Page 1
1
Some Personal and Biased ThoughtsProfessor Avi Fiegenbaum-
Area Head – Strategic Management & EntrepreneurshipFaculty of Industrial Engineering & Management
TechnionIPPA 2009. January 28, 2009
ניהול אסטרטגי גלובאלי להשבחת ארגונים:אתגר ליועץ הארגוני כחוליה המקשרת בין תיאוריה
לפרקטיקה
1960s 2008 2020?
IA G I
A G
G
I
A
Israel Global Competitiveness
Page 2
2
Challenges for AGI 1 - Israel 2028:Global, Periphery & Traditional Industries
IG
AB. “OC” ChallengesA. “GI” Challenges D. OC-SM FutureC. “SM” Offerings
ממשלה:
שרים
2020?
יועצים
2020?
Page 3
3
?2028יועץ – מה עלי לעשות לקראת
?
IG
AB. “OC” ChallengesA. “GI” Challenges D. OC-SM FutureC. “SM” Offerings
Page 4
4
Academia
(mgt)
Teaching•Degree•Non degree
Industry 1 Industry 2 Industry N
Government 1 Government 2 Government M
Levels:
A. Knowledge Creation
B. Knowledge Transformation
C. Knowledge Application
Management – OC Challenges 1:Top Down & Bottom Up
Consultants
(“Best Practices”)
“GI” Vision
2028
IG
AB. “OC” ChallengesA. “GI” Challenges D. OC-SM FutureC. “SM” Offerings
Page 5
5
Organizational Consultants Challenges 2: Bridging “AGI”
Knowledge Base
“)A(”
Themes-Methodologies
“)A(”Context (“GI”)
Traditional
OC
SM
SM
IG
AB. “OC” ChallengesA. “GI” Challenges D. OC-SM FutureC. “SM” Offerings
OC SM•Individual + ?•Group + ?•Organization + ?•Industry/Environment ?
Page 6
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
The Strategic Challenge 1:Mid 1990s: The CEO-Chair?
Industry: High tech Divisions: 3 Performance:
Total Sales: $ 800 M Profit: $ 30 M Market value: $ 200 M
Page 7
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
1990 2000A. Financial Markets:
1. # of Companies NASDAQ 7 1202. Market Value $ O.5 B $ 130 B3. # of VC 2 704. VC Total Fund $ 0.1B $ 3B
B. Technological Markets1. # of Technological Incubators 0 232. # of Start Ups Few Thousands
The Strategic Challenge 2:Israeli High Tech 1990s
Page 8
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
The Strategic Challenge 3:Israeli 2020?
1. Why?2. Can others learn from?3. Will Israel high tech re surge?4. Who is responsible (“the invisible hand”)?
1990
2000
2015
I II III IV?
Page 9
THEORETCIAL PERSPECTIVE I:STRATEGYY IS ABOUT RISK TAKING – What Reference Point?
