1 Strategy Set of techniques & tools for leading, managing, coordinating and making decision in times of complexity & change
Organising tools, shared language for analysing and communicating current position of Org
Means of communicating tasks of coordinating complex activities towards the goals of Org
Emergence - Changes in nature of Ownership and management, Changing and gloabliisng market conditions, New Org structures
Org vision and mission statement articulates its strategy, Org performance relative to its strategy is in performance review in Annual Report
Telstra One Factory Approach - Bringing together Operations and Management of IT System, removing duplication and complexity in system. Leadership Leadership = influence process “Follower-ship” different from management “Subordinate-ship”
Power & Influence – Power to change people’s behaviour and Influence to change their preferences
Can be exercised from any level or position within an Org
Capacity to motive and elicit employee commitment
Effective and Forward thinking Accountant Roles in Strategic Leadership
2 External Environment – Analysing an Industry Process includes – definition of ‘Industry’, Life Cycle Stage, Evolution, how factors may change their impact on future growth & profitability, what drives customers demand, Critical Success factors & how competitors compete
Gathering Data – Internet, Public Agencies & Statutory Authorities, Industry Associations, Annual Reports, IPOs, University, Consultancy Firms, Lobbying Orgs., Intelligent Assumptions.
Definition of ‘Industry’ – Group of Business producing close substitutes, Wider definitions minimises risks of missing new trends
Industry Value Chain – comprises business processes, people, organisations, technology and physical infrastructure that transforms raw material into intermediate and finished products / services. Competition at each value chain, Orgs shall know its position in value chain Upstream or Downstream. – New Value is created at each stage of Chain i.e. value created by taking in resources – providing additional inputs or processes that increase the value of those inputs that has greater market value in the next component of chain. Performance measures are – ROI, Debt-Equity Ratio, PE ratio etc. Each value chain has associated costs & risks. Each component of value chain represents an industry in its own right. Global nature – multiple locations & multiple configuration.
Industry Segmentation – broken down into segments. When analysing segment type of information needed includes – segment definition, size, average annual growth, an explanation of data. Product Segmentation – what is offered?, – who it is offered to?.
Industry Life Cycle – Start-up, Growth, Control, Maturity, Shakeout, Decline
Start-up – small industry, many visions, many approaches – this diversity reflects Orgs coming to the industry from different perspectives with different capabilities.
Growth Stage – high growth means most survive, Cash is short – catering to present demand rather than looking for future – competitive differentiation is not important – enough room for every one
Maturity – Growth rates reduces to normal means industry enters to maturity – Org focuses on efficiency, cost control and market segmentation – Strategic Management concepts comes in at this stage.
Shake-out – growth and profitability are flat or decline – some Org withdraw as ROI is unsatisfactory – intense competition makes strategic management more necessary to enable Org to protect their position.
Decline or renewal – every one leaves the industry – product is no longer in demand e.g. abacus industry – here strategic management concepts becomes more important in deciding how to maintain a unique position in a win-lose environment. Business strategy is about being creative – consequently even in mature environment there are opportunities to creates niche or revolutionise industry…