Cours Strategie ENSIIE 2012 v1.61

Copyright Erwan Guiziou 2013 All rights reserved

2013 Erwan Guiziou

Enterprise Strategy


Agenda

Strategic

analysis

Objectives and

strategy Change


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats

OBJECTIVES AND STRATEGY

Options review

Strategy

Services offer

CHANGE

Pre-announcement actions

HR management

Announcement

Quick wins

Performance evaluation

Competitors reaction

Agenda and milestones

Consequences


Internal analysis

M.O.S.T.

Value system

Structure

Systems

Human Ressources

Sales / Marketing

Finance

Operations

R&D / after-sale


Mission, objectives Strategy, tactics (1/3)

Mission and objectives

Has the entreprise defined a mission (why we exist) / values (what we

believe in) / a vision (what we want to become) ?

- Are the objectives of the company clearly defined ?

- Are the objectives shared by employees ?

- Can the objectives be quantified ?

- Are the objectives appropriate to the current organisation or are they

outdated? (has the world changed but not the objectives?)



Strategy and tactics

- is the strategy of the organisation clearly defined ? If yes, which one is it ?

(differentiated / low-cost et large / niche)

- how is the strategy defined ? Emerging, deliberate, planned ?

- is the strategy coherent when looking at the objectives ? Sustainable ?

- is the strategy cohrent with the environnement and internally ?

Sustainable ?

- Basic elements: objectives scope means



Strategy and tactics

- is the strategy using the ressources optimally ? Or will an alternative

strategy deliver a higher net present value ?

- Financial capital (focus on the most profitable operations)

- Human capital (HR strategy)

- Physical capital (machinery investment)

- Customer capital (loyalty, reputation, brand)

- Is the risk / benefits ratio coherent ?


Now listen carefully

Interview Dame Anita Roddick:

Which company is she the founder of ?

Who does it belong to now ?

What is she mainly referring to in the video ? What are two themes that seem to oppose themselves ?

List all the internal analysis topics she is talking about

Interview Michael Dell:

What is he mainly referring to ? How is the strategy set at Dell ?

List all the internal analysis topics he is talking about


Internal analysis

M.O.S.T.

Value system

Structure

Systems

Human Ressources

Sales / Marketing

Finance

Operations

R&D / after-sale


The value system (1/1)

Supplier Firm Customer

Inventory Distribution channels

- What is the value system in place ?

- Advantages / drawbacks ?

- How does the channel work ? What is it made of ?

- Is it possible to change it ?


Internal analysis

M.O.S.T.

Value system

Structure

Systems

Human Ressources

Sales / Marketing

Finance

Operations

R&D / after-sale


Structure (1/3)

- Classical structure

- Simple structure (SOHO)

- Fonctional structure (SMB)


Structure (1/3)

- Divisional structure

(large companies)

- projects structure (building, communication or new product)

- professionnal bureaucracy (hospitals, universities)


Structure (3/3)

- is the structure coherent towards the environnement or is it reaching its

limits ?

- is the structure sub-optimal and produces insufficient coordination or

differentiation for the needs of the organisation ?

- is the structure coherent regarding strategy ?


Exemple: legal structure

IES

S.A.R.L.

prsidence

SAS

Holding

ACESI

France

ACESI

Suisse

ACESI

Centre / Est

ACESI

Canada


Organisational structure

From simple

structure (SOHO)...

to fonctional structure(SMB)

Write down what the issues could be in such a transformation?


Analyse interne

M.O.S.T.

Value system

Structure

Systems

Human Ressources

Sales / Marketing

Finance

Operations

R&D / after-sale


Systems (1/2)

- Are the following systems in place?

- Control

- Coordination of the strategy implementation?

- Information

- Do they support the strategy ?

- Can they be easily copied by the competition ?

- Is the advantage sustainable ? Patents ?

- Are costs reduced ?

- Do they contribute to the user experience?

- If very developped, can they become , can they hinder progress ?