9,000,000
P = 100%
P = 90% P = 10%
10,000,0000
9,000,000
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 10
•Customers •Suppliers •Competitors
•Capabilities
•Vision
•Past
•Present
•Future
Internal
External
Time
Narcissist Competitive
Failure Amorphic
ExternalLow High
High
LowInternal
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
THEORETCIAL PERSPECTIVE II:STRATEGY: Global Competitive Space
Page 11
A. CEO-Board LEADERSHIP-ADAPTATION PERFORMANCE (B) INSIDE (A,C,D)-OUTSIDE (E,F)
B. Performance
C. SBU
D. Corporate
F. Industry
E. Alliance
A. CEO- Chair
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
THEORETCIAL PERSPECTIVE III:STRATEGY: System Management
Page 12
Short-Term: ROE-MS
Leader
Manager
“Fantasizer”Long-
Term: MV
B. Performance
C. SBU
D. Corporate
F. Industry
E. Alliance
A. CEO-Chair
B1. Balance Short-Long Term
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 13
Low HighLong Term
HighShort Term
Low3. Exploration4. Failure1. Strategic2.Exploitation
B. Performance
C. SBU
D. Corporate
F. Industry
E. Alliance
A. CEO-Chair Competitive Diagnostic
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 14
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
B. Performance
C. SBU
D. Corporate
F. Industry
E. Alliance
A. CEO-Chair Relative to LOCAL-------------- Global ------- - Value
A. Short Term:1. ROE ------ 1 2 3 4 52. ROE Change ------ 1 2 3 4 53. SALES ------ 1 2 3 4
54. SALES Change ------ 1 2 3 4
55. Other ------ 1 2 3 4 5
Average: 1 2 3 45
B. Long Term:1. MV ----- 1 2 3 4 52. MV Change ----- 1 2 3 4 53. Dividend ----- 1 2 3 4
54. Other ----- 1 2 3 4 5
Average: 1 2 3 45
Implementation 1
Page 15
B. Performance
C. SBU
D. Corporate
F. Industry
E. Alliance
A. CEO-Chair
Cost- Leadership Differentiation
Cost –
Focus
Differentiation -
Focus
Cost Differentiation
Competitive Advantage
Scope
Narrow
Broad
1. COMPETITIVE ADVANTAGES?
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 16
B. Performance
C. SBU
D. Corporate
F. Industry
E. Alliance
A. CEO-Chair Relative to LOCAL-------------- Global ------- - Value
A. Cost reduction:1. Production ------ 1 2 3 4 52. Marketing ------ 1 2 3 4
53. Logistics ------ 1 2 3 4
54. Encouraged ------ 1 2 3 4 55. Other ------ 1 2 3 4 5
Average: 1 2 3 45
B. Innovation1. Production ----- 1 2 3 4 52. Marketing ----- 1 2 3 4
53. Logistics ----- 1 2 3 4
54. Encouraged ----- 1 2 3 4 5
Average: 1 2 3 45
Implementation 2
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 17
Sales Earning EPS ROC ROEGrowth Growth Growth1. SINGLE FIRM 7.17-- 4.81-- 3.92-- 10.81-- 13.20
2. DOMINANT FIRM 7.42-- 7.34 5.14- 8.24--- 10.18---
3. RELATED DIVER. 9.62 10.39+++ 8.56+ 11.97+++ 14.11+++
4. UNRELATED DIVER. 20.64+++ 18.64+++ 9.56+++ 9.56 10.38-
D. Corporate Level Strategy:
Empirical Findings
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 18
Global
MNE
Trans-
NationalInter-
National
Local Responsiveness
Global Synergisms
High
High
Low
Low
How?
Cost
Differences
1.GLOBAL STRATEGY SUCCESS?
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 19
Local Responsiveness
(Differentiation
Global Integration
(Cost)
1. Division
2. Division
3. Division
2. DIFFERENTIAED ORGANIZATION?
B. MNE:Performance
C. Business
D. Corporate
F. Industry
E. Alliance
A. CEO-Chair
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 20
B. Performance
C. SBU
D. Corporate
F. Industry
E. Alliance
A. CEO-Chair Relative to LOCAL-------------- Global ------- - Value
A. Tangible Synergism1. Production ------ 1 2 3 4 52. Marketing ------ 1 2 3 4
53. Logistics ------ 1 2 3 4
54. Encouraged ------ 1 2 3 4 55. Other ------ 1 2 3 4 5
Average: 1 2 3 45
B. Intangible Synergism 1. Production ----- 1 2 3 4 52. Marketing ----- 1 2 3 4
53. Logistics ----- 1 2 3 4
54. Encouraged ----- 1 2 3 4 5
Average: 1 2 3 45
Implementation 3
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 21
3 years agoNow )2003(
R&D2[ 0..30]8[ 0..100]
Marketing18[ 0..250]38[ 0..400]
Logistics2[ 0..12]4[ 0..50]
Number of Alliances:
B. MNE:Performance
C. Business
D. Corporate
F. Industry
E. Alliance
A. CEO-Chair
STRUCTURAL EVOLUTION
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 22
Pros:•Information•High Cost of Entry•Risk Reduction•Quick Entry•Quick Exit•Standards
B. Performance
C. Business
D. Corporate
F. Industry
E. Alliance
A. CEO-Chair
WHY STRATEGIC ALLIANCES?
