Dr.

Bill Wales

Positioning an organization for competitive advantage It involves making choices about:

Which industries to participate in What products and services to offer How to allocate corporate resources

Its primary goal is to create value for shareholders and other stakeholders by providing customer value Strategy involves trade-offs

Sets Direction
Focuses Effort Provides Consistency

Defines The Organization

Prescriptive
Strategy as Design (internal/external fit) Strategy as Planning (scenario selection) Strategy as Positioning (industry positions)

Descriptive
Strategy Strategy Strategy Strategy Strategy Strategy as as as as as as Vision (future ideals) Cognition (pattern recognition) Learning (an emergent process) Power (a negotiation process) Culture (a collective process) Transformation (a change agent)

Mission statements Objectives

NY Times: To be Americas newspaper of record GE: To have the 1st or 2nd largest market share in every market in which it competes E.g., Information systems, training programs, etc Arrangements support, not drive strategy formulation E.g., Industry/Competitor/Market analysis, SWOT Analysis exists to inform strategy formulation

Internal Organizational Arrangements

Strategic Analysis

Putting Strategy in Its Place

Strategic Analysis
Industry Analysis Market Trends Customer Preferences Competitor Analysis SWOT Analysis

Supporting Organizational Arrangements Mission

Fundamental Purpose Values

Objectives
Specific
Targets

Strategy

Structure Process Symbols Rewards Activities Functional Policies & profiles

Arenas
How will we obtain our returns (make money)?
Which product categories? Which market segments? Which geographic areas? Which core technologies? Which value chain emphasis?

Where will we be active?

Economic Logic Staging

Speed of expansion? Sequence of initiatives?

What will be our speed and sequence of moves?

Lowest costs via scale advantages? Lowest costs via scope and replication advantages? Premium prices due to unmatchable services? Premium prices due to proprietary product features?

Vehicles
Internal Development? Joint Ventures? Licensing/Franchising? Acquisitions?

Differentiators
Image? Customization? Price? Styling? Product Reliability?

How will we get there?

How will we win?

The hedgehog concept

not doing many things well, but doing one thing better than anyone else in the world

The doom loop

Reactive decision-making Concentrating on too many diverse areas Following short-lived trends Frequent changes in leadership Loss of morale Disappointing results
Note: A note on the longevity of great companies link