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MGMT 4002: Strategy Implementation

Course Overview

Bachelor of Management Program

Faculty of Management

Winter 2019

Dr. Ramon Baltazar

AGENDA

• Learning outcomes

• Course content

• Course process and requirements

LEARNING OUTCOMES

• Knowledge – Concepts, tools, and frameworks for strategy implementation

– Strategy and organization design, culture, leadership, and large-scale change

• Skills – Analytical and strategic decision-making

– Oral (meeting and presentation) and written

– Technical, interpersonal, and conceptual

• Mentality – Managing ambiguity

– Problem finding and solving

– Using judgement rather than following instructions

https://d.docs.live.net/5538590b1e9dd336/4002 19W/Slides/SKILL REQUIREMENTS BY MANAGEMENT LEVEL.pptx

STRATEGIC MANAGEMENT

ORGANIZATION

PERFORMANCE

ORGANIZATION

STRATEGY

ORGANIZATION

CULTURE

ORGANISATIONAL

CHANGE & LEADERSHIP

PERFORMANCE INDICATORS

• Financial measures – Returns, growth, value, liquidity, activity

– https://www.youtube.com/watch?v=q8NZfbcNMrM&index=12&list=PLrgoJWiQ8jv3i8Ethny8MJ0f5D nXUIpvZ

• External measures – Customer satisfaction, market share

• Internal measures – Efficiency, Employee satisfaction/engagement

• Leading versus lagging indicators

https://www.youtube.com/watch?v=q8NZfbcNMrM&index=12&list=PLrgoJWiQ8jv3i8Ethny8MJ0f5DnXUIpvZ

STRATEGIC MANAGEMENT

ORGANIZATION

PERFORMANCE

ORGANIZATION

STRATEGY

ORGANIZATION

CULTURE

ORGANISATIONAL

CHANGE & LEADERSHIP

STRATEGY AND

ITS COMPONENTS

(Mintzberg, Collis &

Rukstad, Others)

STRATEGY

COMPETITIVE

EMPHASIS

PRODUCT

MARKET SCOPE

GOALS

• Strategy – Pattern in a stream

of organizational decisions and

actions; May also be thought of

as position, plan, ploy,

perspective

• Constitutes 3 components

shown left

STRATEGIC MANAGEMENT

ORGANIZATION

PERFORMANCE

ORGANIZATION

STRATEGY

ORGANIZATION

CULTURE

ORGANISATIONAL

CHANGE & LEADERSHIP

ORGANIZATION

CULTURE

(Lorsche &

McTague, Various

other authors)

CONTROL

SYSTEMS

ORGANIZATION

STRUCTURE

PEOPLE

SYSTEMS CULTURE

• Shared beliefs and assumptions

about external adaptation and internal

integration

• An outcome of 3 variables shown

right (Lorsche & McTague, 2016)

STRATEGIC MANAGEMENT

ORGANIZATION

PERFORMANCE

ORGANIZATION

STRATEGY

ORGANIZATION

CULTURE

ORGANISATIONAL

CHANGE & LEADERSHIP

CHANGE AND LEADERSHIP

Present

organization

content

Desired

organization

contentChange

process

D riv

in g

F o

rc e s

R e

s tra

in in

g F

o rc

e s

REQUIRED MATERIAL

• Dess, G., Eisner, A., McNamara, G., Peridis, T. and Weitzner, D. (2018). Strategic management: Creating competitive advantage (4th Canadian edition). McGraw-Hill Ryerson.

• Case pack available for purchase at https://hbsp.harvard.edu/import/596366

• Posted cases

• Readings listed on the course outline, available at Dalhousie Libraries

https://hbsp.harvard.edu/import/596366

COURSE METHODS

• Lecture discussions

• Case discussions

• Individual case assignments

• Strategy implementation project

• Final exam

LECTURE DISCUSSION EXPECTATIONS

• Read assigned material prior to class

• Attend all sessions

• Demonstrate prior preparation via

– Statements of fact, Analysis of facts, Sound conclusions and decisions, Insights

• Be attentive and fully engaged

MANAGEMENT CASE

• A story that is written for a specific pedagogical objective, about – A real organization

– A management situation

– A decision situation

– Contentious issues

• Management cases are not the same as: – Cases in law, clinical psychology, and exercises

WHY USE CASES?

