Outline

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Outline

• Background Strategy - A conceptual framework,
  the big issue is executing strategy
• Strategy Maps The 1st step to executing strategy
  is describing strategy
• Alignment Internal alignment of performance
  drivers with customer value proposition is source
  of competitive advantage
• Cause-effect Strategy is a hypothesis, test it
  out analytically?

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Strategy Execution

• What Less than 10 strategies effectively
  formulated are executed effectively
• Why
• Problem of description
• Lack of understanding 95 of workforce
• Inability to link with budgets 60 of organi
  zations
• Spending less than 1 hour per month discussing
  strategy 85 of executive teams ?

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Strategy A conceptual frameworkV.I.P.

• Creating and sustaining competitive advantage
• Managing Value
• Managing Imitation
• Managing Perimeter
• Strategic positions
• Best products
• Total customer solutions
• Systems Lock-in?

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Value
Customer Willingness To pay
Value captured by customers
Price
Total Value
Value captured by firm
Cost Amount Paid to employees And suppliers
Value captured by suppliers
Suppliers Cost (or Opportunity cost)
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Added Value Two Competitors
Willingness to pay for Harnischfeger crane
7.5 m
Supplier opportunity cost Harnischfeger crane
2 m
Total value created 5.5 m
Harnischfeger Added value 0 mn.
Total value created 5.5 m
Willingness to pay for Kranco crane 7.5 m
Supplier opportunity cost Kranco crane 2 m
Supplier opportunity cost Harnischfeger crane
3 m
Willingness to pay for Harnischfeger crane 9 m
Harnischfeger Added value .5 mn.
Total value created 6 m
Total value created 5.5 m
Willingness to pay for Kranco crane 7.5 m
Supplier opportunity cost Kranco crane 2 m
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Managing Imitation

• Basing value creation on broad range of resources
  capabilities which are imperfectly tradable,
  imitable substitutable, superior fit
• Internal accumulation - combining tradable
  inputs with existing asset stocks and learning by
  doing and not endowment, sharing or acquiring
• Think of 10 RC being imitated to the extent of
  80 Total imitation of ? ?

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Managing Perimeter

• Products
• Geographic territories
• Value chain activities ?

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Describing Strategy
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Describing Strategy
Fiduciary Perspective
Customer Perspective
Internal Perspective
Learning Growth Perspective
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Strategy Maps
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AlignmentDesigning a Strategy Map -gt Balanced
Scorecard

• Are financial objectives clearly defined?
• Is the customer value proposition clearly
  defined?
• Are key business processes aligned with each
  customer value proposition financial
  objectives?
• Are the human capital information capital
  aligned with key business processes?
• Is the organization capital aligned with a
  strategic change agenda? ?

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Building Personal Scorecards

• Cross functional team
• Short duration
• Full time
• Clear deliverables
• Cause and effect tree
• Criteria
• Building team scorecard
• Create linkage to performance appraisal
• Implementation Tool kit ?

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