Competence Based Management

• Competence based management focuses on internal capabilities to achieve competitive advantage.

Four Pillars of Competency Based Management

• Dynamic
• Systematic
• Cognitive
• Holistic
• Competitive advantage means holding a favorable market position, yielding more customers and profits.
• Core competency includes a unique combination of resources, knowledge, and skills.

Determinants of Competitive Advantage

• Target Market: Thorough understanding of current and potential customers who might buy from a brand and their desires
• Competition: Identifying current and prospective competitors, and analyzing their strengths, weaknesses and strategies
• Unique Selling Proposition is the chief factor of competitive advantage, differentiating a business from competitors.

Types of Competitive Advantage by Michael Porter

• Cost Leadership: Strategy to produce same quality products as competitors, but sell at a lower price
• Differentiation: Delivering different and better benefits than competitors
• Focus (Segmentation): Targeting a specific, pre-defined market segment

Other Competitive Advantages

• Brand loyalty provides a significant competitive edge.
• "Big Pockets" refers to disrupting the market with substantial funding and enticing offers
• Network Effect increases the value of a service or product as more people use it.
• Barriers to Entry and Competition: Utilizing natural and artificial barriers, like government policies and trademarks.
• Competitive Intelligence (Early Signal Analysis) involves identifying, gathering, evaluating, and disseminating information related to products, customers, and competitors

Objectives of Competitive Intelligence

• To warn of potential risks and opportunities, such as mergers, new products, and services
• To ensure strategic planning decisions rely on current competitive intelligence
• To adapt and respond to changes in the business environment

Competitive Intelligence Process

• Identify the business problem.
• Ascertain competitive data sources.
• Collect and assemble the data.
• Produce actionable intelligence.
• Communicate results and findings to users.
• Communicate information to the strategic planning process.
• Provide response and re-evaluate.
• Core Competency Theory is a strategy to achieve marketplace competitive advantage
• Core Competency was introduced by CK Prahalad and Gary Hamel.

Core Competency Traits

• Difficult to imitate
• Applicable across different markets
• Adds value to customers
• Core competency helps businesses stand out, focuses on key strengths, and ensures long-term success.
• Competence Based Strategy views the business as open, interacting with its environment for resources and outputs
• Knowledge, or the collective learning of an organization, is the basis of core competencies.
• Knowledge and Resource Based Approach concentrates on the supply of competitive advantage from the business itself rather than the industry.

Technology

• Technology Competence refers to effectively using and understanding hardware and software
• Technology competence can improve an organization's product portfolio.

Ways Technology Impacts Products

• New Functions: Creating novel products to enable previously difficult activities for customers
• New Features: Enhancing available products while maintaining fundamental utility
• Superior Dependability: Product dependability becomes a key differentiator
• Reduced Costs: Concentrating on cost reduction as technology matures

Key Differences Between Competitive Advantage and Core Competency

• Competitive advantage is a feature helping a firm outperform rivals; core competence is the set of skills enabling that advantage.
• Competitive advantage doesn't ensure long-term success, while core competence does.
• Core competencies are major sources of competitive advantage.

Strategic Management

• Strategic Management includes a plan to maximizes resource utilization for the benefit of the organization.

Recent Trends in Strategic Management

• Management of strategic change
• Strategic social audit
• Environmental auditing
• Supply chain management (SCM)
• Total quality management
• Corporate social responsibility
• Bench marking
• VMOST analysis
• Strategic leadership
• Organizational (re)design
• Management of Strategic Change involves adapting to internal issues and technological advancements
• Strategic Change involves changes to a firm as indicated by its competitive advantages, scope, synergy, and resource deployments.

Managing Strategic Change (4 Steps)

• Scanning the environment
• Strategy formulation
• Strategy implementation
• Evaluation and control
• Adaption: Gradual change
• Reconstruction: Rapid change
• Evolution: Incremental change over time
• Revolution: Big and rapid transformational change

Key Considerations

• Culture is defined as the attitudes that employees and managers display while conducting business
• Environment impacts organizations
• Social Audit measures and improves an organization's social and ethical performance.
• Social audit focuses on the social impacts while development audits include economic and environmental issues.

Advantages of Social Audit

• Trains community in participatory local planning
• Encourages local democracy and participation
• Benefits disadvantaged groups
• Promotes shared decision making and responsibility
• Develops human resources and social capital

Environmental Auditing

• Environmental Auditing involves a systematic evaluation of organizational systems.

Environmental Audit Phases for Industries

• Activity prior to audit involving information collection
• Evaluation of the information onsite
• Drawing conclusions and improvements post audit

Supply Chain Management (SCM)

• Supply Chain Management involves the management of supply chain operations in ordert maximiz customer value and create a sustainable competitive advantage.

Effective SCM Links

• Involves physical flow, transformation, movement, and storage of goods and materials
• Information flows is how supply chain partners coordinate plans and flow

Total Quality Management (TQM)

• TQM is a participative approach to continually improve an organization.

Key Principles of TQM

• Employee Commitment
• Quality Improvement Culture
• Continuous Process Improvement
• Customer Focus
• Effective Control

Key Steps to TQM

• Ensuring employees understand and commit to TQM policies
• Emphasizing continuous feedback
• Continuous process improvement
• Focus on meeting customer needs
• Prioritizing effective performance monitoring and measurement
• Corporate Social Responsibility (CSR) integrates socially beneficial programs into a business model.

