Professional Documents
Culture Documents
It’s a pipe!
It’s a rope!
It’s a
spear!
It’s a tree!
Why do some organizations succeed
while others fail?
Strategy is a set of related actions that managers
take to increase their company’s performance.
v Strategic Leadership
• Task of most effectively managing a
company’s strategy-making process
v Strategy Formulation
• Task of determining and selecting strategies
v Strategy Implementation
• Task of putting strategies into action to improve a
company’s efficiency and effectiveness
Competitive Advantage
Results when a company’s strategies lead to
superior performance compared to competitors
Superior Performance and
Sustainable Competitive Advantage
v Superior Performance
• One company’s profitability relative to that of other companies in
the same or similar business or industry
• Maximizing shareholder value is the ultimate goal of profit making
companies
ROIC (Profitability) = Return On Invested Capital
• Net profit Net income after tax
ROIC = Capital invested = Equity + Debt to creditors
v Competitive Advantage
• When a company’s profitability is greater than the average of all
other companies in the same industry & competing for the same
customers
Sustainable Competitive Advantage
When a company’s strategies enable it to maintain
above average profitability for a number of years
Determinants of Shareholder Value
Safety Ethics
Customers
Society Shareholders
Vision
Company
goals and
performance
Regulators Employees
Strategic
Suppliers
Partners
Overall, vision is a powerful tool to manage
change, communicate and execute on
strategy
“Create seamless
“A personal “Empower people experiences that
computer on through great combine the
every desk and in software - power of the
every home, anytime, anyplace, internet with the
running Microsoft and on any magic of software
software.” device.” across a world of
devices.”
Describes the goal; serves Expresses long-term Appeals to long-term Lays out realistic yet
as a clear guideline for goals or aspirations for interests of internal, ambitious goals
strategic decisions the organization and its external stakeholders
stakeholders
8. Easy
5. Specific 6. Flexible 7. Unique to associate &
communicate
Clearly guides decisions; Allows firm to Provides a differentiated Every employee can
helps decide what firm proactively cope with identity & strategic relate to it
can and cannot do changes in the direction Is simple enough to be
environment communicated within 5
minutes
Is there a Strategic Time
Horizon?
The Strategy Time Horizon
Purpose & Values
(Timeless)
Vision
(10-20-30 years)
Strategic Position
(10 years)
Long term goals
(5-10 years)
Operating Plan (1
year)
Individual
Plans (Q’ly)
Now
Raise the bar!
Questions?