Copyright Erwan Guiziou 2013 All rights reserved Copyright Erwan Guiziou 2012 Tous droits rservs

Systems (2/2) Anthonys triangle

Anthony, Planning and control systems: a framework for analysis, Division of research, Harvard Business School, 1965


Tactical

Knowledge

Operational

Systems - Anthonys triangle example

12

14 15 16

5 6 7 8

9 10

1 2 3 4

11

13

Production Finance/ Accountancy

Sales/ Marketing

Human Resources

NA

NA

x

x

NA

x x x

- Sys gestion comm. - Data warehouse - E-mail + Intra/Internet - Sys crdit

- Sys de gestion commandes - Data warehouse

- Sys gestion comm. -Paie - Intranet

- Sys prise de commandes. - Data warehouse - Email + XL

- Sys training et Perf via Intranet - Sys de chemin de carrire

P&L enXL

Pas de systmes budgtaires

Pas de sys planif. Pas de sys employ

Sys. cout du travail mais rien dautre

Pas assez de sys

No sys.

No sys.

x x x x Strategic


ACESI Systems

12

14 15 16

5 6 7 8

9 10

1 2 3 4

11

13

Production Finance/ Accountancy

Sales/ Marketing

Human resources

Myde Intranet pour CRS

Intranet pour vision projet

x x

x x

- - E-mail + Intra/Internet - Sys crdit EBP

- CRM - EBP - XL

- Sys gestion comm. -Paie - Intranet

- Sys prise de Commandes -Email, XL - EPB + CRM

- Intranet

P&L en XL ?

x x x x

x

x

- Intranet

Tactical

Knowledge

Operational

Strategic


Systems (3/3) another classification

McKenney, McFarlan and Pyburn, The information archipelago plotting a course Harvard Business Review, Jan-Feb 1983



Interview M. Lija at Sony Ericsson

Which systems is he referring too ?

What kind of advantages does the IT systems bring to the business ?

Why is it important ?

What triggered these changes to the IT systems?

Which other aspects are covered at the very end of the video?


Exercise for next session

Choose one company and run an internal analysis on the following topics by answering at least the

following questions:

Describe its M.O.S.T

What is its value system ? Does it bring an advantage ? Drawbacks ? Etc.

Describe its structure ? Coherence with the strategy ?

Which systems does it use ? Why ? Any competitive advantage ?


Internal analysis

M.O.S.T.

Value system

Structure

Systems

Human Ressources

Sales / Marketing

Finance

Operations

R&D / after-sale


Human resources (1/6) - mechanisms

- is the number of employees enough to follow the strategy?

- is the quality of employees sufficient to implement the strategy?

- Mechanisms:

Performance

- Are the mechanims relevant ? Do they support the strategy ?

- Does the reward strategy encourage a behaviour compatible with the

overall strategy?

Evaluation

Training

Rewards

Recruitment

Source: Fombrun, Tichy and Devanna, 1984 (C) John Wiley and Sons Inc.


Rajans type of rewards

Security-driven:

Life-time jobs Corporate prestige

Contribution-driven:

Performance-related pay Merit bonus

Employability-driven:

Training and development Personal career plans

Tradition-driven:

Cost of living increases Perks

No

n-m

on

ey r

ela

ted

M

on

ey re

late

d

Individual-related

Group-related


Human resources (2/6) - culture

- Organisation culture classification:

- is the culture coherent with the strategy ?

Mesure of the possibility for a community to

pursue objectives rapidly and efficiently, without

taking into account personal ties

Mesure of sincere friendship

between community members

high

low

low high

So

cia

bil

ity

Solidarity

Fragmented

Networked Communal

Mercenary

Source: Goffee and Jones, 2000 Harvard Business Review



Mesure of sincere friendship between community members Sociability

Mesure of the possibility for a community to pursue objectives rapidly and

efficiently, with taking into account personal ties Solidarity

- People try to make friends in the company and have strong relationships

- people get on well together

- People in our organisation meet outside work

- People appreciate each other

- When people leave the organisation, they stay in contact

- People help each other because they appreciate each other

- People share their personal stories

- People in our company understands and share the same business objectives

- work is performed efficiently and is productive

- Our company takes strong actions to solve inadequate performance

- Our collective will to win is strong

- When opportunities appear for a competitive advantage, we are quick to seize them*

