SM Wk 7 - Strategy Execution

8/8/2019 SM Wk 7 - Strategy Execution

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Class 7

Strategy Execution

611407 Strategic ManagementKing Mongkuts University of Technology North Bangkok

Dr.PardTeekasap

Outline

Recap of previous classes

Term project progress report

Strategy Talk

Xbox case study

Lecture on Strategy Execution


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Recap of previous classes

Step of planning the strategy

Identify current problems

Identify goal

Internal analysis

External analysis

Recommend strategies

Internal analysis

SWOT

BCG Matrix

Product Life Cycle

Core competency

Value Chain


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External analysis

5-Force model

Industry change evaluation

Country change evaluation

Companys goal

Vision

Core values

Core purpose

Big, Hairy, Audacious Goal

Vivid description


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Generic strategy

Differentiate Increase the price the customerswilling to buy higher than the additional cost

P >C

Low cost Lower the cost more than the

reduction in the price the customers willing tobuy

C >P

How to be differentiated

Business model innovation look at untappedcustomers

Insufficient wealth

Insufficient access Insufficient skill

Insufficient time


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Every strategy requires resources

Which resources we have?

What can we do from the resources?

What is our goal from the resource we have?

Which resources we need to obtain more?

TRADE-OFF

Strategy need to be hard to copy

Strategy need trade-off


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Term Project Progress Report

Strategy Talk


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Q1: How structurally attractive isthe videogame console business

in 1999?


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Pricing

Why does the price of the console is so low? Howcan console producers make profit?

What is the logic of the razor-blades pricingstrategy

Who else use razor-blades pricing strategy?

Game developers

Where does game developers fit in the 5-forcemodel?

Why are complementors so important in thevideogame industry?

Why cant console makers provide all thenecessary games themselves?

What attracts game developers to develop for aparticular console?


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Indirect network effects

What industries have indirect network effects?

What industries have direct network effects?

Indirect network effects suggest that gameconsole needs to attract lots of gamedevelopers to your console in order to succeed,is it sufficient?

Game

In late 1980s early 1990s, why did Nintendorestrict each game developer to 5 games ayear?

Playstation dont limit the number of game foreach developer. Why could they afford to do sowithout fearing a market crash like the Ataricase?


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Q2: How do the five forces andindustry attractiveness change

over the course of a consolegeneration?

Competition

Winner of every generation has always beendifferent from the previous round. Why?

Does it make sense to delay the launch of thenew generation?

How important is first mover advantage inreleasing the next generation console?


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Q3: What should Xbox do?

2 main options

1. Conventionalvideogame industry approach: a) self-supply of consoles; b) consoles priced below cost; c)Microsoft screens game developers and developerspay Microsoft a $7 per unit royalty

2. PC model: a) box makers pay Microsoft a licensing

fee for the right to make boxes running on Microsoftgaming operating system; b) consoles priced asthe hardware makers see fit; c) game developerspay no royalties and no restriction to become adeveloper

Lecture: Strategy Execution


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Lost value in translation

7 Rules to close the Strategy-to-Performance Gap

Rule 1: Keep it simple, make it concrete (StrategicPrinciple)

Rule 2: Debate assumptions, not forecasts

Rule 3: Use a rigorous framework, speak a commonlanguage


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7 Rules to close the Strategy-

to-

Performance Gap

Rule 4: Discuss resource deployments early

Rule 5: Clearly identify priorities

Rule 6: Continuously monitor performance

Rule 7: Reward and develop execution capabilities

Who makes decision?

Ensure that everyone knows which decisions andactions theyre responsible for

Encourage higher-level managers to delegateoperational decisions


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Where is my information?

Make sure that important info about competitiveenvironment flow quickly to corporateheadquarters so the executive can identifypatterns and best practices

Facilitate information flow across organizationalboundaries

Help field and l ine employees understand howtheir day-to-day choices affect the companysprofit

Strategy Map

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Balance Scorecard

SM Wk 7 - Strategy Execution

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