Strategic Management Session 5 PDF

Strategic Management Session 5 How will we win? FHRMBA August 30th, 2024 dr. Boris Blumberg Porter‘s Generic Straegies Cost Leadership Differentation Underlying economic Achieve a given goal with the Maximize the goal at a given principle...

Strategic Management Session 5 How will we win? FHRMBA August 30th, 2024 dr. Boris Blumberg Porter‘s Generic Straegies Cost Leadership Differentation Underlying economic Achieve a given goal with the Maximize the goal at a given principle minimal costs. price (cost) Example Low Cost Carriers Luxury car segment Management principle Operational Excellence Innovation Threats Anorexia Become too product focused Consumer gets used to low and loosing eye for customer prices Stuck in the middle Story: Above average profit Average Below average cost leadership differentiation 0 2 4 6 8 10 12 14 16 18 20 strategy Stuck in the middle Story: Is it true? Above average profit Average Below average cost leadership differentiation 0 2 4 6 8 10 12 14 16 18 20 strategy Break Out Group Meet in the break out rooms and discuss the following questions  Explain to each other where your organization is positioned on the graph.  How is it possible that companies deviate from the Porter curve? Ambidexterity efficiency – flexibility exploration – exploitation adaption – alignment competition - cooperation integration – focus = Conflicting Goals Difficulties exploration exploitation + + self reinforcing patterns of learning (March) ambidexterous organization A: Where should we be on the frontier line? B: How do we reach the frontier line? B exploitation C: How can we move the frontier line A further? C exploration Where is your organization? A B exploitatie C D E F G H exploratie Is ambidexterity important? Metastudy van Junni, Sarala, Tara en Tarba (2013) Many good studies on performance sales growth, innovation, subjective rating, Tobin’s Q, profit, survival firm ρ =.26; business unit ρ =.37; team ρ =.09 services ρ =.32; multi-sector ρ =.29 sector exploration exploitation Food -.01.03 High tech.27.21 Manufacturing.29.34 Services.28.16 Biotech & Pharma.16.07 Computer &.21 -.02 Electronic Metal.46.35  sequential parallel simultanous Offensive and defensive Offensive and Players play well phases alternate defensive players on different positions Different game strategies, different line ups  sequential parallel simultanous Changes in structure and Separation of People decide design (re-organisation) explorative and themselves how to exploitative tasks alloacte time Adoption to the environment between Corporate venturing explorative and exploitative tasks. Requires vison and leadership to mitigate Google 10% sub-group forming Short Organisation Diagnosis I Indicate on a scale from 1-5 to what extend you agree Managers in my organisation… … set challenging / aggresive goals. … issue creative challanges to their people instead of narrowly defining tasks. … make a point of stretching their people. … use business goals and performance measures to run their business. … hold people accountable for their performance. … encourage and reward hard work through incentive compensation. Short Organization Diagnosis II Indicate on a scale from 1 to 5 to what extend you agree. Managers in my organization… … devote considerable effort to developing their subordinates. … pull decisions down to the lowest appropriate level. … have access to the information they need to make good decisions. … quickly replicate ‘best practices’ across organizational boundaries. … treat failure in a good effort as learning opportunity, not as something to be ashamed off. … are willing and able to take prudent risks. creation of an high performance organisatie 7 Country Club Performance 6 High 5 4 Social Average Support 3 2 Low 1 Performance Burnourt 0 1 2 3 4 5 6 7 Performance Measurement creation of an high performance organisatie 7 Country Club Performance 6 High 5 4 Social Average Support 3 2 Low 1 Performance Burnourt 0 1 2 3 4 5 6 7 Performance Measurement Path to ambidexterity LEVERS o Incentive compensation o Risc management o Increase social support o Build trust o Professional development o Knowledge transfer Ambidexterity initiatives drive o Participative strategic planning Use all leadership but types are not leadership Build under- driven. standing at all levels Focus on a few levers Growth Strategies and Engines Classical Growth Strategies Existing markets New Markets Existing Products Penetration Market Development New Products Product Development Diversification Three Growth Engines Sticky Engine Paid Engine Viral Engine long-term customers classical advertising and social network / multi-level subscription models sales marketing acquisition / churn rate Cost per acquisition viral coefficient r > 1 life-time value net promotor score LTV – CPA >> 0