- We have the same strategic goals

- We know who our competition is

-1 0 1


high

low

low high

Socia

bili

ty

Solidarity

Fragmented

Networked Communal

Mercenary

Source: Goffee and Jones, 2000 Harvard Business Review


- Advantages: Creativity, engagement

- Drawbacks: Cliques, gossip, low

productivity, little idea critics

- Example: Unilever

- Works when: long-term strategies, critical

knowledge of the local market, the global

success is a sum of local successses

- Advantages : competitive sense, will to win,

high productivity

- Drawbacks : little cooperation, ideas

exchanges, creativity

- Example : Dell

- Works when : rapid change, clear and

mesurable corporate goals, clear identified

competition

- Advantages :

organisational identity, risks and rewards

sharing, enthousiasm

- Drawbacks : linked to the leader, pbs with

growth, diversification or internationalisation

- Example : start-ups

- Works when : innovation with cooperation,

long term strategies, dynamic and complexe

business environnement

- Advantages : specialists in one domain

(surgeons, lawyers)

- Drawbacks : critical towards the

organisation, little information sharing

- Example : University, lawyers practice

- Works when : little dependance at work,

individual innovation



Mesure of sincere friendship between community members Sociability

Mesure of the possibility for a community to pursue objectives rapidly and

efficiently, with taking into account personal ties Solidarity

- Promote ideas sharing, interests and emotions to recruit PLU

- increase social interactions between employees (parties, excursions, etc.)

- reduce formality between employes

- limit hierarchical differences

- act as a friend, pay attention to those in need

- develop conscience of competition through videos, newsletters, memos, etc.

- create a sense of urgency

- stimulate the will to win

- encourage adhesion to share organisational goals


Human resources (6/6) - Leadership

- Do we have the right leader or are we at the limits ?

- Management roles:

(team leader / role model / referee / negociator)

Does the management fulfill all the roles or are some neglected ?

- Is the style of leadership appropriate or anachronic, distant, autocratic ?

- Do we have leaders (through values) or hierarchical control methods?

- Do we have a succession plan in place?



Interview Mrs Flanagan

Which type of companies does she refer to ?

What is essential according to her for an organisation ?

What is the tactic she recommends for the board ?

What is the problem she refers to in recruitment ? What can be the consequences ? What does she recommend ? What should be the rule to

be followed ?

What kind of questions did they ask at the recruitment sessions ? What do you think about it ? Explain your viewpoint



Interview Michael Dell

Which processes in the HR area are talked about ?

What is Michael Dells view on culture ? Which variable is he refering to ? Does it make sense in his company ?

Take a critical view at it, what does the journalist underlines ? What do you think about MDs answer ?


Now listen carefully and analyse

News about EasyJet and Sir Stelios Haji-Ioannou

Read on http://www.guardian.co.uk/business/2009/dec/09/easyjet-boss-to-stand-down

Analyse the document. Which HR issues are illustrated here ?

What would you recommend to solve them ?


Internal analysis

M.O.S.T.

Value system

Structure

Systems

Human Ressources

Sales / Marketing

Finance

Operations

R&D / after-sales


Sales and marketing (1/5)

- Is the company market oriented? Or production first and then try to sell?

- National or international quality ?

- Market orientation from the top management or too busy by production?

- Status of the marketing in the company? Sophisticated ? Or not developped

enough ?

- Segmentation (transactional (SB, consumers) relationship (public, LA, LB))

- Targeting (different type of offers for different segments)

- Posititioning (create an image of the product for the target and position it towards other products)

- CRM in place?

- What is the process? Monitoring?


Marketing / ventes (2/5) exemple ACESI demandes clients


Sales and marketing (positioning illustration)



Product (range)

Price

Place (channel)

Promotion

Physical location

People

Process

Strengths / weaknesses ?

