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The Management of Strategy

BASIC CONCEPT of STRATEGIC MANAGEMENT

Strategic Management InputsStrategic Management and Strategic Competitiveness

Ir. Puji Satyawan E Putranto, MM, MMin

GOING TO THE

EXCELLENT ORGANIZATION

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EXCELLENT

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1931

2002

Trend setter the first European air hostesses Excellent Customer services Teknologi unggul Top 10 untuk > 100 tujuan dunia. The most Swiss of Swiss companies Dari 64 karyawan 17.000 karyawan Motto: Quality Wins Values: Quality-ReliabilityHospitality Marketing integratif dan sinergis

TELEGRAM PAGER

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"To provide the fast food customer food prepared in the same high-quality manner world-wide that is tasty, reasonably-priced & delivered consistently in a low-key dcor and friendly atmosphere."
McDonalds creates value for customers through: Business-level strategies Product Innovation Upgrading existing restaurants Listened to customers value menu, healthier items, more convenience Purchasing European property for future expansion Corporate-level strategies Disposed of its interests in other restaurants

Hierarchy of Strategy

Corporate Strategy
Business (Division Level) Strategy Functional Strategy

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Strategy Hierarchy

Corporate Strategy

Business Strategies

Functional Strategies (R&D, Marketing, Manufacturing, HR, Finance, etc.) - Division Operating Strategies (regions, plants, departments within functional areas) - Department

Strategy hierarchy for a diversified company

Strategy: the overall goal of the business. strategos (greek): strato (army) + ago (leading) referred to a military commander (during the Athenian democracy 500 BC) A strategy of a corporation forms a comprehensive master plan stating how the corporation will achieve its mission and objectives. It maximizes competitive advantage and minimizes competitive disadvantage. Tactic: the set of tools or actions taken to fulfill strategy. Specific operating plan detailing how a strategy is to be implemented in terms of when and where it is to be put into action. Timing tactics Market location tactics tactica (new Latin), taktika (Greek) plural: fit for arranging, place in battle formation

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What

Nature of Competition: Basic concepts

Strategic Competitiveness Achieved when a firm formulate & implements a value-creating strategy Strategy Integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage Competitive Advantage (CA) Implemented strategy that competitors are unable to duplicate or find too costly to imitate Above Average Returns Returns in excess of what investor expects in comparison to other investments with similar risk

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Nature of Competition: Basic concepts

Risk Investors uncertainty about economic gains/losses resulting from a particular investment Average Returns Returns equal to what investor expects in comparison to other investments with similar risk Strategic Management Process (SMP) Full set of commitments, decisions and actions required for a firm to achieve strategic competitiveness and earn above average returns

ORGANIZATIONAL LIFE CYCLE

MATURITY III

REVENUES

DECLINE GROWTH II BIRTH I DEATH V IV

TIME

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The Competitive Landscape

Introduction: The Competitive Landscape (CL)
Pace of change is rapid Industry boundaries are blurring Financial capital is more scarce and markets are increasingly volatile Other CL characteristics: Economies of scale, advertising budgets not as effective as before, change in managerial mind-set from traditional to more flexible and innovative

The Competitive Landscape (Contd)

Introduction: The Competitive Landscape (CL) Hypercompetition extremely intense rivalry among competing firms, characterized by Escalating & increasingly aggressive competitive moves Assumptions of market stability replaced with notion of Instability and change Two primary drivers of the competitive landscape: The global economy Technology

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The Competitive Landscape (Contd)

The Global Economy Goods, services, people, skills and ideas move freely across geographic borders Europe, through the European Union (EU) is the worlds largest single market EU vs U.S. GDP: 35% higher Emerging major competitive forces: China & India In summary: globalization increased economic interdependence among countries as reflected in the flow of goods and services, financial capital, and knowledge across country borders

The Competitive Landscape (Contd)

Technology and Technology Changes (Contd) Technology diffusion Perpetual innovation: describes how new informationintensive technologies are replacing older forms Speed to market may be primary competitive advantage 12 18 month timeframe to gather info re: competitor R&D Disruptive technologies Technologies that Destroy value of existing technology Create new markets

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The Competitive Landscape (Contd)

Technology and Technology Changes (Contd) The information age Dramatic changes over last several years Major technological developments effect how information is used and disseminated Internet provides infrastructure for information anytime, anywhere Increasing knowledge intensity Defined as information, intelligence & expertise and is the basis of technology and its application Gained through experience, observations and inferences Strategic Flexibility set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment

Bukan PILIHAN
tapi

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Societal Environment

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Industry Analysis
(Michael Porter)

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2 4

Being Strategic

WHEN?