Benefits of CSR

• Prevents financial ramifications
• Increases employee loyalty
• Maintains a positive reputation
• Fosters environmental and social consciousness

Benchmarking

• Benchmarking measures performance against industry leaders to identify needed changes.

Step-by-Step Benchmarking

• Choose a product to benchmark
• Determine best in class business
• Gather metrics within that business
• Compare data and find performance gaps
• Adopt new policies from best performers

VMOST Analysis

• VMOST Analysis maps elements to create effective strategy.
  • Strategic planning
  • Evaluation

VMOST Element Definitions

• Vision: Abstract guiding principle
• Mission: Description of a vision
• Objectives: Measurable aspect of the plan
• Strategic Leadership refers to a manager expressing a vision, motivating others.

Functions of a Strategic Leader

• Setting direction
• Decision making
• Human Capital Management
• Change management
• Communication within the organization
• Developing competencies
• Implementing new policies

Navigator (Strategic Role)

• A navigator identifies the reasons for success and issues and causes
• A strategist looks for new opportunities
• An Entrepreneur takes calculated risk
• A Change Agent implements new change when needed.
• A motivator encourages and develops other talent
• A Captivator motivates passion and dedication.

Organizational Redesign

• Organizational Redesign identifies aspects which may not be working in order to streamline workflow.

Organizational Redesign Benefits

• Excellent customer service
• Increased profitability
• Reduced operating costs
• Improve efficiency
• Improve time

Key Elements of Organizational Design

• Work Specialization
• Departmentalization
• Command Chain
  • Authority
  • Responsibilty
  • Unity of Command.
• Formalization- standardized and guided procedures

Types of Organizational Designs

• Traditional designs
  • Simple Designs
    • Low departmentalization
  • Functional Designs
    • Relatable occupation
  • Divisional Designs
    • Semi autonomous untits or divisions
• Contemporary Design
  • Team structure
  • Matrix Structure
    • Specialist from different functional departments
  • Project Structure
    • Employees who continuously work on projects
  • Autonomous Internal Units
  • Boundaryless organization
    • Not limited by internal or external factors
  • Learning Organization
    • Adapts and changes over time

Competitive Environment Analysis

• Being good is not enough unless the customer thinks the business is good
• Porter's Five Forces Model helps management influence industry by identifying opportunities and threats.
  • New entrants
  • Substitute goods
  • Supplier Bargaining Power
  • Customer Bargaining Power
  • Substitute goods
• Competition Analysis involves investigating players in the industry and their SWOT analysis

Aspects About Competitive Analysis

• Current market postion
• Key indicators in units and dollars
• Market shares of key competitors
• Comparison to other strengths of key competitors

Value Chain Analysis

• Value Chain Analysis is a framework for categorizing value adding activities
  • Inbound logistics: deliver raw products to suppliers
  • Operations: transformation activity which creates product
  • Outbound logistics: transfers products to distribution channels
  • Market/ Sales: this includes sales force issues, pricing, promotion and sales mix
  • Service: Includes adjustment services and customer relationships
• Support Activities
  • Procurement
  • Technology Development
  • Human Resource Management
  • infastructure
  • Procurement: the firm that firms purchasing of material and supplies of its activities
  • Technology Development focusses on improving the processes in primary value-adding activity
  • Human Resources Management- this focuses on hiring, training, compensating, developing, and relations with the firms people
  • Infrastructure- focuses on finance, accounting legal
• A firm can develop competitive advantage by matching strengths with upcoming opportunities

SWOT Matrix

• External SWOT: strengths, weaknesses, opportunities and threats
• Internal SWOT: strength and opportunities S-O Strategies pursue opportunities that are fit to the company strengths
• W-O Strategies can overcome weaknesses to make way for new opportunities
• ST Strategies identify ways that firms can use strengths to reduce vulnerablility
• WT Strategies have a plan in place to prevent weakenesses from making the firm susceptible to threats

BCG Matrix

• This Matrix classifies businesses by market share
• The y axis shows if the market is growing

BCG Elements

• High relative Market Share and High Market Growth Rate indicates a Star
• High relative Market Share and Low Market Growth Rate indicates a Cash Cow
• Low relative Market Share and High Market Growth rate indicates a Question Mark
• Low relative Market Share and Low Market Growth rate indicates a Dog
• Keys to performance indicators is a way to measure the performcane of process and shows the effectiveness.

Any KPI Will Include:

• What is being measured
• Who is measuring it
• The intervals of when the data is being measured

5 P's of Henry Mintzberg

• Henry developed 5 models to plan and implement his strategies.

Mintzenberg Strategizing Approach

• A strategy is what must be considered after only changes will be used to the benefit of the company.

The 5 P's

• Planning
  • Familiar aspect
• Ploy
  • Reliant on peoples actions
• Pattern
  • Derives from accidental discoveires
• Position
  • Refers to environmental orientation within the market
• Perspective
  • Influences ways an organization will be able to do business

Critical Sucess Factor(CSF)

• CSFs are required actions to achieve project missions

Examples of CSF

• Customer Loyalty
• Respond to change
• Understand potential

Process to Achieve Sucess

• Skills
• Communication
• processess

CSFs and Strategic Planning

• Critical points for good mangement

Sources of CSF's

• Industry specific
• Competitors/Industry specific
• Industry postion
• Environmental
• Management specific
• Temporary

Key Result Area (KRA)

• Key Result Area refers to the rules for specific roles in a company