Foundations of Strategy: Ch. 1

1. Foundations of Strategy: Ch. 1 Shea Gordon, Kyle Harris, Bradley Peters, Matthew Powers

2. Lady Gaga • As the music industry changed so did her approach • Ticket sales > CDs • Recognized opportunities in social media • Creative production team “Haus of Gaga” • 360 Deals

3. James Dyson • Initially Trained as a designer at the Royal College of Art • Idea for Bagless Vacuum • Innovation was seen as a danger to the industry • Asian Market • Continued innovations

4. Alex Ferguson 1.Rebuilt scouting 2. Team > Individual 3. Relatively low funds 4. Knowledge of the game Went on to win 12 English Premier league titles

5. The Role of Strategy In Success • Goals that are simple consistent and long term • Profound understanding of the competitive environment • Objective appraisal of resources • Effective implementation

6. Current Event Greg “Ghostcrawler” Street Jumps From Blizzard To Riot Games • Lead Systems Designer for World of Warcraft (mmorpg) • Lead systems Designer for League of Legends (moba) • Profound understanding of the competitive environment • Effective implementation?

7. A Brief History of Strategy • Sun Tzu’s Art of War • 50’s-60’s: Financial Budgeting to Corporate Planning • 70’s-80’s: Strategic Management • 90’s: External to Internal Profit

8. Strategy Today • TMT (technology, media, telecommunications) • Continuous Change • Relentless Competition • CSR • Ethics • Sustainability of Natural Environment

9. Corporate vs. Business Strategy • Overall Objective: How do we make money? Corporate Strategy: • Industry Attractiveness: Which Industries? Business Strategy: • Competitive Advantage: How to Compete? • Concepts used in ISQS 3344- Intro to Productions and Operations Management!

10. Dyson’s Static/Dynamic Strategy Static Strategy: • Where do we want to compete? • How do we compete? Dynamic Strategy: • What do we want to become? • What do we want to achieve? • How will we get there?

11. Intel’s Static/Dynamic Strategy Static Strategy: • Where does Intel compete? • How does Intel compete? Dynamic Strategy: • What does Intel want to become? • What does Intel want to achieve? • How will Intel get there?

12. How is Strategy Made? Design vs. Emergence Strategy is typically viewed as created by rational analysis, but is often the result of adaptation. • Intended Strategy • Realized Strategy • Emergent Strategy

13. Rules of Strategy • Strategy as decision support • Constrains the range of alternatives • “rule of thumb” • Strategy as coordinating device • Communication device • Strategy through goals, commitments and performance • Strategy as a target • Sets aspirations to motivate and inspire • Strategy as animation and orientation • Achieves focus and plan

14. Strategy: in whose interest?Shareholders vs. Stakeholders • Firms create different value for different groups: • Employees • Lenders • Landlords • Government • Owners • Stakeholder approach balances those interests • Shareholder approach values owner’s interests above all

15. Strategy: in whose interest?Shareholders vs. Stakeholders • The companies of English-speaking countries typically act in the interest of shareholders • The companies of Asian and continental European countries act in interest of stakeholders • During the 1990s, ‘Anglo- Saxon’ shareholder capitalism was in the ascendency • During the 21st century, shareholder value maximization started receiving bad perception. • The responsibilities of business to employees, customers, society and the natural environment are central ethical and social issues.

16. Profit and Purpose • Profit maximizations provides convenient foundation for strategy analysis • The world’s most successful companies in terms of profit tend to be those that are motivated by factors other than profit. • Profit is only effective guide to action if managers know what determines profit

17. Examples of Purpose in Successful Organizations • Google • IKEA • SAP • Gaia House (a Buddhist retreat center in England)

18. Discussion What is the purpose of some of your favorite companies? Can you think of any large businesses that are perceived to value profit more than purpose?

19. Corporate Social Responsibility (CSR) • The corporate belief that a company needs to be responsible for its actions – socially, ethically, and environmentally. • UC Berkley • “Firm as property” or “firm as a social entity?”

20. Intel’s CSR • January 27, 2014, Intel ranked first on the Environmental Protection Agency’s Green Power Partnership Top Partner List. • Since 2008, Intel has been the nation's largest voluntary purchaser of green power. • In 2013, Intel increased its purchases of renewable energy to meet 100 percent of its electricity use.

21. Discussion • Is CSR a good thing? • Should a company serve the stockholder or the stakeholder? • “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits…” • Milton Friedman

22. Foundations of Strategy Approach • “The foundations of mainstream strategy lie in analysis of competition and firms’ quests to outperform their rivals.” • Grant, Robert M. (2012-05-01). Foundations of Strategy (Page 34).

23. Four Key Strategy Considerations

24. Strategic Fit

25. Conclusion • Strategy can create successful a performance, both for individuals and for organizations • Strategy origin and how it’s changed over time • Key questions and terminology in strategy • CSR debates • Foundations of Strategy approach

26. Q&A