Sunday, January 31, 2010
Sharing in the Divine Life
Friday, January 29, 2010
Linking Strategy to Structure
- Can you change your company structure to better support your chosen strategy?
- Can you change your company structure in the longer term to open up more strategic options?
- As a last resort, can your strategy be changed or amended to better align it with your company structure?
Thursday, January 28, 2010
Balancing Interests
- Investors - They want to know that their money is safe in your hands
- Employees - They want their loyalty and productivity to be rewarded
- Customers - They will decide whether they want to be associated with you
- Suppliers - They need to know that their invoices will be paid
- Industry Associations - Set standards and best practices
- Community - They are a source of the staff and support you need
- Trade Unions - They require their members to be treated well
- Competitors - They act in ways that may affect your options and influence your decisions
- Government - The can provide mutual support that may be a source of power
- Pressure Groups - They may put their cause above your future
- Media - They have the power to influence many, for good and for bad
Wednesday, January 27, 2010
Involving Stakeholders
- Determine each stake-holder's level of interest in your activities.
- Assess their level of power over your organization.
- Identify who are the most powerful and the most interested stakeholders.
Tuesday, January 26, 2010
Painting Scenarios
Monday, January 25, 2010
Forecasting
Sunday, January 24, 2010
Divine Love
Friday, January 22, 2010
Reading the Future
Thursday, January 21, 2010
Remaining Objective
Wednesday, January 20, 2010
Assessing Feasibility
- Is sufficient funding available? You may be a small team that could deliver a great new service if you have a million dollars, but is it possible for you to access that funding?
- Do we have the time available?
- Do we have the skills in-house (or could we access them) to make this option happen?
- Does your organizational culture support the change? Your management may be highly risk averse, for example, and block radical plans.
Tuesday, January 19, 2010
Assessing Acceptability
- Will the financial return be acceptable?
- What are the risks of the option, and are they acceptable?
- How will this option affect each stakeholder group, and is this outcome acceptable?
- Will this option give the right balance of cost and benefits?
Monday, January 18, 2010
Assessing Suitability
- Will it get us to where we want to be in the future?
- Does it achieve the right balance between what we are good at and what the market wants?
- How will it impact on the organization?
Sunday, January 17, 2010
Christian Spirituality
Friday, January 15, 2010
Evaluating your Options II
- Gathering information - Analyze your resources and competencies. Look at the the business environment--growth, market structures, and broader economy.
- Develop Options - Identify possibilities for development--for example, can yo make profit from idle cash? Can you make better use of floor space?
- Assess the suitability of each option - Screen the options on the basis of whether they improve the competitive advantage of your organization.
- Assess acceptability - Ask if the option fits with your and your stakeholders expectations.
- Assess feasibility - Assess how possible it will be to put the strategy into action. What will be the barriers to implementation?
- Select the best fit strategy.
Thursday, January 14, 2010
Evaluating your Options
Wednesday, January 13, 2010
Putting it in Writing
- Describe what your organization does.
- Set out what the future world you will face looks like.
- Describe your sustainable competitive advantage.
- State why you will be in a strong position compared with your competitors.
- Define milestones of achievement, so you can monitor your progress.
Tuesday, January 12, 2010
Defining the Ingredients
Monday, January 11, 2010
Creating a Good Strategy
- What services or products will be required in the next three to five years?
- Who will your competitors be?
- Why will you be more successful than them?
Sunday, January 10, 2010
Desire For Interior Silence
Friday, January 8, 2010
Being a Specialist and Comparing the Three Strategies
focus strategy also carries more risk, because you are building up resources and competencies in only one narrow area.
Focus strategy involves an organization concentrating on one particular market or market niche and becoming expert in that area. Customers buy from that organization because they are the best in that field.
A focus strategy for an airline, for example, may be to fly only business-class passengers in private jets. There are many examples of focus strategy being used to great effect: German car manufacturer Porsche, for example, focuses only on sports cars and has a global reputation for doing so. However, focus strategy also carries more risk, because you are building up resources and competencies in only one narrow area.