• Gragg: Because wisdom can’t be told

– Learning comes from

• Working on real problems often with others

• Practice and repetition

DIFFERENT OBJECTIVES

• Case and lecture methods address different course objectives

– provide information

– provide tools and techniques

– develop concepts

– develop analytical and decision skills

– develop attitude

CASE METHOD STAGES AND

EXPECTATIONS

• Individual preparation

– Put the time in

• Small group consultation (optional)

– Balance discussion and advocacy with dialogue and

inquiry

• Large group discussion and/or presentations

– Participate, contribute, listen, go with the flow

https://d.docs.live.net/5538590b1e9dd336/4002 18W/Slides/Individual preparation.pptx

https://d.docs.live.net/5538590b1e9dd336/4002 18W/Slides/Small group consultation.pptx

https://d.docs.live.net/5538590b1e9dd336/4002 18W/Slides/Large group discussion.pptx

INDIVIDUAL CASE ASSIGNMENTS

• Address 4 questions – What is the decision to be made?

– What are the relevant situational factors?

– What are the options and their pros and cons?

– What is your recommendation and how should it be implemented?

• External research unnecessary – refer only to assigned course material to date

• 2,500 words of text, not including optional exhibits – Exhibits must be student-analyzed work rather than mere copies of work by others

• See course outline for details

STRATEGY IMPLEMENTATION

PROJECT (SIP)

• Self-select into teams of 5

• Pick and clear an organization for study

• Analyze (describe and assess) organization based on course material and verifiable data, identify issue(s), make recommendations

• Final report: 20 single-spaced pages of text excluding appendices

• Team presentation: 20-25 minutes plus Q & A period

• Peer evaluation

• See course outline for details

FINAL EXAMINATION

• 3 hours on or prior on last or next to last class date

• Exam case provided 24 hours earlier

• Closed book exam: Fresh copy of case and exam

booklets provided, standard calculator permitted

EVALUATION

• Class attendance (5%) and performance (15%) 20%

• Individual case assignments (15% each) 30%

• Strategy Implementation Project

– Report (22%) and Presentation (8%) 30%

• Final examination 20%

MGMT 4002: Strategy Implementation

Strategy Formulation (Review)

Bachelor of Management Program

Faculty of Management

Winter 2018

Dr. Ramon Baltazar

AGENDA –

STRATEGY FORMULATION VARIABLES

MISSION

INTERNAL ANALYSIS

EXTERNAL ANALYSIS

VISION CORE VALUES STRATEGY

SCOPE OF EXTERNAL ANALYSIS

INDUSTRY (OR STRATEGIC

GROUP) ENVIRONMENT

MACRO

ENVIRONMENT

COMPANY

ENVIRONMENT

FACTORS IN THE MACRO ENVIRONMENT

• Demographic

• Sociocultural

• Political and legal

• Technological

• Economic

• Global

E.g. Brazil

file:///C:/Users/rbalt/Documents/VTS_01_1 Brazil.VOB

FIVE FORCES ANALYSIS

• Identify the industry and

players within each force

• Determine the nature and

influence exerted by each

force on the industry

• Determine the level of

industry attractiveness

• Identify areas of opportunity

and risk within the industry

• Identify key success factors

for industry players

RIVALRY BUYER POWER

THREAT FROM

SUBSTITUTES

RISK OF

NEW ENTRY

SUPPLIER

POWER

• Porter’s thoughts - http://www.youtube.com/watch?v=mYF2_FB CvXw&feature=related

http://www.youtube.com/watch?v=mYF2_FBCvXw&feature=related

INTERNAL ANALYSIS

• Perform a value chain

analysis

• Identify organizational

strengths and

weaknesses

• Perform VRIO

analyses to identify

potential sources of

competitive advantage

and disadvantage

COMPETITIVE IMPLICATIONS OF VRIO RESULTS

Valuable Difficult to Rare Exploited Implications

(V) Imitate (I) (R) by Org (O) for Competitiveness

No No No No Competitive disadvantage

Yes No No No Competitive parity

Yes No Yes No Temporary competitive

advantage

Yes Yes Yes Yes Sustainable competitive

advantage

Is a resource or capability…

Exhibit 3.7 Criteria for Sustainable Competitive Advantage and Strategic Implications

Source; Adapted from J. Barney, “Firm Resources a Sustained Competitive Advantage, ‘ Journal of Management 17 (1991), pp. 99-120.

http://www.youtube.com/watch?v=BQjBrt9LriY

AGENDA –

STRATEGY FORMULATION VARIABLES

MISSION

INTERNAL ANALYSIS

EXTERNAL ANALYSIS

VISION CORE VALUES STRATEGY

MISSION (Abell)

• Why we exist

– Mandate

– Raison d’etre

– Broad product and market scope

• Business definition

– Who, what needs, how

• Costco – To continually provide our

members with quality goods and services at the lowest possible price.

