THE MIND OF THE

STRATEGIST
THE ART OF JAPANESE BUSINESS

- Presented by :
AUTHOR: KENICHI OHMAE
Ashutosh
 Agenda
 About the Author
 Main Theme
 Structure
 Evaluation
 Key Takeaways
 Questions

 Kenichi Ohmae
 Mr. Strategy

 PhD in Nuclear
Engineering
from MIT

 Founder & MD,
Ohmae &
Associates

 Senior partner in
McKinsey &
Company Inc.-
23 yrs


 Main Theme

How Build Successful Strategies

To Kill
Competition

To WIN
To Make profit
 Revenue(cr)
Can Indian post
be profitable?

• Deficit

• Technology
• structure of the
organization, leadership
and continuity
• Money disorder
• Post Bank
 Indian post can be profitable

 Proper business mindset

 Better logistics handling
 Global business division
 Business post
 Like setting up a bank
 Adequate department’s
land holdings
 Encourage public-private
partnerships
 Takeaways
 The purpose of business strategy is to cause
events to favour your strengths.
 Identify your strengths and build on them.
 Every industry has a key success factor — know
yours.
 Address the problem, not the symptoms.
 Know what separates winners from losers in your
industry and your market.
 Take-Aways
 Analyze potential improvements in terms of
cost, benefit and strategic advantage.
 Keep track of customer and market trends —
even though customers may not
 Know what they want.
 Know the difference between a “business”
and a “product.”
 Think like an entrepreneur, but think.

 Structure
 The Art of Strategic Thinking
 Four Routes
•

 Building Successful Strategies

 The Strategic Triangle

 Modern Strategic Realities
 Strategic Change
 JAPAN – an Insight
Business Strategy based on
:Four Routes
 Focus on Key Success Factors


 Building on Relative Superiority



 Pursing Aggressive Initiatives



 Exploiting Strategic Degrees of Freedom

e y Fa ct or s for su cce ss
d e n t ifyin g t h e a re a s t h a t h o ld ke y t o s u c c e s s

Ap p lyin g t h e rig h t m ix o f re s o u rc e s t o t h e m
creasing ARPU

Ma rke t Dis s e c t io n
rgeted young users as the main target audience initially for the I-Mode phone

Hig h lig h t in g d iffe rn c e s b e t we e n win n e rs a n d lo o s e rs

P based and I mode contrast
 Relative Superiority
 Identify unique product strengths
 Build on strength to develop market
share.
•

•
 Aggressive Initiatives


 Upsetting the key factors of success of the competitor

 Challenge assumptions governing the way of doing
business in the industry
 Gain a novel and Powerful competitive Advantage

-- aggressive overseas expansion drive during

•

1999-2002, in the form of losses

 Strategic Degree of
Freedom
 Exploiting the scope for required
changes
 Deployment of innovations and
alterations.
--I-Mode innovation, connection with NTT
•

•
 The Strategic Triangle

 Consists of the Customer, the company and

competitors
 The company and competitors deliver value
to the customer
 The company and competitors compete on
cost
 The company recognises different customer
segments and determines value for them
 The company recognises the competitors in
each segment and attempts to better its
cost bases on competition
15
 The Strategic Triangle

Customer

Va
l ue

Va
lue
Product/Service Differentiation

Corporation COST Competitor

 The Corporation
•Selectivity and sequencing
 If it can gain decisive edge in one key
function, it will eventually be able to
improve in others
•Make or buy

 Decision for a company to subcontract a

major share of its assembly operations.
•Cost-effectiveness

 1.reducing basic costs

• 2.exercising greater
• 3.sharing certain key functions with a
corporation’s other businesses or even other
 The Competitors
Power of image
•

 When product performance and mode of distribution

are very difficult to distinguish, image may be the
only source of positive differentiation.
•

Capitalizing on profit- and cost

•

structure differences
 the difference in source of profit might be exploited,
from new products sales etc also difference in the
ratio of fixed costs and variable costs can be
exploited strategically

 
The Customer
Clients are the base of any strategy according to
Ohmae.
Segmenting by objectives
•

 The differentiation is done in terms of the different

ways that various customers use a product.
Segmenting by customer coverage
•

 The corporation’s task is to optimize its range of

market coverage, geographically and/ or channel
wise.
--- The Japanese people have a strong love for gadgets. The first
•

adopters of DoCoMo were teenagers and young people and they

acted as catalysts in spreading the phone to the mainstream
market.

•
 Hito-Kane-Mono
•
A favourite phrase of Japanese business planners is hito-kane-
mono, standing for people, money and things. They believe
that streamlined corporate management is achieved when
these three critical resources are in balance without surplus or
waste.


 Cash over and beyond what competent people can

intelligently expend is wasted. Of the three critical
resources, funds should be allocated last.
•

 The corporation should firstly allocate management talent,

based on the available mono (things): plant, machinery,
technology, process know-how and functional strength.

 Once these hito (people) have developed creative and
imaginative ideas to capture the business’s upward
potential, the kane (money) should be given to the specific
ideas and programs generated by the individual managers


Modern Strategic Realities
•

 Understanding the Economic

environment
 Coping with Strategic Change

 Foresighted Decisions

 A Strategic Success Formula.

•

•
 Coping with Strategic
Change
Era of Giant Enterprise
P
P
SMART L DUMB
L
A
A
N

N
T

Analysis Workers
Template Strategy
 Strategic Change
Era of Activated Enterprise

Strategy

Results

Corporation Execution

The Trinity
 Strategic Change
Era of Activated Enterprise
 Features
 Brain – “ Strategy” & Muscle – “ Execution”
• in Organization are properly aligned


 Some Common Characteristics

 Offer Job Security
 Tenure Based Promotion
 Internal Development
 Encourage Employee Participation
 Eg: Toyota, Hitachi

•
 JAPANESE MANAGEMENT
PRACTICES
 in-house training of managers
 consensual and decentralized decision-

making
 extensive use of quality control methods
 carefully codified work standards
 emphasis on creating harmonious
relations among workers
 lifetime employment and seniority-based
compensation

Foresighted Decisions
• Ohmae believes that founders of successful
businesses do not simply gamble.
(1) Clear definition of the business domain.
•

(2) Logical hypothesis based on an extrapolation of

•

forces at work in the business environment.

(3) Focus on a few strategic options, instead of many,
•

open to the business.

(4) The company must pace its strategy and not
•

overreach itself.
(5) Management must be prepared to change the basic
•

direction of the business, if conditions demand it.

Conclusion
Thank You !