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Benefits of Strategic Thinking and a Strategic Approach to Managing

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INTELLIGENT OPPORTUNISM. THINKING IN TIME. Strategic Thinking ... Intelligent Opportunism (What's there?) Thinking in Time (Past, present, future) ... – PowerPoint PPT presentation

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Title: Benefits of Strategic Thinking and a Strategic Approach to Managing


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Benefits of Strategic Thinking and a
Strategic Approach to Managing
  • Guides entire firm regarding what it is we are
    trying to do and to achieve
  • Makes managers more alert to winds of change,
    new opportunities,and threatening developments
  • Unifies numerous strategy-related decisions and
    organizational efforts
  • Creates a proactive atmosphere
  • Provides basis for competing and achieving
    competitive advantage
  • Helps a Company prepare for the Future !

5
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Management Levels
Skills Needed
Conceptual
Human
Technical
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Managerial Skills
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Managerial Skills
  • Technical Skills
  • The ability to use the procedures, techniques
    and knowledge of a specialised field.
  • Interpersonal Skills
  • The ability to work with, understand, and
    motivate other people as individuals and teams.
  • Conceptual Skills
  • Ability to think analytically and strategically
    and solve complex problems

9
Strategic Thinking Definition
The ability to look at the future of the
organization and focus on key interdependence of
organization and its environment.

10
OShannassy (2005)
  • Strategic thinking is a particular way of solving
    strategic problems and opportunities at the
    individual and institutional level combining
    rational and generative thought processes.

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Strategic Thinking Model(Jeanne Liedtka , 1998)
INTENT FOCUSED
SYSTEMS PERSPECTIVE
STRATEGIC THINKING
INTELLIGENT OPPORTUNISM
THINKING IN TIME
HYPOTHESIS DRIVEN
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Strategic Thinking
  • Systems Perspective (Interconnections)
  • Focus on Intent (Vision and Capabilities)
  • Intelligent Opportunism (Whats there?)
  • Thinking in Time (Past, present, future)
  • Hypothesis driven (If A, then B?)

Adapted from Jeanne Liedtka , Elements of
Strategic Thinking
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J.Liedtka
14
A Framework for Strategic ThinkingThe Role of
Strategy
  • Behind every successful organization , there is a
    strategy

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A Framework for Strategic ThinkingThe Role of
Strategy
A combination of effective strategies and
excellent execution
Strategy
Effective
Ineffective
Long Term Success
Success Unlikely
Excellent
Execution
Maybe successful For a while
Failure
Poor
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Strategic thinking
Seeing a larger picture
Understanding the past
Intuition
Creativity
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Strategic Thinking Levels
  • Individual
  • Organizational

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A Framework of Strategic Thinking
  • Strategic Thinking

Thinking
Planning
Learning
Doing
Strategic Management
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Strategic Thinking Instruments
1- Synergy
2- Product Life Cycle
3- Porters Generic Strategies
4- Industry Ecosystem
21
1- Synergy
1-1 Market synergy 1-2 Cost Synergy 1-3
Technological Synergy 1-4 Management Synergy
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2- The Product Life Cycle
Sales volume (units) And profit
Sales
Profit
Profit area
Loss area
Introduction
Growth
Maturity
Decline
Product life Cycle stages
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Stage pre-commercialization
Strategy Innovate
  • Strategic Concerns
  • Research and develop new
  • products / services
  • Forecast sales and key trends
  • Conduct production and marketing tests
  • Begin to gather and train personal.

24
Stage
Introduction
Strategy Infiltrate
  • Strategic Concerns
  • Build relationships with reliable suppliers
  • Plan financing for negative cash flow period
  • Scale up production and marketing operations
  • Anticipate competition

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Stage Growth
Strategy Advance
Strategic Concerns
  • Research and develop competitive innovations for
    present products
  • Seek economies of scale in production
  • Study competitors
  • Build brand preference and product loyalty.

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Stage Maturity
Strategy Defend
  • Strategic Concerns
  • Cut costs in production and marketing to fight
    declining profit.
  • Consider extending product life cycle via
    reintroduction or product update.
  • Emphasize customer service
  • Tap neglected market segments.

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Stage Decline
Strategy Withdraw
  • Strategic Concerns
  • Scale down production and
  • marketing
  • Trim inventories
  • Reassign personnel
  • Cut promotion costs and compete on the basis of
    price.
  • Plan termination of product or line.

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3-Porters Generic Competitive Strategies
Competitive Advantage
Lower Cost
Uniqueness
Broad
Cost Leadership
Differentiation
Competitive Scope
Focused Differentiation
Narrow
Cost Focus
29
External Environment
  • Remote Environment
  • Economic
  • Social / cultural
  • Political / Legal
  • Technological
  • International

Industry Environment
Potential Entrances
Rivalry
among existing firms
Suppliers
Buyers
Substitutes
  • Operational Environment
  • Customers
  • Competitors
  • Creditors
  • Labor Market
  • Suppliers

Organization
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Potential Entrants
Threat of New Entrants
Industry Competitors Rivalry Among Existing
Firms
Bargaining Power of Suppliers
Buyers
Suppliers
Bargaining Power of Buyers
Threat of Substitute Products or Services
Substitutes
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