Professional Documents
Culture Documents
Plans
TL Hill
thill@sbm.temple.edu
215-204-3079
Business plan workshops
• Plan
• Process • Strategic Management
• Position
• Pattern • Strategic Positioning
• Perspective
• Procedure • Strategic Navigation
• Play
• Ploy
• Strategic Tactics
Strategic management
Strategy
Implementa
tion
Two basic strategic options
• Position Strategy
– Unique, valuable, defensible position in a market or
industry
– Supported by a tightly integrated value chain /
activity system
– Good for relatively stable industries/markets
• Resource/Navigation Strategy
– Vision-driven nurturing and leveraging of core
resources
– Supported by tight culture and explicit learning
– Good for dynamic industries/markets
I. Strategic positioning
• A niche is typically the
market the firm is uniquely
External qualified to serve
Opportunities
& Threats
Niche
Internal
Strengths &
Weaknesses
Classic positional strategies
• Cost (price) leadership
• Differentiation
– Quality, design, support/service, image
– Always starts with the product
• Focus
– Broad or narrow
– Always starts with a specific market
segment
Examples of positional
strategies
• Cost (price) leadership
– Crown, Cork & Seal (pennies, plants). Wal-mart (warehousing,
negotiation). Motel 6 (location, services, salespeople). Cintas
(plants, logistics).
• Differentiation
– Mercedes (quality). Apple (design). Nordstrom (service).
Nike (image). G&K (clean rooms, radiation). Most
entrepreneurs (Zitner’s, Prompt.)
• Focus
– Wal-mart (broad - rural). Specialty bookshops (narrow -
Giovanni’s room, NSP). Some entrepreneurs (NRI - changing
mix & services).
Elaborations of positional
strategies
• Penetrate new markets
– Insurance in India. IMS.
• Develop new markets
– E-government. (Disruptive technologies.)
• Develop new products
– Gillette. Intel.
• Become indispensable
– Microsoft. Best subcontactors.
• Fortify
– Borders wholesalers, B&N’s leases.
TOWS analysis
Internal
Factors Strengths Weaknesses
(S) (W)
External
Factors
SO Strategies WO Strategies
Opportunities ------------------------- ------------------------
Use strengths to Offset weaknesses
(O) take advantage of to take advantage
opportunities of opportunities
ST Strategies WT Strategies
Threats -------------------------- -------------------------
(T) Use strengths to Min. weaknesses
avoid threats to avoid threats
TOWS analysis exercise
• Fit refers to the niche a firm serves and the way its
products or services are positioned
• But fit also has to do with every other part of the
internal structure of the firm.
• A well positioned firm crafts itself to serve a niche
better than anyone else
• Starting a new firm offers the exciting, seductive,
often advantageous opportunity to craft a perfect fit
between specific opportunities and internal capabilities.
Value chain
Infrastructure
Procurement
Trade pb
Prepay
Direct mail Editoria Galleys - Library
vs
Distributor l review & rate
Returns
hc UPS
Green
tax
Cooperative: multiple skills, networks, low-cost, apprenticeship Small
but
stead
Desk-top, enterprise, email y
Limited Self-
service Most
Customer Limited
Easy Selection items in
Service sales staff stock
transport
Self On-site
-assembly inventory
Customer
Flat Modular loyalty Year-
Low Mfg
packing Designs round
kits Cost stocking
Wide Long-term
Design
variety Easy to suppliers
focused on
make
low cost
Experience curve
• Strategy
• Stakeholders
• Wealth
• Model
• Structural implications
• Revise model
IV. Functional implications of
the business model
Ownership Family/Stakeholder
Pressures Pressures
Managerial
Pressures
Business systems dynamics
• Direction
– Vision, values, culture
– Formal visioning
– Cultural maintenance
• Agreements
– Contracts, bylaws
• Support
– Facilitators, advisors, models
Sharing the vision
Impact Intervention
Intervention C
Y
Intervention Intervention
X A
L H
Probability of
Success
Value driver analysis
• Focus
– No low hanging fruit, no wild gambles
• Process
– Generates commitment
– Builds trust
• Brings data and analysis
– To what is for most entrepreneurs, intuitive
• Models a useful tool
Legal structures
• Boards of advisors
– Next size up, pay
• Professional team
– Accountant, lawyer, coach, tie-breaker,
insurance?
Governance section
• Systems
– Efficient, effective processes
– Fit between systems
• Relationships
• Staff development
Responsibility charting
DECISION:
Roles Involved
CEO Oper. Sales Fin.
Types of Participation
Approve
Responsible
Consult
Informed
Responsibility chart details
• Approve
– Sign off on decisions
– Veto power
– Final responsibility to commit resources
– Shares accountability
• Responsible
– Takes the initiative, develops alternatives,
recommends, implements.
– Accountable for results
Responsibility chart details
• Consult
– Input but no veto power
• Inform
– Notify
Management team section
• What you do
• How you do it
• Cost implications
Operations Examples
• Arbill
– computerized information, pay incentives,
training, culture, evidence
• Anderson
– architected solution simplifies training and
control and resource management
– ties in with knowledge management
Operations section
• Verna Allee, “Reconfiguring the Value Network,” The Journal of Business Strategy, 21 (4),
PP 36-39.
• R Boulton, B Libert, S Samek, “A Business Model for the New Economy,” The Journal of
Business Strategy, 21 (4), July-August 2000, pp 29-35.
• James Collins & Jerry Porras, Built to Last (HarperBusiness, 1994).
• Richard D’Aveni, Hypercompetition (Free Press: 1994).
• Kathleen Eisenhardt & Donald Sull, “Strategy as Simple Rules,” Harvard Business Review,
January 2001.
• Mark Feldman & Michael Spratt, PWC, Five Frogs on a Log: A CEO’s Guide to Accelerating
the Transition in Mergers, Acquisitions and Gut Wrenching Change, (HarperBusiness
1999).
• Pankaj Ghemawat, Strategy and the Business Landscape (Prentice Hall, 2001).
• G. Hamel & C. K. Prahalad, “Strategic Intent,” Harvard Business Review, May-June 1989.
• Robert Hamilton lecture notes, 1998.
• Robert Hamilton, E. Eskin, M. Michael, "Assessing Competitors: The Gap between
Strategic Intent and Core Capability", International Journal of Strategic Management-
Long Range Planning, Vol. 31, No. 3, pp. 406-417, 1998
Bibliography, cont.