WHERE do we want to be

It implies that you know where youre starting from, youre clear on where you want to go, and you have the means and the will to make consistently good and powerful choices about how to get there

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SET of managerial DECISIONS and ACTIONS that determines the longrun PERFORMANCE of an Organization

Strategic Management

PHASES OF STRATEGIC MANAGEMENT

1. BASIC FINANCIAL PLANNING
Budget tahunan, proposal proyek Budget atau rencana jangka panjang (> 1 tahun)

2. FORECAST-BASED PLANNING 3. EXTERNALLY ORIENTED (STRATEGIC) PLANNING

Rencana strategis melibatkan semua level dan mempertimbangkan perubahan lingkungan (pasar & kompetisi) Mengembangkan dan mengintegrasi semua rencana strategis untuk mencapai tujuan utama (objective) organisasi.

4. STRATEGIC MANAGEMENT

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Basic Model of Strategic Management

Four Basic Elements

The Strategic Management Process

Thompson & Martin

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STRATEGIC MANAGEMENT

Wheelen / Hunger

STRATEGIC MANAGEMENT

STRATEGIC ENVIRONMENTAL SCANNING STRATEGIC FORMULATION

STRATEGIC MAPPING (BSC)

STRATEGIC IMPLEMENTATION

STRATEGIC CONTROL

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1. It forms the BASIS of the decisionmaking process. 2. It results in higher organizational PERFORMANCE. 3. It requires that PEOPLE examine and adapt to business environment changes. 4. It coordinates diverse organizational units, helping them FOCUS on organizational goals.

Why Strategic Management Is Important?

CLEARer sense of strategic vision for the firm BENEFITS OF SHARPer focus on what is STRATEGIC strategically important MANAGEMENT IMPROVE understanding of a rapidly changing environment

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TRANSFORMATIONAL PERFORMANCE
VISI BARU PERUSAHAAN SUKSES PERUSAHAAN MASA DEPAN SUKSES PERUSAHAAN MASA LALU

KINERJA

KINERJA LAMA

KINERJA BARU

MASA LALU

SAAT INI

MASA DATANG

SUKSES YG LALU

TRANSFORMASI

SUKSES YAD

Strategic Decision Making

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Strategic Decision Making

The Three Stakeholder Groups

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Stakeholders (Contd)
Classifications of Stakeholders
Capital Market
Expect returns commiserate with risk accepted by investments Higher the dependency relationship, the more direct and significant firms response

Product Market
Customers, suppliers, host communities, unions

Organizational
The employees

MISSION STATEMENT
Before formulating a strategy, managers need to agree on the companys purpose (mission), the internal compass that will guide its actions (values), and its aspiration for future results (vision)

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STRATEGIC PROCESS for a whole company flow out from mission

MISSION Why we exist, our unique purpose as an organization VISION What we look like if we were more fully achieving that purpose: Our hoped-future as a company, fulfilling our mission OBSTACLES What might make it difficult for us to be the company we envision, achieving our purpose STRATEGY: Core directional choices that will best move you toward your hoped-for future (WHAT) TACTICs: Specific actions that will best implement your strategies (HOW)

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VISION & MISSION

MISSION is the purpose or reason for the organizations existence VISION statement describes what the organization would like to become MISSION statement describes what the organization is now.

Being Strategic

WHEN?

WHERE do we want to be

If you dont know where you are going, you are nowhere. You are responsible to give a clear destination of the boat

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COMPANY PROFILING
Type of business Uniqueness Core Competence Positioning Expectation / Target Commitment Value to stakeholder

MISSION
Points to state of Identity Purpose Aims Distinction Product/service Values Prime services Stakeholder Market In short statement

In simplest terms, the mission is the organization's reason for existence, and vision is what it wants to be.

Mission
CCs Roadmap starts with the mission, which is enduring. It declares CC purpose as a company and serves as the standard against which we weigh the actions and decisions.

To refresh the world... To inspire moments of optimism and happiness... To create value and make a difference.

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Coca-Cola Vision Our vision serves as the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable, quality growth. People: Be a great place to work where people are inspired to be the best they can be. Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs. Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value. Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities. Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities. Productivity: Be a highly effective, lean and fast-moving organization.

The Coca-Cola Company Vision To achieve our Mission, we have developed a set of goals, which we will work with our bottlers to deliver: Profit: Maximizing return to shareowners while being mindful of our overall responsibilities. People: Being a great place to work where people are inspired to be the best they can be. Portfolio: Bringing to the world a portfolio of beverage brands that anticipate and satisfy people's desires and needs. Partners: Nurturing a winning network of partners and building mutual loyalty. Planet: Being a responsible global citizen that makes a difference.