Se

rvic

es



high

low

high low

Ma

rke

t

gro

wth

Relative market share

Source: Boston Consulting Group / Kotler, Marketing Management

Products positioning



The result is a marketing plan that contains:

- Targets

- Commercial channels

- Operations to do during the year Sales actions or promotions

- Numbers to reach revenues, market share, etc.

- Means to put in place (physical, human, financial)

- Milestones




What is continuously present in his speech ? why is it important ?

Interview Dame Anita Roddick

What does she think about branding ? Why ?

Are there different levels of branding ? For what purpose?

Interview Sir Stelios Haji-Ioannou (2 videos)

What is the strategy here in terms of brand(s) ? Why such a choice ?

What about brand extension ? Advantages / drawbacks ? Quote other companies that do this

Compare with the brand strategy at Body Shop




How does he see marketing?

Summarize the 3 main ideas in the video

Do you know Dave Carroll ? (and United Airlines)

www.youtube.com/watch?v=5YGc4zOqozo

http://www.youtube.com/watch?v=_Hd8XI42i2M

www.youtube.com/watch?v=n12WFZq2__0&feature=related


Internal analysis

M.O.S.T.

Value system

Structure

Systems

Human Ressources

Sales / Marketing

Finance

Operations

R&D / after-sales


Finance (1/3) Financial ratios

Return on capital employed (ROCE)

Profit on sales Sales generation

1

2 3

Fixed assets utilisation

Current assets utilisation

4

Assets

Sales costs / sales

Costs

Admin costs / Sales

Other costs / Sales

Sales / debtors Sales / creditors Sales / stock

5

Sales / nb of employees

Profit / nb employees

Current ratio

Liquidity ratio

6

7

8

9

Debtors sales Creditors sales Stock sales


Finance (2/3) Profitability ratios

3

4

1

2

ROCE : Return On Capital Employed: indicates the efficiency and profitability of a company's capital investments

Profit on sales = Profit on sales = measures how much out of every dollar of sales a company actually keeps in earnings

Net profit

Sales

EBIT

Total assets Current liabilities

Sales generation = shows the value of sales generated from each $ of total assets. The higher the ratio, the better.

Sales

Total assets

Fixed assets utilisation ( = sales / fixed assets) and current assets ( = sales / current assets ) utilisation: the same as #3 with more precision

6

7

Sales / # of employees

Profit / # nb of employees


Finance Financial ratios

But profitability ratios are not enough to gain a balanced view of the

performance of a company.

Why ?

Profitability is important but achieving liquidity is vital for survival. A lot of

failure have come from that.

A company must be able to meet its financial obligations.


Finance (3/3) Liquidity ratios

8

9

Current ratio: measures the ability of a company to meet its financial obligations due within one year. A low current ratio indicates potential difficulties. High current ratio can mean idle resources.

Liquid ratio = attempts to measure a companys ability to pay its way in the short-term without having to liquidate stock. The acid test, can we pay our way ? i.e. pay our debts as and when they are due.

Current assets - stocks

Current liabilities

Current assets

Current liabilities

5

Debtors weeks: number of weeks on average debtors take to pay their invoices. The lower the ratio the better. Efficiency of the credit control

Sales

Stocks Stock turn: number of times stock is turned over on average in one year. The higher the ratio the better.

Debtors x number of weeks

in the period

Sales for the period

Creditors weeks: number of weeks on average the company takes to pay its creditors. The higher the ratio the better. But be careful on not overdoing it in a partnership

Creditors x number of weeks

in the period

Sales for the period


Finances (2/2)

- ROCE ? Profitable ? Profit growing ?

- Return on sales? Do we have the correct marketing mix ? Are margins

reduced because of competition?

- Do the shareholders trust the company?

- Ratios: compare with competition (part II)

- Environnement: how is the company financed ? Coherent? Long-term?

- Does the finance position of the company constraints its strategic

choices?


Internal analysis

Finance video


Internal analysis

M.O.S.T.

