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MQM 326

MQM 326. Ch 15 Bringing Discipline to Strategy & Ch 16 Strategic Sourcing. Traditional Approach to Strategy. Assumption 1 An industry exists of a set of unrelated buyers, sellers, substitutes, and competitors that interact at arms length. Traditional Approach to Strategy. Assumption 2

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MQM 326

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  1. MQM 326 Ch 15 Bringing Discipline to Strategy & Ch 16 Strategic Sourcing

  2. Traditional Approach to Strategy • Assumption 1 • An industry exists of a set of unrelated buyers, sellers, substitutes, and competitors that interact at arms length

  3. Traditional Approach to Strategy • Assumption 2 • Wealth will accrue to companies that can erect barriers against competitors and potential entrants (i.e. structural advantage).

  4. Traditional Approach to Strategy • Assumption 3 • Uncertainty is low enough to permit one to make accurate predictions about the participant’s behavior and to choose strategy accordingly

  5. Industry Structure • At least two others are found • Codependent systems • Privileged relationships

  6. Sources of Advantage • Structural Advantage • Frontline Execution • Insight and Foresight

  7. Levels of Uncertainty • Level 1 • Traditional model holds, useful predicitions can be made • Level 2 • Future will follow one of a few of discrete scenarios though it cannot be predicted which one • Level 3 • Continuous uncertainty prevails, Analysis can’t reduce down to limited number • Level 4 • True Ambiguity

  8. A New Definition of Strategy • Strategy is a handful of decisions that drive or shape most of a company’s subsequent actions, are not easily changed once made, and have the greatest impact on whether a company meets its strategic objectives.

  9. Strategic Decisions • Strategic Posture • Adapting • Shaping • Reserving the right to play

  10. Strategic Decisions • Competitive Advantage • Structural Advantage • Frontline Execution • Insight coupled with Foresight

  11. Strategic Decisions • Business Concepts • Big Bets • Real and Financial Options • No-Regrets Moves • Safety Nets

  12. Strategic Decisions • Tailored Value Delivery Systems • Strategies capable of dealing with the complexities of today’s business environment are likely to call for the ability to create, grow, and manage multiple value delivery systems simultaneously.

  13. Evolving Strategy • Traditionally, strategic management has meant little more than staying the course. • Today however, it means actively managing the way strategy unfolds month after month, year after year.

  14. Chapter 16, Strategic Sourcing • Case study, company ARCO Alaska • Consulting firm Booz, Allen

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