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WALT DISNEY
Founded 1923

Disney World's mission:

Disneys main vision:

The Walt Disney Company strives to be one of the worlds leading producers and providers of quality entertainment and information.

Focus vs Do Everything
Walt Disney Company akuisisi ABC network Mengucurkan $750 milion untuk program TV & movies Tahun 2000 meskipun sales naik namun net income turun drastis

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Mission Statement
Effective mission statements commonly clarify the organization's purpose. It often includes the following information: Purpose and aim(s) of the organization The organization's primary stakeholders: clients/customers, shareholders, congregation, etc. How the organization provides value to these stakeholders, for example by offering specific types of products and/or services According to Bart (1997), the commercial mission statement consists of 3 essential components: Key market who is your target client/customer? (generalize if needed) Contribution what product or service do you provide to that client? Distinction what makes your product or service unique, so that the client would choose you?

Mission Statement

McDonalds - "To provide the fast food customer food prepared in the same high-quality manner world-wide that is tasty, reasonably-priced & delivered consistently in a low-key dcor and friendly atmosphere." Key Market: The fast food customer world-wide Contribution: tasty and reasonably-priced food prepared in a high-quality manner Distinction: delivered consistently (world-wide) in a lowkey dcor and friendly atmosphere.

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Products Services

Markets

Customers Technology

Mission Elements
Employees Survival Growth Profit Public Image

Philosophy

Mission Statement
Courtyard by Marriott - "To provide economy and quality minded travelers with a premier, moderate priced lodging facility which is consistently perceived as clean, comfortable, well-maintained, and attractive, staffed by friendly, attentive and efficient people" Key Market: economy and quality minded travelers Contribution: moderate priced lodging Distinction: consistently perceived as clean, comfortable, well-maintained, and attractive, staffed by friendly, attentive and efficient people

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MISSION
"We organize the worlds information and make it universally accessible and useful" (Google) "We inspire and nurture the human spirit one person, one cup, and one neighborhood at a time" (Starbucks) Toyota seeks to create a more prosperous society through automotive manufacturing (Toyota) To Enable People and Businesses Throughout the World to Realize Their Full Potential (Microsoft) "To bring inspiration and innovation to every athlete* in the world Nike (* If you have a body, you are an athlete)

"To provide the fast food customer food prepared in the same high-quality manner world-wide that is tasty, reasonably-priced & delivered consistently in a low-key dcor and friendly atmosphere."

MISSION To continuously Innovate, focusing on Consumers needs, delivering great Brands with unparalleled Performance To deliver quality products which are loved by consumers To continuously improve our people, processes and technologies To contribute to the welfare of the society and environment in a sustainable manner To continuously improve stakeholders value VISION The Leading Consumer Goods Company

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MISI: Kami adalah pembawa perubahan yang menciptakan kemanfaatan bagi masyarakat berdasarkan prinsip saling menumbuhkembangkan melalui pribadipribadi yang unggul, yang saleh dan kompeten VISI Perusahaan makanan dan minuman dua terbaik di Indonesia pada tahun 2015

We shall build good ships here at a profit if we can at a loss if we must but always good ships
Mission-Newport News Shipbuilding (unchanged since 1886)

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Mission Microsoft Indonesia To Enable People and Businesses Throughout Indonesia to Realize Their Full Potential

Vision
To be the Most Admired Company providing Superior Value to Customers, Partners, Employees and support Government in Narrowing Digital Gap

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MISSION
Toyota seeks to create a more prosperous society through automotive manufacturing

VISION
Toyota aims to achieve long-term, stable growth in harmony with the environment, the global economy, the local communities it serves, and its stakeholders

PRIORITAS UTAMA

TALK & ACTION KUNCI PEMBEDA BUDAYA KERJA

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1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.

Basic Concepts in SM Corporate Governance & Social Responsibility Environmental Scanning External scanning Internal Scanning Strategy Formulation: SWOT analysis & Business strategy Strategy Formulation & Creation : Corporate strategy Strategic Planning: Portfolio analysis UTS Strategic Leadership, entrepreneurship & intrapreneurship International strategy Strategy Formulation: Functional strategy Leading Change Strategy Implementation Evaluation & Control Case Study UAS

SM - moduls

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Reference
John Thompson & Frank Martin, 2005. Strategic Management, Awareness and Change, 5th Edition, South-Western Cengage Learning. Thomas l Wheelen & J. David Hunger, 2006. Strategic Management and Business Policy, 10th Edition, Pearson International

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