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Strategic Diagnosis: Background

Evolution of change Agenda makes it dangerous to base future plans on successful responses to historical challenges There is no single prescription for future success which will apply to all firms. Management confronts two Key Problems

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Strategic Diagnosis: Background

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  1. Evolution of change Agenda makes it dangerous to base future plans on successful responses to historical challenges There is no single prescription for future success which will apply to all firms Management confronts two Key Problems Each Organization needs to diagnose its unique future challenges, threat and opportunities Each firm must design and implement its unique response to these challenges Strategic Diagnosis: Background

  2. A systematic approach to determining the changes that have to be made to a firm’s strategy and its internal capability in order to assure the firm’s success in its future environment Environmental Turbulence is a combined measure of the changeability and predictability of the firm’s environment Complexity Novelty Rate of Change Visibility Strategic Diagnosis: Definition

  3. Strategic Diagnosis: Example Environmental Turbulence Repetitive Expanding Changing Discontinuous Surprising Slow Incremental Fast Incremental Repetitive Predictable Unpredictable Strategic Aggressiveness Stable Anticipatory Entrepreneurial Creative Reactive Responsiveness of Capability Custodial Seeks Familiar Change Strategic Flexible Adapts to Change

  4. How can we systematically “divide” our environment into “workable areas”? How do we make sure that the information we received from the environment involves legitimate (perceived) information? How do we systematically design a competitive organization? How do we interpret qualitative data? Perception vs. Reality for Organizational Leaders Strategic SegmentationStrategic Information ModelCompetitive Positioning Ansoff and McDonnell, 1990 Created by Robert Moussetis, 2000

  5. In which SBAs will the firm do business in the future? What competitive position will the firm occupy in each SBA What competitive strategy will the firm pursue to gain this position SBA Segmentation Dimensions: Need, Customer type, Technology and Geography Characteristics: Growth, Performance (Profitability), Turbulence and Success factors Strategic Resource Area: In the resource based postindustrial universe, managers have to balance what they want to do against what they can do Strategic Influence Groups: Firms increasingly legal and societal pressures - Stakeholder Management SBA:A Strategic Business Area which is a distinct segment of the environment in which a firm does (or may want to do) business SBA SBA SBA1 SBU SBU SBA2 Environment Firm Ansoff and McDonnell, 1990 Created by Robert Moussetis, 2000

  6. CRITICAL MASS CM: INVESTMENT BELOW WHICH A FIRM BECOMES UNPROFITABLE IN AN STRATEGIC BUSINESS AREA Optimal Mass + ROI INVESTMENT IN AN SBA - Critical mass Ansoff and McDonnell, 1990 Created by Robert Moussetis, 2000

  7. ENTRPENEURIAL PLANNING ENVIRONMENT SBA SBA STRATEGIC SEGMENTATION SBA STRATEGIC SUCCESS HYPOTHESIS FIRM’S OBJECTIVES SBA PROSPECTS STRATEGIC DIAGNOSIS SBA ATTRACTIVENESS TARGET COMPATITIVE POSITIONING Degree of Preparedness COMPETITIVE POSTURE IN SBA PORTFOLIO POSTURE Ansoff and McDonnell, 1990 Created by Robert Moussetis, 2000

  8. Power Filter: It is nature for managers and departments, whose power is threatened by discontinuities, to minimize or even refuse to recognize the impact of discontinuity. Mentality Filter: Rejection of novel information and predisposition on success models Strategic and Creative Mentalities focus on Future, Novel and Unfamiliar change Entrepreneurial drive and tolerance of failure Management Information Strategic Information Model Environment Surveillance Filter Data Mentality Filter Power Filter Perception Actions Information Ansoff and McDonnell, 1990 Created by Robert Moussetis, 2000

  9. Estimating SBA attractiveness Global forecast Future Turbulence Historical Trends extrapolated into the future Changes in the historical demand Overall shifts in growth prospects Numerical estimates of Future growth Future shifts in the profitability Boston Consulting Group matrix Competitive Positioning ? High Volume Growth Cash Cows Low Dogs High Low Market Share as a function of leading competitor SBA Attractiveness = a G + b P + g O - d T Ansoff and McDonnell, 1990 Created by Robert Moussetis, 2000

  10. MBA Educational Leadership Biology History Administrative Services Admissions -Registrars -Financial Aid Academic Services Advising - Technology Needs Facilities Buildings and Services Recreational Activities Classrooms and Teaching Domains Example: North Central College • Identify Future Turbulence • Establish Strategic Aggressiveness • Establish Responsiveness of Capability Ansoff and McDonnell, 1990 Created by Robert Moussetis, 2000

  11. STRATEGY(S) CAPABILITY(C) STRATEGIC INVESTMENT(I) GROWTH THRUST (Domain) MARKET POSITION (Domain )MARKET DIFFERENTIATION SERVICE-PRODUCT DIFFERENTITION CRITICAL MASS VERITCAL INTEGRATION MANAGEMENT FINANCE MARKETING R&D PRODUCTION IN STRATEGY IN CAPABILITY IN FACILITIES COMPETITIVE POSTURE IN AN SBA POSTURE=SXCX(I-Icr) Ansoff and McDonnell, 1990 Created by Robert Moussetis, 2000

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