Business Transformation: Strategy Levels

Business Transformation Analysis (BTA) Summary - External Scan - MC1 Strategy: Understanding the External Environment

Corporate-Level Strategy

• Establishes an organization's long-term direction
• Defines the organization's purpose through mission, vision, and values
• Addresses geographic scope, product/service diversity, and resource allocation
• An ideal strategy statement includes goals, activity scope, and advantages/capabilities

Business-Level Strategy

• Focuses on how individual businesses compete in their markets
• Also known as "competitive strategy"
• Typically addresses innovation, scale, and response to competitors

Functional-Level Strategy

• Outlines how components effectively deliver corporate/business strategies, in terms of resources, processes, and people
• Success significantly relies on functional-level decisions linked to business-level strategy
• Determines resource allocation

Interconnected Nature of Strategic Issues:

• Strategic Position: Considers external, future, and internal factors
• Strategic Choices: Generates & assesses strategic options
• Making It Happen: Focuses on managing strategy in action

Introducing Three Horizons

• The three horizons framework suggests companies consider themselves as having three types of businesses or activities
• These are defined by their "horizons" in terms of years
• Horizon 1 business is the current core business
• Horizon 2 business consists of emerging activities that should provide new sources of profit
• Horizon 3 possibilities are risky start-ups or research and development projects, nothing is certain
• Managements need to avoid focusing on the short-term issues of their existing activities
• Pushing out Horizon 1 as far as possible while looking to Horizons 2 and 3's uncertainty

Definition of Strategic Direction

• A strategic direction can sometimes be a coherent pattern over time, and set according to long-term objectives
• Usually maximizing profits is the strategic direction, however profits aren't always the applicable direction for private sectors or charity organizations
• Objectives behind the strategic direction need close research

Organizational Relationships

• Organizations involve complex relationships, both internally (people within the company) and externally (suppliers, customers, alliance partners, regulators, and shareholders)
• Strategy is crucially concerned with an organization's external boundaries; what to include and what to keep outside

Key Elements of a Good Strategy

• Managing as well as strategizing

Three Main Levels of Strategies

• Corporate-level strategy is concerned with the overall scope of an organisation
• Also with how value is added to the constituent businesses of the organisational whole
• Business-level strategy is about how the individual businesses compete in their particular markets, also called competitive strategy
• Operational strategies are how the components of an organisation deliver effectively the corporate- and business-level strategies in terms of resources, processes and people

Strategy Statements

• Summarize the organization's strategy, and should be less than 35 words long
• Have three main themes, being fundamental goals that the organisation seeks (vision, mission, objectives), the scope or domain of the organisation's activities, and the particular advantages or capabilities it has to deliver all of these

Definitions of Strategy Terms

• Mission: The central reason of the strategy that keeps the focus ("What business are we in?")
• Vision: Relates to goals and refers to the desired future state ("What do we want to achieve?")
• Objectives: Quantifiable statements of the organization's goals over a period of time ("What do we have to achieve in the coming period?")

PESTEL Model

• Used to analyze Macro-Environment
• Elements:
• P - Politics: The role of the state and other political factors
• E - Economics: Macro-economic factors, like interest rates, exchange rates & economic growth rates
• S - Social: Social elements, such as demographics, wealth distribution, geography & culture
• T - Technology: Technologies, like the internet, nanotechnology & new composite materials
• E - Ecological/Environmental: 'Green' macro-environmental issues, such as pollution, waste & climate change
• L - Legal: Legal aspects, including labour, environmental & consumer regulation, taxation

Change Drivers

• Environmental factors can impact industries and sectors, driving change and impacting the success or failure of strategies when integrated; cause & effect relationships; multiple value drivers, and have long term patterns to estimate life cycle, timing & impact

Forecasting

• Single Point: Confidence about the future
• Range: Less certainty, range of possible outcomes
• Alternative futures: High uncertainty, possible distinct futures

Summary of Chapter 1: Introducing Strategies

• Strategy is about the long-term direction of the organisation
• This definition formed by choices and actions about its resources and scope, in order to create advantageous positions relative to changing environment and stakeholder contexts
• Defining and expressing the purpose of an organization is done through its mission, vision, values, and objectives
• Strategy statements should include an organization's goals, scope of activities, and the advantages or capabilities it brings to achieve these activities
• Corporate-level strategy is concerned with an organisation's overall scope
• Business-level strategy is concerned with how an organisation compete
• Functional strategy is concerned with how corporate- and business-level strategies are actually delivered
• There are three major elements to the Exploring Strategy Framework; understanding the strategic position, making strategic choices for the future, and managing strategy in action
• Strategy work is done by managers throughout an organisation, as well as specialist strategic planners, and external executives such as consultants and investors