Comparing the Three Strategies
Cost Leadership
Advantage - Can be easy to implement
Disadvantage - Can be difficult to sustain--you are vulnerable to being undercut by your competitors.
Differentiation
Advantage - Premium pricing can mean more money is available for activities that maintain the advantage, such as R&D
Disadvantage - The source of differentiation can become stale over time and new “extras” need to be developed.
Focus
Advantage - Can give very high profit margins and lead to a market-dominating position.
Disadvantage - Risky: Market niche may change or disappear; if you are successful, big firs may try to muscle in on your market.
ACTION POINT: Develop the strategy or combination of strategies that will maximize your position in the market.
Thursday, January 7, 2010
Focusing on Cost, Adding Benefits
The cost of providing the extras must be less than the price premium they are prepared to pay.
Cost-leadership strategy positions an organization as the lowest-cost producer in a particular industry. Everything about the firm is designed to be low cost--labor, premises, materials, capital, and so on.
The firms products or services are comparable in quality and price to the rest of the market: profit comes from the difference between the low costs and the market price. A subdivision of the cost-leadership strategy is the “no-frills” strategy, where low-cost production is still sought but the products or services are acknowledged to be of more basic quality.
Differentiation strategy is a near opposite approach to cost leadership. A firm employing this strategy adds additional features to its products or services to make them above average in the market.
For example, where a no-frills airline may offer little airport support (or make passengers pay extra for it), a differentiating airline may include a limo to the airport and a private lounge in the price of its tickets. Key factors for success with a differentiation strategy are that customers must desire the extra features and be willing to pay a price premium for them. The cost of providing the extras must be less than the price premium they are prepared to pay.
ACTION POINT: Identify the features and benefits that customers are willing to pay extra for.
Wednesday, January 6, 2010
Three Generic Strategies
Each requires a particular philosophical approach to be applied throughout the whole organization.
A business strategy is unique to the organization and environment in which it operates. However, research conducted by Professor Michael Porter recognizes three generic organizational strategies that businesses and use to gain and maintain competitive advantage within a market: cost leadership, differentiation, and focus. Each requires a particular philosophical approach to be applied throughout the whole organization.
You an choose to pursue one of the three strategies in its pure form or to devise a hybrid. If you do the latter, monitor the strategy regularly to ensure its clarity and integrity -- a hybrid can easily drift into compromise.
ACTION POINT: Know your strategy and regularly monitor it for clarity to prevent drift.
Tuesday, January 5, 2010
Assessing Positions
position brands on a scale from low to high quality and price
A basic way to look at strategic positioning within a market is to position brands on a scale from low to high quality and price. The example below maps out how a number of car brands might position themselves in a typical national market. Each has chosen to focus on particular market segments, and so reduce the number of competitors they have. Brand C, for example sells budget-range cars at the lower end of the price scale and so avoids competition with brands that are targeting customers with more money to spend.
STRATEGIC POSITION OF CAR BRANDS WITHIN A MARKET
- Brand A - $ Budget to $$Mid Range
- Brand B - $$Mid Range to $$$Executive
- Brand C - $ Budget
- Brand D - $Budget to $$Mid Range
- Brand E - $$$Executive to $$$$Luxury
- Brand F - $Budget to $$Mid Range
- Brand G - $$Mid Range to Executive
- Brand H - $$$$Luxury
ACTION POINT: Identify your target segment and know that of your competitors.
Monday, January 4, 2010
Positioning Yourself
you can reduce the destructive forces of competition.
The two coffee shops could avoid competition by targeting different kinds of customers rather than fighting over the same ones. One could choose to supply lower-quality take-out coffee that would appeal to those on a budget, while the other could provide more up market coffees and pastries in a stylish cafe to appeal to those with more income.
In this way, by actively targeting different customers to your competitors and choosing to serve only one market segment, you can reduce the destructive forces of competition. If you are successful and develop a dominant position in your chosen market segment, competitors may be intimidated and look for their own segment to move into.
ACTION POINT: Position your self to develop dominance in your market.