Value system

Structure

Systems

Human Ressources

Sales / Marketing

Finance

Operations

R&D / after-sales


Operations a few definitions

- Capacity (the measure of usable resources available to a system)

- Quality

- quality by inspection (eg 10% of the products checked)

- quality control, aiming at mistakes prevention

- quality insurance (documentation and consistency)

- TQM process improvement requests

- 6 Sigma: 3.4 defects per million opportunities

- Scheduling (minimizing production time and costs) lead time = getting the materials + building

- Structure (suppliers, internal operations, customers

- Inventory


Operations an example Dell


Step 1 - Preparation and assembly

1. Process initiation - Orders download from IT system (in parts) and description of order called the traveller (paper)

2. Parts availability checked --> orders not started if parts missing. Anti static tote with traveller on conveyor belt

3. Parts added to tote with pick to lights (PTL) system - each part scanned --> inventory and tracability measures

4. Chassis, memories and processors added at the end in a special tray as more costly (damage risks reduced)

5.Operator installs MB into chassis - delicate operation separated - conveyor moves system to furthest BTO cell

6. Three operators per cell - 2 for build, 1 for testing - when system built, quick test applied; if system fails test, it is

7. rerouted to another area where retest occurs. If fails again, disassembly process happens



Step 2 - Quality checks, Software download and labelling

8. Systems removed from conveyor belt by multi-unit Stacker for SW download and tests - human damages avoided

9. Ten percent of systems pulled off from assembly line for quality assurance checks

10. Two test cycles - diagnostics and hardware. After software downloaded, systems re-tested

11. Common and some customer specific SW download - Final test, systems de-stacked and moved back to conveyor

11A. Specific customer hardware, software, asset tagging and labelling added

12. Brand and model labels applied - FCC and other suppliers label applied(e.g. Intel) - Here as at each stage, capture

13. of routing position - Full quality test (labels, cosmetics, hoods)



Step 3 - Shipping preparation

14. System scanned - removed from tray by hoist and placed into pre-assembled cardboard box

15. Docs and accessories added and scanned into the box using PTL system (inventory and WIP adjust)

16. Ten percent of systems have contents checked

17. Daily, 1.5 percent of system are totally checked to evaluate customer experience with initial use of the equipment

18. Automatic seal of boxes - multiple orders move to staging area - single orders directly to shipping

19. Multi-unit order consolidated assembled together and placed on conveyor to shipping. Completed orders scanned

20. and moved directly to pre-assigned trucks. Last scan before truck. Peripherals and monitors merged offsite



The Customer Experience metrics available to every employee world-wide region by region updated every week

STT - Ship To Target: It measures the percentage of complete systems which ship from Dells manufacturing facilities within 5 days from the time the order was entered into the sales system

IFIR - Initial Field Incident Rate: It measures customer issues (real or perceived) requiring parts or service or replacement of a system within 30 days of the system

shipment.

MWD Missing, Wrong and Damaged: It measures customer issues when delivered systems either do not contain the right components or components are

missing or systems are damaged. Very important for customer satisfaction.

SDOTFTF Service Delivery On-Time First Time Fix: It measures the percentage of service calls completed by a Dell Service Provider (DSP) in which the technician

arrived with the required part(s) within the contractual period (for example, 4 hours

or Next Business Day) and resolved the issue on the first visit.

Operations Dell - metrics


Dell ConfidentialDell Confidential

EMF operational MWD Trend

EMF MW&D Trend

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

0.90%

1.00%

Log Quarter To Date 0.14% 0.16% 0.14% 0.15% 0.16% 0.18% 0.18% 0.17% 0.16% 0.14% 0.13%

Mfg Quarter To Date 0.66% 0.44% 0.35% 0.37% 0.37% 0.41% 0.41% 0.39% 0.36% 0.32% 0.29%

Weekly Logistics Actual 0.14% 0.16% 0.14% 0.16% 0.17% 0.23% 0.16% 0.15% 0.13% 0.05% 0.05% 0.00% 0.00% 0.00% 0.00%

Weekly Mfg Actual 0.66% 0.44% 0.35% 0.38% 0.37% 0.51% 0.43% 0.30% 0.17% 0.14% 0.04% 0.00% 0.00% 0.00% 0.00%