Strategy: Context, Process & Lenses

• Research on aspects illustrates how analytical perspectives of economics, sociology and psychology can provide practical insights for strategy issues
• The fundamentals vary by organizational context, for example small business, multinational, or public sector
• Evaluating strategic issues from multiple perspectives will be determined through the strategy lenses of design, experience, variety and discourse

Summary Chapter 2: Macro-environment Analysis

• Environmental influences can be thought of as layers around an organisation, with the outer layer making up the macro-environment
• The middle layer makes up the industry or sector, and the inner layer strategic groups and market segments
• Macro can be analyzed in terms of the PESTEL factors (political, economic, social, technological, ecological and legal)
• Macro-environmental themes can be forecast according to different levels of uncertainty, from single-point, through ranges to multiple-futures
• PESTEL can identify key drivers of change, which managers need to address in their strategic choices
• Alternative outcomes about the future can be constructed according to how the key drivers develop.

Disruptive Digital Technologies

• The top 3 most popular digital technologies are mobile, big data and analytics, APIs and embedded technologies
• New technologies are impacting all industries
• Progress towards enterprise goals can be accelerated by the implementation of digital technologies

Mobile Technology

• Definition: any technology that's "portable"
• Components: portable 2-way communication devices and network technology
• Types of Mobile Networks Over Time:
• 2G (GSM)
• 3G
• 4G (is the current de factor mobile technology)
• 5G
• Benefits of 5G networks: increase in the number of devices that can be connected, higher speed enables the development and use of the Internet of Things (IoT)

Internet of Things (IoT)

• Definition: Connecting any device (with an on/off switch) to the Internet and other connected devices
• Encompasses a network of connected things and people
• Allows data collection and sharing about usage and environment

Benefits of IoT

• Improved productivity
• Efficient operation management
• Better use of resources and assets
• Improved work safety
• Access to real-time information

Data Analytics & AI

• Two interrelated fields
• Data analytics involves collecting and analyzing data from various sources to draw conclusions and make better decisions
• AI leverages machine-learning algorithms to automate decision-making by providing insights that would be difficult to uncover with traditional data
• Benefits are better understanding of customers, optimize operations, and improve products and services

Generative AI

• Definition: AI systems create new information
• Examples: Text (ChatGPT), Images (DALL-E), Music (AIVA), Video (Synthesia), and Code (Tabnine)

Location Detection Applications

• Real time information about device locations (mobile phones, trucks, ships, packages)
• Applications are assisting travel to specific locations; Safety against cargo theft; Reduced administrative burden; Real-time tracking; Driver behaviour tracking

D Printing Applications

• Uses computer-aided design (CAD) to create three-dimensional objects, via a layering method
• Involves layering materials, like plastics, composites, or bio-materials to create objects of range in shape and size
• Benefits include reducing need for spare parts, Flexibility: generates any 3D component, no need for moulds or fixed tooling, Simplicity: of fabrication reduces reducing the time to market

Smart Sensors

• Devices that take information from a physical environment and use embedded software monitor, examine and maintain various systems
• Types are movement, temperature, and humidity sensors
• There are many applications and benefits; Optimize energy usage and Smart farming and predictive maintenance

Application Programming Interface (API) applications

• This is a software intermediary is a software intermediary that allows two applications to talk to each other
• Travel booking sites use APIs to aggregate thousands of flights from other websites and show the cheapest options
• The main benefits are enabling interaction between software applications, simplifying the implementation of new applications, and improve user experience

Blockchain

• A digital ledger of transactions duplicated and distributed across the network of computer systems
• Applications are crypto currencies, and loyalty reward systems (using digital tokens)
• Key benefits are security, greater transparency, and instant traceability

Digital Twin

• This is a virtual mirror of a real-world asset such as a building, factory or machinery
• Main benefits include anticipating potential problems, improvement of production processes, reduction of maintenance costs through preventive tasks, opportunities for continuous improvement

Robotics and RPA

• Robotic Process Automation (RPA) uses automation technologies to mimic back-office tasks
• RPA and Conversational AI make chatbots possible
• Benefits include cost savings by automating everyday tasks, minimize errors, Increase efficiency, employees learning

Augmented & Virtual Reality Applications

• Augmented Reality (AR) adds digital elements to a live view (smartphone camera is needed)
• Virtual Reality (VR) is a computer technology to create simulated environments (VR glasses is needed by the user)
• Key benefits include an active experience, helps understand complex concepts, and expands learning efficiency

Biometric Authentication

• Solutions create a data-generated model that represents the individual
• Model can be based on;
  • Fingerprint
  • Eye
  • Face
• Key benefits include improved security, faster access, and greater convenience

