There is an island of opportunity

in the middle of every difficulty.

Albert Einstein

Chapter One
Leadership, Strategy and

Competitive Advantage

Dr. Jashim U. Ahmed

Strategy
A clear vision of what the
organization will be; based on a
sustainable competitive
advantage; specifying what must
be done and the resources
required.
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Strategy is War!
companies do compete
aggressively - even viciously - for
strategic advantage in a chaotic
arena that is increasingly similar
to the modern theater of war.
Source: E. K. Clemons & J. A. Santamaria,
April 2002, Harvard Business Review
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Strategy Should Include

A Clear

understanding of the Companys

Competitive Advantage
Specific Objectives - Growth and Profits
Products and Services
Markets and Customers
Priority areas of Business
Investment, Organization, Resources
and Skills required
Implementation Plan
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The Five Elements of Strategy

Staging
What will be our speed
and sequence of moves?

Vehicles
How we will get there?

Economic Logic
How will we obtain
our returns?

Arenas
Where will we be active?

Differentiators
How will we win?

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Source: D. C. Hambrick & J. W. Fredrickson, 2001

The Benefits of Strategy

Clarity

of Direction
Rationale for Future Success
Basis for Resource Allocation
Decisions
Basis for Operational Decisions
Identifies Critical Issues
Communication Improved
Common Purpose Amongst
Management

Strategic Management
Something an organization needs or
uses in order to win, or establish its
legitimacy in a world of competitive
rivalry strategy is what makes a
firm unique, a winner, or a survivor.
Howard Thomas, 1993

Levels of Strategy
Corporate Strategy

HQ

- where to invest
- adding value by linking units Corporate Office

Business Strategy
- what we sell to whom
- competitive advantage

Functional strategies

Business Unit Business Unit Business Unit

Power Plant
Hospital
Real Estates

Sales &
Distribution
Marketing

Service

When Do You Need a Strategic

Review
External

Changes

Competitive Changes
Environmental Changes

Internal

Changes

New Ownership
New Technology
New Management Team
Poor Results
Differences in Opinion

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Vision
Vision is simply an inner picture of
something, which has not yet
happened. The vision set by leading
companies on Europe and US
requires the transformational style
adopted so successfully in much
admired companies like Shell,
GlaxoSmithKline and Cisco
Systems. Each began with an idea. A
clear vision.
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Vision & Mission

Vision is a possible and desirable future
state of an organization. Mission is why a
firm exists, its role in life. It is more
associated with behavior and the present.
---A. Campbell and S. Yeung, 1991

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Vision & Competitive Strategy

For commercial companies the
vision statement needs to
define a definite competitive
strategy and the key activities
to be invested in to provide
competitive advantage.

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Compelling Vision Requires Three Components

Sensitivity

to the External Environment

(important because every organization needs to

adapt continuously to its situation).
Formulating

a Compelling Vision

(important because this provides a clear strategy

for leadership).
Persuasively

communicating the Vision

(important because all employees need to be

enrolled in fulfilling the compelling vision).

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Vision
Vision is where tomorrow begins, for
it expresses what you and others who
shares the vision will be working hard
to create. Since most people dont
take the time to think systematically
about the future, those who do - and
who base their strategies and actions
on their visions - have inordinate
power to shape the future.
Burt Nanus
Visionary Leadership

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The Four Parameters of Mission

Purpose
Values
Strategy
Behavior Standards

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Components of A Mission
Statement
Mission statements can and do vary in
length, content, format, and specificity.
Most practitioners and academicians of
strategic management feel that an
effective statement exhibits nine
components. Because a mission
statement is often the most visible and
public part of the strategic management
process.
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F. R. David, 2003.

Nine Components of A Mission

Statement
Customers: Who are the firm's customers?
Products

or Services: What are the firms major

products or services?

Markets:

Geographically, where does the firm

compete?

Technology:

Is the firm technologically current?

Concern

for Survival, Growth and Profitability: Is the

firm committed to growth and financial soundness?

F. R. David, 2003.
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Nine Components of A Mission

Statement (cont.)
Philosophy:

What are the basic beliefs,

values, and ethical priorities of the firm?

Self-concept:

What is the firm's major

competitive advantage?

Concern

for Public Image: Is the firm

responsive to social, community, and
environmental concerns?

Concern

for Employees: Are employees

a valuable asset of the firm?
F. R. David, 2003.
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Long-term Growth in
Shareholder Value

A Mission-Driven Company

A Values-Centered Organization

An Adaptable Business Strategy

W. W. George,
Academy of Management Executive, 2001,
Vol. 15, No. 4, p. 41.
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Why is Vision so Powerful?

The key reason is that it grabs attention.
It provides focus. Every organization
has lots of ways to go. The outside
world pulls it in every direction. Each
has its own attractions. Yet, no
organization can be all things to all
people - not General Motors, not IBM,
not even the United States of America.
Burt Nanus
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Issues for Strategic Management

Where Are We Now?

S.W.O.T analysis

Where Do We Want to Be?

Vision Mission - Goals - Objectives

What is Stopping Us?

Organizational blockages.

What Should We Do?

Strategic action.
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Strategic Thinking Viewpoints

Satisfying Customer Needs:
Customer Segments.
Customer Perceptions.
Unmet Customer needs.
Future Customer Needs.

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Strategic Thinking Viewpoints

Sustaining the Competitive
Advantage:
Competitive Interaction.
Competitors Gaps.
Cost versus Value.
Competitors Reaction.

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Offensive Strategies

Attack Competitors Strengths.

Attack Competitors Weaknesses.
Attack on Many Fronts
Simultaneously.
First-Mover Initiatives.
Guerrilla Attacks.
Pre-Emptive Strikes.

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Strategy Generation Methods

Redefine

Product & Market Scope

Seek Opinions of External Experts
Imitate Competitors
Create Variations on an existing theme.
Differentiate using Competitive Advantage.
Become Lowest cost operator
Focus activities
Change your size
Give best Quality
Use Different types of Portfolio Analysis.
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Strategic Growth Based On

New

Levels of
Services/Product/Distribution
New Technologies
New Applications
Product Performance
Differentiation
Innovation
Distinctive Skills or Resources
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Selections of Strategies
Must

be Imaginative, Practical & Relevant.

High Chance of Achieving Adequate
Results.
Does not Create Excessive Risk.
Uses Organization's Major Strengths.
Corrects or Neutralizes major Weaknesses.
Exploits Major Opportunities
Eliminate or Reduces Major Threats.
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Final Thought
Achieving maximum possible
Differentiation over the Competition
in Meeting Customer Needs.
Source: K. Ohmae

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Thank you

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