Cumul Fcast 0.60% 0.57% 0.55% 0.53% 0.50% 0.48% 0.46% 0.44% 0.41% 0.39% 0.37% 0.34% 0.32% 0.30%

Weekly Actual 0.80% 0.60% 0.49% 0.54% 0.54% 0.74% 0.60% 0.45% 0.29% 0.18% 0.08%

FY01Q3 FY01Q4 Q1 W1 Q1 W2 Q1 W3 Q1 W4 Q1 W5 Q1 W6 Q1 W7 Q1 W8 Q1 W9 Q1 W10 Q1 W11 Q1 W12 Q1 W13



Supplier Collaboration

Forecast / Master Sales Plan (MSP)

Demand Management

Supplier commits

Mat

eria

ls c

on

stra

ints

Master Production Plan (MPP)

Material Requirement Plan (MRP)

Requisition

Purchase order placement

Confirmation by supplier

Delivery HUB

Customer order received

Mfg call off

Operations Dell managing demand


Supply Chain Integration

CustomersSuppliers Dell

www.support.dell.com

www.dell.com

www.dell.com/premier

valuechain.dell.com

Internet Speeds the Flow of Information

Inside.dell.com

Operations IT to the rescue


Operations (2/2)

- Are operations linked with marketing?

- What are the options chosen to fight against competition? (word

document)

- Any problems with capacity?

- Is production sufficient to get economies of scale?

- Quality ? Can it be used as a differentiation?

- Usage of resources vs Usage of material

- What is the structure of the system ?

- Inventory? Possible improvements?


Internal analysis

M.O.S.T.

Value system

Structure

Systems

Human Ressources

Sales / Marketing

Finance

Operations

R&D / after-sales


R&D after sales (1/1)

- Does the R&D support the overall strategy or are the managers pursuiing

their own goals?

- Enough funds to insure products developpment?

- Frequency of new products developpment ? Using customer feedback?

Formalised ?

- Alternative to channel distribution?

- After-sales support quality?


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats


Options review

Strategy

Services offer

CHANGE


HR management

Announcement

Quick wins




Consequences


External analysis

Organisation

Competition

Market

Industry (sector)

Macro-

environnement

P.E.S.T.L.E.

+ Key success factors

+ scenarii

Porter 5 forces

Strategic groups +

market segments


External analysis

Macro-environnement

P.E.S.T.L.E. + key success factors + scenarii

Sector analysis

Data

Porter 5 forces

Industry lifecycle

Competition analysis

Strategic groups

Market segments



- do not define too narrow a scope

- Goal: determine the key success factors that affect the environnmental

change

- See document

- Derive KSF

- Define two scenarii with one KSF and describe the potential impacts on

the company


Analyse externe

Macro-environnement


Sector analysis

Data

Porter 5 forces

Industry lifecycle

Competition analysis

Strategic groups

Market segments


Sector analysis : data

0,0

-2,6

3,5

9,6

11,4

13,0 13,7

14,9

18,4

22,6 23,0

-5,0

0,0

5,0

10,0

15,0

20,0

25,0

Investors return, 1994 - 2004

Top 500

average

(42 sectors)

12,4


Sector analysis : Porter 5 forces

New entrants

Bargaining power

of customers

Substitution

threat

Bargaining power

of suppliers Rivalry intensity


Sector analysis : Porter 5 forces

Threat of new entrants - industry with attractive margins?

- Important capital needed to start?

- is the brand important?

- Cost of operations?

- Government influence?

- Access to distribution channels?

- Competition retaliation high?

Rivalry intensity: - industry growth?

- how many competitors on the market?

- easy differentiation?

- exit barriers : low / high?

- price war ?

Bargaining power of suppliers: - purchasing volume?

- substitution costs?

- input of the company important for the supplier?

- competitive market ?

- number of suppliers increasing or decreasing?

Bargaining power of customers: - customer concentration?

- critical size for customers?

- number of competitors offering a similar product?

- substitution costs?

