Case 4
716
Course structure
Business
models
Identifying
Problem
Analysing
customers
Analysing
context
Analysing
distribution
Analysing
resources
Strategy
develop
-
ment
Strategy
evaluation
Implement
-
ation
Today
Learning objectives
1.
Importance of problem statement
2.
Clarify that need to consider multiple strategic
alternatives
3.
Detail a sequence for strategy development and
evaluation
4.
Outline some common strategic errors
3
Agenda
•
How to identify a strategic problem
•
Multiple alternatives
•
Strategy development sequence
•
Strategy errors of logic
An overview of the strategy process
Environment
-
Problem
–
Strategy
-
Implementation
What is common in these companies?
Problem identification is ‘must’ for strategy
Strategies that would not solve this problem:
•
Have a cup of coffee
•
Take a picture
•
…….
Problems are not always visible
8
“Well
-
defined problems lead to
breakthrough solutions.”
Centrality of the ‘problem’
The problem identification
–
a pivoting opportunity
Problem
–
Strategy Development: A sequence
Strategy
formulation
Strategy
evaluation
Strategy
implementation
Performance
evaluation
Problem
definition
Choice
A
B
C
Strategy as a solution to a problem
•
“Problem” may simply be a limitation or blockage
to taking advantage of an opportunity
Strategy is
more than a
set of tools,
methods and
plans
One problem
–
alternative solutions
Problem effect
Problem 1
Solution 1
Problem 2
Solution 2
Problem 3
Solution 3
Problem 4
Solution 4
•
Does not work for an SME
•
Does not have enough
resources to
simultaneously solve so
many problems
•
No creativity in alternatives
Problem 1
Alternative 1
Alternative 2
Alternative 3
•
Address the problem that
causes most problem
•
Creative alternatives to
address problem rather
than most obvious
Creating strategy alternatives
•
You need to evaluate multiple alternative strategies
before deciding on the best approach
•
always more than one solution to a strategy problem
•
different logics and perspectives; critical thinking
Porter’s ‘Generic’ Competitive Strategies
Growth strategies: Ansoff matrix
Standard strategy 1: Growth
Growth – to increase market share or more markets or more products or gain economies of scale or all of them.
Types are:
· Concentration: Three segments of Ansoff matrix – market exploitation, product development, market development.
· Integration: horizonal or vertical (in industry value chain)
· Diversification: (i) Concentric (related) or (b) Conglomerate (unrelated)
Standard strategy 2: Stability
•
Maintain
current operations, market size and
position
•
many small businesses are comfortable with this
risk
-
averse strategy
•
Types are:
•
No change strategies
•
Pause & proceed with caution
•
Profit
strategies
Standard strategy 3: Retrenchment
•
Challenging times
and need to cut costs,
streamline operations, reduce in size or close
business
•
Types
are:
•
Turnaround
•
Divestment
•
Bankruptcy
•
Liquidation
Digital
marketing strategy
•
Growth & development
of
a brand
in the
digital
universe
–
by
using online marketing channels
•
More
than devise used (mobile or desktop) or to
the brand’s property (website)
•
Covers every
social platform, app, web directory (or
other) that represents a point of
contact
•
Uses
POEM (Paid Owned Earned Media)
POEM: Paid
-
Owned
-
Earned Media
Digital
strategy
–
many options
Importance
of
strategy evaluation
Summary: Sequence
Strategy
formulation
Strategy
evaluation
Strategy
implementation
Performance
evaluation
Problem
definition
Choice
A
B
C
What is the reasons for their failure?
1) Helps in addressing a problem or a challenge
2) Helps in taping into or taking advantage of an opportunity
A strategy
can do:
one or two
or both
3) both