Strategy and Competitive Advantages Built by Stambaugh/2009 Failing to plan is planning to fail! Jeff Stambaugh [email protected]

Strategy and Competitive Advantages

Built by Stambaugh/2009 Failing to plan is planning to fail!

Jeff [email protected]

http://faculty.mwsu.edu/business/jeff.stambaugh

Strategy Intro

Built by Stambaugh/2009

■ What great companies first come to mind?■ What bad companies first come to mind?■ And now the key question … what made the great

great and the bad bad?

Failing to plan is planning to fail!

Strategy is …


■ Ongoing processes of:■ Analysis (Chapters 2-4)■ Decisions (Chapters 5-8)■ Actions (Chapters 9-12)

■ To achieve a sustainable competitive advantage (why some firms outperform others over time)

■ What is strategy to Porter?


Strategy Attributes


■ Directs organizations toward goals & objectives■ Multiple “masters” (Stakeholders)■ Short and long-term perspectives■ Tradeoffs between effectiveness and efficiency

■ Ambidexterity: take care of the present AND position your firm for the future


My Take on Strategic Process


Vision

Analysis

Formulation (Decision)

Implementation (Action)

Assess Performance


My Take on Strategic Process


Vision

Analysis

Implementation (Action)

Assess Performance

Formulation (Decision)


The Devil Wears Prada


■ Roll the film■ Analysis■ Formulation■ Implementation


Last spring, Starbucks fired its CEO (Jim Donald) and brought back the former CEO (Howard Schultz).

Starbuck’s stock price was down as the growth rate and earnings were down this year, something Donald blamed on the slowing economy and high coffee prices. Schultz

(who was still the Chairman of the Board) faulted Starbuck’s strategy and thus fired Donald. Starbucks’

stock price rose 8% upon news of Donald’s firing. According to the book this represents which view of

leadership

50%

50%1. Romantic view of leadership

2. External view of leadership

0 of 5

Strategy Can


■ Set firm direction■ Focus effort and provide coordination■ Define the organization■ Provide consistency■ Get you ready for unforeseen challenges


Stakeholder GroupsFIGURE 1.4

• Stakeholders: Individuals and groups with an interest in a firm’s performance and an ability to influence its actions

• Firms & stakeholders need each other (Symbiosis)• Dilemma—satisfying one stakeholder’s needs may come at expense of another• CSR and Triple Bottom Line (financial, social, and environmental)

• Fortune Link• Best Employers Link• Yahoo Finance

Copyright 2006: Thomson Business and Professional Publishing. All Rights Reserved. From Hitt, et al Understanding Business Strategy

Strategic Coherence


Hierarchy of Goals

Company visionCompany vision

Mission statementsMission statements

Strategic objectivesStrategic objectives


Do Vision / Mission Statements Really Matter?


■ How many of you know your company’s vision / mission statement?

■ Does that matter ?

■ What understanding the vision can do—the Men’s Wearhouse example

■ Vision / Mission statements can make a difference, especially in times of turmoil or as a compass!

■ Starbucks: Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow


Good “SMART” Objectives


■ S – Specific■ M – Measurable■ A – Appropriate■ R – Realistic■ T – Time-bound


Takeaways


Strategy is a dynamic process seeking a sustainable competitive advantage Strategy changes are inevitable

Analysis—Formulation—Implementation Stakeholders: who matters and how much do they

matter Value of a direction and how to set good goals


Next Class


■ Read Chapter 2 & Andy Grove Excerpt■ ST2 Due


Documents

Strategy and Competitive Advantages Built by Stambaugh/2009 Failing to plan is planning to fail! Jeff Stambaugh [email protected]