- information availability?

Substitution threat: - Product substitue possible?


Sector analysis : industry lifecycle

Source: Kottler et Armstrong - 1990

Time Mark

et

siz

e

Introduction Growth Maturity Decline Consolidation

Low rivalry

High differentiation

Innovation is key

Low rivalry

Strong growth buyers are weak

Barriers to entry low

Key is capacitiy to

growth

Growing rivalry

Growth is slower a few exits

Key: strong

finance and

management

More powerful

buyers

Slow growth

Standard products

Barriers to entry

high

Key are market

share and costs

control

Extreme rivalry

A lot of exits

Strong competition on

price

Cost and implication key


Sector analysis : industry lifecycle

- Where is your industry on the curve ?

- Where are your products on the curve ?

Source: Kottler et Armstrong - 1990

Time

Mark

et

siz

e

Introduction Growth Maturity Decline Consolidation


Structural map: an example

Competition Suppliers Partners


Strategic groups market segments


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats


Options review

Strategy

Services offer

CHANGE


HR management

Announcement

Quick wins




Consequences


SWOT example a local IT services company

Positive Negative

Internal

External

Strengths Weaknesses

Opportunities Threats

-Culture (and values)

- Technical expertise

- Operations (dashboard system)

- Management team with 3 people

- Sound finances

- Financial independance limits the

development

- Experts recruitment is difficult

- Strategy and marketing not formalised

- The industry is changing quickly, risk of commoditization

- Emerging technologies (Cloud)

- Strong competition

- Difficult differentiation with the

competition

- International development

- New services development

(consultancy services)

- Consultants not treating those

aspects

- Borders proximity


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats


Options review

Strategy

Services offer

CHANGE


HR management

Announcement

Quick wins




Consequences


Generic strategy (part II)


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats


Options review

Strategy

Services offer

CHANGE


HR management

Announcement

Quick wins




Consequences


The strategy clock

Source: Johnson and Scholes, 2009

Low

High

Low High

1

2

3

4

5

6

7

8


Diversification ?


Diversification ?

Source: Johnson and Scholes, 2009

Perf

orm

ance

Low

High


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats


Options review

Strategy

Services offer

CHANGE


HR management

Announcement

Quick wins




Consequences


SFA analysis

Strategic options Suitability Feasibility Acceptability Remarks

Directions

Do nothing

Withdrawal

Consolidation

Penetration

Product development

Market development

Diversification

Methods

Internal development (organic growth)

Mergers and acquisitions

Joint ventures and strategic alliances


Out of the box thinking ? (read the article written by W. Chan Kim and R. Mauborgne !)

The market structure

drives performance

Strategy drives

the structure

Structural view

or environmental

determinism

Blue ocean view


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats


Options review

Strategy

Services offer

CHANGE


HR management

Announcement

Quick wins




Consequences



- Interview M. Brandon

- Retrieve the main ideas

- Comment / analyse

- What can be the barriers to change


Change is good but



- To get change accepted, management needs to identify the stakeholders,

both from an interest and power point of view

- Support at top level is crucial to success


The stakeholder power / interest matrix

Keep satisfied Key players

Minimal effort Keep informed

Stakeholder interest

Stakeholder

power

Low

Low

High

High

Parts suppliers

Media Competition

Services suppliers

Analysts

Shareholders

Company management

Front office staff

Customers

Back office staff



Vision barrier

Establish a sense of urgency

Operationnal barrier

Financial barrier

People barrier

Motivation, rewards*, training, recrutement

* remember Rajans matrix


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats


Options review

Strategy

Services offer

CHANGE


HR management

Announcement

Quick wins




Consequences


HR management

Changing the structure

Dells video on structure what are the key lessons ?

Changing the culture

Coming back to the culture matrix, which one is the most appropriate ? If the culture needs changing, which steps should be taken ?

