTREAM DOWNSTREAM
GOLDEN HOPE ***
IOI GROUP ***
KLK *
FELDA
239,000 4,860
137,000 5,930
198,500 21,100
2,780 88
1,720 102
2,802 472
4,993 1,112
3,473 569
27,700 #
SALES PROFITRM million
B. CORPORATE VISION and STRATEGIES
CORPORATE VISIONCORPORATE VISION
CORPORATECORPORATESTRATEGIESSTRATEGIESCORPORATECORPORATESTRATEGIESSTRATEGIES
1. Multi-skilled workforce2. Developing and leveraging on technology,
knowledge and information3. Total commitment to strong corporate
governance and economic stability4. Dynamic and synergistic growth to enhance
shareholder value5. Expansion in the core businesses to
maximize growth in markets and profits6. Building global brand identity
““Global leader in sustainable plantations, commodities & oils & fats businesses”
13
Group OperationsGroup Operations
Group Chief ExecutiveGroup Chief Executive
Plantations
Group Support ServiceGroup Support Service
Oils & Fats/Oleo-Chemicals
Oils & Fats/Oleo-Chemicals
OtherBusinesses
OtherBusinesses
Consultancy & Services
Consultancy & Services
Finance &
Accounts
Finance &
Accounts
Corp Legal &
Secretarial
Corp Legal &
SecretarialHRHR
Corp Strategy &
Business Dev
Corp Strategy &
Business DevSecuritySecuritySecuritySecurity
Public Affairs Public Affairs & &
CommunicationsCommunications
Public Affairs Public Affairs & &
CommunicationsCommunications
C. GROUP ORGANISATION STRUCTURE
14
Why Do We Need KPI ?1. To stay focus on key & pertinent issues
2. To drive us towards achieving our goal
D. KEY PERFORMANCE INDICATORS (KPI)
15
Corporate KPI for FY 2004/2005BALANCED
SCORECARD PERSPECTIVE
KPI TARGET (2004/2005)
Financial Group Profit Before Tax RM715 mil
Group Return on Capital Employed 9.92%
Customer Sales Non-Commodity Products 47%
Market Share of Oils & Fats Purchase of MNC 2.5%
Internal Business Process
Palm Oil Price vs MPOB Price 2% Above
Group Average Oil Yield Per Hectare 5.19 Tons
Learning and Growth Corporate Brand Strength (Survey) 75% Positive Responses
Extent of Leveraging ICT for Competitiveness 80%
D. KEY PERFORMANCE INDICATORS (KPI)
16
1. Strengthening present core operations
Sustainable plantation – People, Planet, Profit
Intensifying R&D
Fully integrated value chain
Technology advancement
E - STRATEGIC DIRECTION
2. Specialize and focus in oils and fats business value chain (includes oleo chemicals)
-UPSTREAM
PLANTATIONS
MILLINGREFINING
(Standard – Customized)
MIDSTREAM DOWNSTREAM
REFINING - Oleo Chemicals(Basic – Derivatives)
BRANDING & PACKAGING
CONSUMER
E - STRATEGIC DIRECTION
18
3. Branding and product development
E - STRATEGIC DIRECTION
19
4. Harness human capital & performance driven culture
FinancialFinancialCustomerCustomerBusiness ProcessBusiness ProcessLearningLearning & Growth& Growth
FinancialFinancialCustomerCustomerBusiness ProcessBusiness ProcessLearningLearning & Growth& Growth
PART E - STRATEGIC DIRECTION
20
5. Strengthening global presence
PART E - STRATEGIC DIRECTION
GOLDEN HOPE CONFERENCE 2004GOLDEN HOPE CONFERENCE 2004GOLDEN HOPE CONFERENCE 2004GOLDEN HOPE CONFERENCE 20049 – 11 DECEMBER 20049 – 11 DECEMBER 2004
MARRIOTT HOTEL, PUTRAJAYAMARRIOTT HOTEL, PUTRAJAYA
GOLDEN HOPE STRATEGIES FOR OILS & FATS AND OLEOCHEMICALS
By
Dr. Mohd. Tusirin NorSenior Director, Oils & Fats
PAPER 2
ASPIRATIONSASPIRATIONS“ TO BE THE LEADING GLOBAL SOLUTION PROVIDER IN FOOD AND
OLEOCHEMICAL APPLICATIONS THROUGH EXPERTISE & KNOW-HOW IN
REFINING AND MODIFICATION OF EDIBLE OILS ”
CONTINUOUS DIFFERENTIATION
EXTEND PRODUCT MIX INTO SPECIALTY PRODUCTS
INCREASE MARKET COVERAGE
BRANDINGHUMAN RESOURCES
“You innovate value for stakeholders”
Cirque du Soleil
Factors industry competes and invests
Offe
ring
leve
l buy
ers
rece
ive
6 path
Is there a compelling reason for people to buy?
(continued)
3E principle
Strategy Formulation Attitude Behavior Strategy Execution
BASIS RED OCEAN BLUE OCEAN OPEN UNIVERSE
Economy Scarcity Scarcity Abundance
Competition Rivalry; Competitive Advantage
Above competition; not relevant
Partnership; benchmark others
Results Average Above average Superior Performance
Innovation Technology; Products Service , process Relationship : Creator <> Created.
Technology Tool Tool Tool
Application Commercial Commercial Commercial & non-commercial
CONCLUSION: 0PEN UNIVERSE STRATEGY
ENDTerima kasih