Advanced Human Machine Interfaces (HMI)

• Hardware or software through which an operator interacts with a machine (buttons, keyboards, touchscreens) are examples
• Main benefits are ease of use, track production time, display data, and monitoring inputs and outputs

Impact of Digital Technologies on Industry

• Changing the forces in the industry environment
• Enabling cooperation in the end-to-end value chain
• Driving convergence

How the following are affected;

• Customers: bargaining power Internet provides transparent for customers Customers compare products and features and publish critical reviews

• Suppliers: bargaining power Digital technologies have opened and buyers have more data

• Substitute: products and services Digital technologies enable to create to deliver products and services Travel agencies vs OTAs CDs vs Streaming

• Threat of New Entrants Reduced barrier to market (e-omerce)

• US and Asia products extent to Europe

• retail Amazon enter without phyiscal stores

• Competitive Rivalry Digital have have increased comp. rivalry = price pressure

End to End value chain

• Faming -> orginiation -> primary proce. -> marketing -> retailers

Value chains in value webs

Value webs are networks of enterprises and end users who jointly produce products and services and value webs are a way to provide for customers, by innovated tech

Digitization Blurring Industries

The possibilities opened by digitization enter seemingly unrelated industries, the need to enter new industry to get resources

Industry Types

• Monopoly: Often unique product or service Very high entry barriers Very low competition

• Oligopy Few competitor High entry barriers Varies competition

• Perfect comp Same prodcuts or service Low entry barriers very high competition

Summary Chapter 3: Industry and Sector Analysis

• The environment influence closest to organization, involves, the influence in that location
• Industries and sectors can be analyzed in terms of Porter's five forces (these aspects decide the attractiveness of strategy)
• Industries and sectors are dynamic, and their changes can be analyzed in terms of the industry life cycle comparative five forces radar plots
• Industries, strategic group and market segment analysis, can help identify strategy
• Blue Ocean, is the means of strong strategic forces that can analyzsed in strategy canvas

Value Chain

A generic description of activities of discrete activities to help customers gains

• finding activities for stregth or weaknesses
• looking at comp position of org

Cost Leadership

Cost/ price strictres; analyzing areas that are in focus

• finding potental profit
• making or buying decison
• partnering or decision maing

Summary Chapter 4: Resources and Capabilities Analysis

• Competing in the market, resources and capabilities needs thershold and uniquiness
• Sustain comp advantage, fill vrio
• analyzing capabilities and strengths

Strengths and opporutnies

• analyzing a base of how customers develop, looking at each step
• looking at benchanrning/ comp perfomrence/ looking at outside factors

Tools

• manging and adapting, changing resourses, as enviromentally chnages, and using dynamic means to reconfigure new modiffies
• assessing current state, envions targets
• identifying target
• act as eccelerator

Tactical marketiing and tools

• marketing (process of price, promote)

• marketing tool examples

• social post, weinars

• Demograhic segmentation (divde the marketing based on aspect)

  • age, gender, life cycle

• pysphographics is dividing the market on chars

  • value, desier, state, lifestyle

• Behavioral

• devides actions of the consumer and allows close understanding and experience

Segment the target market

criteria size based on

• differnces, money, access, segment should different

P&L force

• analysis, comp analysis, threats, buyer power and more

What is market

A segment, which shares traits,

• understand audience/ ideal cutomers (find and target)

cSF

• factors helped or prevented by cost or advagente

Strategies and opporuties rbv/ mvb

resources and oppertunies for orginzaition create stratagies for compertieve adfvagnge

• asses what the orginzaition has • The resources & capabilities of an organization contributing to its long-term survival and potentially • to competitive advantage.

Redondant and disctinve stragities

Effect strageeis that will eventurally cause uncertinity on bussinieses

• these aspects will allow orginzational to thrive in a compitetve fasion

Value

That that org will valye and enable oppertunites

• rate resources
• will alloe them to provide oppertunites

Valye system set links, to create what org serves

• it may include comp adnvage

Benmarking/dynamic

• measure best areas to improve aspects
• look at the bigger picture how will capiblies stay relevent

Dev strategies/ capabilteies

A way to build, manage, leverage, capibaliteirs for each step

Swot for business

• can asses and find ways to make orgnizaatinal aspects happen
• SWOT is not used to guide strategy - it is seen as an end in itselfBuild on inform

GPR

Law for proviing guidlines for collection of info

• what, limits
• hpow data can be asses

trademarks and protection

• intellectual, protertion etc

• Digital transformation interal analysis and Key To find way to imrpove that data for business

Strategy analysis

Finding comp and dev a defs

• def the business models Def stratehy for businne ssut
• the impcat of digetal tech on the busienss odel