Illustration with the video (John Roberts, former chief executive United Utilities)

Competency gap analysis, staff audit

Finding change agents

Setting a developement and training program for the change leaders


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats


Options review

Strategy

Services offer

CHANGE


HR management

Announcement

Quick wins




Consequences


Announcement

Internal announcement

explain the reason for change and instil a sense of urgency

communicate the vision

present the intended roadmap

encourage feedback

present the new structure and the first change agents

Do not wait for everything to be planned

How do you announce departures of internal staff ? (Video of M. Sharman)

Then public launch


Announcement effective communication

Routine Complex

CHANGES

TYPE

OF

MEDIA

Face-to-face(one-to-one or

group)

Interactive(e.g. telephone

video conferencing)

Personal memo(e.g. tailored

memos, letters)

General bulletins(e.g. circulars,

announcement

on noticeboards)

Routine communication

for routine change

Rich communication

for complex change

EFFECTIVE

COMMUNICATION

Overly rich

communication

causes confusion

Too little information and

sensitivity leads to mistrust

and lack of commitment

Lengel and Dafts effective communication of change / Source: Johnson and Scholes, p 564, 2002

And take internal social

networks / Intranet into

account !


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats


Options review

Strategy

Services offer

CHANGE


HR management

Announcement

Quick wins




Consequences


Example of actions that can lead to quick wins

Hire new managers ?

Acquire a small company ?

Start a complete training program ?

Organise a all employees meeting ?

Align employees objectives with the companys objectives

until changes sink deeply into a companys culture [], new approaches are fragile and subject to regression (Kotter, 1995)

Move dissenters sidelines Letting people go (illustration with John Roberts video)


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats


Options review

Strategy

Services offer

CHANGE


HR management

Announcement

Quick wins




Consequences


Performance evaluation: Kaplan and Norton balanced

scorecard

Customer perspective

Financial perspective

Innovation and learning perspective

Internal business perspective

- Return on capital employed

- Profitability

- Revenue growth

- Cashflow

- % revenue from services

- Customer satisfaction survey

- Call center satisfaction

- Market share

- Pricing index

- Number of customers lost / won

- Customer service lead-time

- SDOTFTF: Service Delivery

On Time First Time Fix

- Tender success rate

- Spare parts delivery performance

- Turnover

- Staff survey

- Number of employee suggestions

- Profit per employee

- Benchmarking index

Finance

Sales/Marketing Operations

HR / R&D


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats


Options review

Strategy

Services offer

CHANGE


HR management

Announcement

Quick wins




Consequences


Competitorsmoves

Try not to get into a price war

Reassess your own decisions / moves


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats


Options review

Strategy

Services offer

CHANGE


HR management

Announcement

Quick wins




Consequences



Prepare the plans in advance

Which plans do you need to prepare and execute the change ?



Deliverables Base documents to prepare

Plans Communication plan

Sponsoring plan

Coaching plan

Training plan

Training tools (user guide, e-learning, serious games)

Resistance to change plan, feedback plan on change

Events and key moments in the project (events limited to the change management team, launch events

Metrics to measure plan follow up

Roadmap for the change management Roadmap describing mission and objectives of the groupe, actions and means to implement, milestones



Deliverables Comments Surveys (offline or online)

Configuration and questions / answers

Training tools Guided tours

E-learning

Questions and answers

User guide

Training material sandbox


Agenda

STRATEGIC ANALYSIS

Internal analysis

External analysis

SWOT

- Strengths

- Weaknesses

- Opportunities

- Threats


Options review

Strategy

Services offer

CHANGE


HR management

Announcement

Quick wins




Consequences


Consequences

Skills, capabilities and resources

Rewards and systems

Becoming a learning organisation (ref: Peter Senge)

Think about the consequences for the company and its people in terms of :


A word of conclusion

Encouraging risk (illustration video M. Dell)

Gouvernance about setting the overall strategy in large organisations (illustration video M. Dell)


Start all over again !

Strategic

analysis

Objectives and

strategy Change

Cours Strategie ENSIIE 2012 v1.61

Documents

objectives strategy

strategy coherent

alternative strategy

strategy cohrent

sale copyright erwan

rights reserved mission

threats objectives

objectives scope