Strategic management

Strategic management

Week 2.1

Strategy: plan tan translates mission and vision of the company into measurable actions

Consultant must be a scientist (not magician), use tools based on science, solution has to challenging enough

3 different approaches for strategy: demonstrate the leadership (battlefield), an example for the rest of the soldiers (inspiring), someone eloquent, able to communicate, to motivate, to convince, place and distribute the resources to accomplish the tasks, get the respect to people=classic skills of strategos

Strategy different from strategic management (but connected)

Strategic management: How would you administrate the plan for achieving mission and vision of the company?

Strategy need to work with the context, need to be able, read, understand the context

Importance of strategic plans:

-provides a sense or reason by connecting purposes and actions

-decision making process of managers

-coordinates the resources and the structure of the organization

-can be used as devices of controlling

Strategy as a bridge=value creation🡪 relevant, benefit collective (Who we are, what do we offer, why do we exist)

Have to connect internal factors and resources and external factors and competition => where are we going, what’s the purpose=>how to get there: value creation

Planning pyramid

Mission, values (code of ethics), vision:

Strategic management=objective (qualitative main purpose: what and why? Mid-long-term scope), goal (quantitative: how and when? Mid-short-term scope), strategy (general course and guidance, short phrase without verb)

Tactical planning=programs>project>process (specific course detailing internal and external factors)

Functions planning=actions (sequence operations and detailed events)

=logical, deductive and hierarchical

Down: design/Up: execution

Toyota Example

Typology of strategies: functional, business unit, corporate

Functional: they belong to the low-level management, serves a department inside a SBU (strategic business unit=division=, depends on the SBU and corporate strategies, commonly known as tactical planning or programs

Business unit strategies: they belong to the mid-high-level management, provides direction to a unit or a division, competitive position strategy for the unit, depends on the corporate strategies, controls the functional strategies from its departments (netflix: partnership with studio canal)

Corporate strategies: they belong to the top-level management, provides guidance and control SBU’s and their departments, defines mission, vision, philosophy and values to the firm, sets the overall purposes, objectives and general long-term strategy

Strategy: according to Michael Porter it must answer to

-What is the value proposition and purpose of the firm?

-Where is the organization now?

-Where do you want to take the organization? Where do you want to go in the long-term?

-How to get there?

Value creation: Michael Porter sustains that the main purpose of any manager and organization is to create a distinctive selling proposition for the market; represents the solution we sell to the market, in terms of the functional and emotional attributes; in order to succeed, the firm establish an environment where employees can achieve the goals of the group with the least amount of time, money, and materials

Value creation: value proposition (management), added value (economy), unique selling proposition (marketing)

What’s the solution we offer? 🡪forms (products=tangible asset, services=personal attention, experiences=staging the environment or mood to provide a bundle of products and services) 🡪 JTECH: paging system more efficiency (experience: aims to delight customers)

Week 2.2

“Innovation is to create high-quality experiences that customers will pay for is even more important than goods or service innovation” (Pine and Gilmore, 2014)

Knowledge era and the experience economy: companies must offer memorable transformative events for their customers, through a set of coordinated services, products and environments.

Resources of the experience economy:

• Money
• Work
• Land
• Intellectual (divided in 2 areas human capital and structure capital)

Human capital: knowledge, skills, values, culture and corporate philosophy

Structure capital: systems, programs, patents, licenses, trademarks, software

Enemy of experience economy: commodity= prevailing prices for various coffee offering (they don’t compete with customer commodity; only low-cost), good, service, experience

Progression of economic value

Gauche (haute en bas): differentiated - competitive position - undifferentiated

Ligne bas : Pricing

Droite : relevant to-need of customers-irrelevant to

Haut en bas: Guide transformations – stage expériences- deliver services- make goods- extract commodities

Make goods to guide transformations: customization

Stage experiences to extract commodities: commoditization

Opportunities for value creation

1. Customizing goods (ex: subway) What one dimension of sacrifice
2. Enhancing services (ex: 24/7 support)
3. Charging for experience (ex: paille en bamboo)
4. Fusing digital technology with reality (ex: amazon go with cameras and sensors, tracking customers; or pokemon go)
5. Transformative experiences (ex: education services)

Keys for evolving expériences :

• Mass customization
• Work is theatre
• Authenticity is the new consumer sensibility
• The experience is the marketing
• Charging admission is the economic key

Dra. Marcela Lagardo (activist and researcher), Dra. Gloria Ramirez, Dip. Andrea Hernandez

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