Who is being satisfied?

What needs are being satisfied?

How are the needs being satisfied?

VISION (Hamel & Prahalad)

• What we want to be

– Aspirational

– May include any element

of the firm or society

– A BHAG (Hamel &

Prahalad)

• Alzheimer's Association – A world without Alzheimer’s

disease

CORE VALUES (Lencioni)

• Core behavioral principles

- Reflects deeply held beliefs

- Woven into everything

- Aggressively authentic

- Timeless, though practices can change

• Not same as aspirational values, permission to play values, accidental values

• May be, and often are, ethical in nature

– E.g. Integrity, diversity, inclusion, caring, sustainability

• Selected Apple values (Cook)

‒ We believe in the simple, not the complex.

‒ We believe that we need to own and control the primary technologies behind the products we

make.

‒ We participate only in markets where we can make a significant contribution.

‒ We don’t settle for anything less than excellence in every group in the company, and we have

the self-honesty to admit when we’re wrong and the courage to change.

Source: http://www.devdaily.com/blog/post/mac-os-x/apple-business-philosophy-mission-statement/

http://www.devdaily.com/blog/post/mac-os-x/apple-business-philosophy-mission-statement/

STRATEGY AND

ITS COMPONENTS

(Mintzberg, Collis &

Rukstad, Others)

STRATEGY

COMPETITIVE

EMPHASIS

PRODUCT

MARKET SCOPE

GOALS

• Strategy – Pattern in a stream

of organizational decisions and

actions; May also be thought of

as position, plan, ploy,

perspective

• Constitutes 3 components

shown left

GOALS (Various authors)

• Goals are performance criteria. They should

– Meaningful

– Explicit

– Verifiable (through the formulation of specific

objectives)

• Categories include

– Financial performance: E.g. Growth, returns,

liquidity, leverage, asset turnover

– External performance: E.g. Competitor or like-

organization comparisons, customer satisfaction,

social responsibility

– Internal performance: E.g. Employee engagement,

process effectiveness and efficiency

PRODUCT/SERVICE MARKET SCOPE

(Levitt, Abel, and others)

TARGET

MARKET (NEEDS)

PRODUCT (SERVICE)

REGION

Note breadth and

depth of offerings

compared to

competitors

GROWTH VECTORS (Ansoff)

Existing product or

service

New

product or service

Existing market

Penetration

Product

Development

New

market

Market

Development

Diversification

COMPETITIVE EMPHASIS (Porter)

Basic products

and services

Augmented products

and services

Cost leadership –

Efficiency focus

Differentiation –

Effectiveness focus

VALUE FRONTIER AND

BUILDING BLOCKS OF

ADVANTAGE

(Hill & Jones)

Differentiation

Cost leadership

Quality as reliability

Responsiveness to customers

Quality as excellence

Product innovation

Efficiency

Value Creation

Frontier (Hill &

Jones, 2013)Blue ocean value innovations https://www.youtube.com/watch?v=

x7qPAY9JqE4

https://www.youtube.com/watch?v=x7qPAY9JqE4

VALUE PROPOSITION MAP (Collis & Rukstad)

• Indicates what

customers value and

which value items the

firm promises to

address.

ACTIVITY SYSTEM MAP

Good strategies

reflect coherence in

key organizational

activities

E.g. Ryanair or

Southwest

file:///C:/Users/rbalt/Documents/VTS_01_1 Ryanair 1.VOB

COMPETITIVE ADVANTAGE-

(Based on Porter, Barney, and others)

60 45

55 70

unit cost unit margin• A firm has a competitive

advantage when it has a

sustainable low cost, best cost, or

differentiation position against the

average industry player.

• Outcome of a successful strategy

is superior performance measured

financially, externally, and/or

internally

COMPETITIVE ADVANTAGE

BY THE NUMBERS

• CAs should be demonstrable in financial results and projections

• Most commonly used measure of profitability results: Return on invested capital (ROIC) = Net profit/ Invested capital

• ROIC drivers (diagram)

WALMART AND TARGET IN 2012