Cons:•Coordination•Changing Goals•“Hollow Organization”
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 23
Managing Network Synergisms
Low HighRelational Efficiency
HighStructuralEfficiency
Low
3. Myopic4. Failure1. Strategic2. Amorphic
B. Performance
C. Business
D. Corporate
F. Industry
E. Alliance
A. CEO-Chair
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 24
B. Performance
C. SBU
D. Corporate
F. Industry
E. Alliance
A. CEO-Chair Relative to LOCAL-------------- Global ------- - Value
A. Tangible Synergism1. Production ------ 1 2 3 4 52. Marketing ------ 1 2 3 4
53. Logistics ------ 1 2 3 4
54. Encouraged ------ 1 2 3 4 55. Other ------ 1 2 3 4 5
Average: 1 2 3 45
B. Intangible Synergism 1. Production ----- 1 2 3 4 52. Marketing ----- 1 2 3 4
53. Logistics ----- 1 2 3 4
54. Encouraged ----- 1 2 3 4 5
Average: 1 2 3 45
Implementation 4
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 25
Demand: Total size Growth rate Segmentations
Competition: Buyers Suppliers Threat of new entrants Threat of substitute products Rivalry among existing companies
INDUSTRY ATTRACTIVNESS
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 26
Industry Attractiveness
High LowCompetition
HighDemand
Low3. Efficiency4. Failure1. Strategic2. Growth
B. Performance
C. Business
D. Corporate
F. Industry
E. Alliance
A. CEO-Chair
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 27
B. Performance
C. SBU
D. Corporate
F. Industry
E. Alliance
A. CEO-Chair Relative to LOCAL-------------- Global ------- - Value
A. Competition1. Customers ------ 1 2 3 4 52. Suppliers ------ 1 2 3 4
53. New entrants ------ 1 2 3 4 54. Product substitute ------ 1 2 3 4
55. Rivalry ------ 1 2 3 4
5Average: 1 2 3 4
5
B. Demand 1. Size ----- 1 2 3 4 52. Growth rate ----- 1 2 3 4 53. Segmentation ----- 1 2 3 4 5
Average: 1 2 3 45
Implementation 5
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 28
1 2 3 45
Not at all Agree
1. Has a global & strategic model to enhance MV 1 2 3 45
2. Gets the right information with out asking 1 2 3 4 5
3. Affects the company strategy 1 2 3 4 5
4. Affects short term performance (ROE) 1 2 3 45
5. Affects long term performance (MV) 1 2 3 4 5
6. In sum, I am happy with the chairman-BOD
Contribution to the company 1 2 3 4 5
CEO-CHIAR: GLOBAL STRATEGIC EVLAUTION
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 29
CEO- Chair: Global Strategic Management Model to Enhance Market Value
0
1
2
3
4
5
0 1 2 3 4 5
Long Term
Shor
t Ter
m 0
1
2
3
4
5
0 1 2 3 4 5
vision
obje
ctiv
e &
goal
s
0
1
2
3
4
5
0 1 2 3 4 5
Local Responsivness
Glo
bal S
yner
gies
0
1
2
3
4
5
0 1 2 3 4 5
Relational EfficiencySt
ruct
ural
Effi
cien
cy
0
1
2
3
4
5
0 1 2 3 4 5
Demand
Riva
lry
0
1
2
3
4
5
0 1 2 3 4 5
Leader
Adap
tive
0
1
2
3
4
5
0 1 2 3 4 5
Cost
Scop
e
C1
C1
C1
C1
C1
C1 C1
C2
C2
C2
C2
C2
C2C2
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 30
2020: Co Evolution:Traditional Industries & High Tech?
Traditional Industries
1960s 2008 2020?
Israel Global Competitiveness
Traditional Industries
High Tech
High Tech40K
17K
10K
Innovation•Social Capital,•Entrepreneurship
IG
AB. “OC” ChallengesA. “GI” Challenges B. OC-SM FutureA. “SM” Offerings
Page 31
Shoot to the moon, even if you miss, you still will be
among, stars …Thank You