A view from the TopJohn shonkBob OdgersDon Ewalt

StrategyEvolutionStrategy vs. Tactics and the trade

offFocus on value creation and

creating optionsStrategy vs. Alignment

Strategy FormulationCurrent StateWhat are the alternatives?Where do we go?

4+2 To SustainStrategyExecutionCultureStructureSecondary Practices

◦Talent◦Innovation◦Leadership◦Mergers and partnerships

Have a Balanced ScorecardAnswers 4 basic questions

◦How do customers see us?◦At what must we excel?◦Can we continue to improve and

create value?◦How do we look to our companies

shareholders?

What Should The Board Do?

Make knowledgeable its role, agenda, and information

Management performing with integrity

Set the tone and cultureHelp formulate corporate strategyMake sure corporate aspects are

aligned and consistentAssist in understanding expectations

of shareholders and regulators

Globalization12 global trends:

◦ Population trends◦ Urbanization◦ Spread of infectious disease◦ Resource management◦ Environmental degradation◦ Economic integration◦ Knowledge dissemination◦ Information technology◦ Biotechnology◦ Nanotechnology◦ Conflict◦ Governance

Major ImplicationLaws of AbundanceRight locationHighest demand, lowest barriersDifferent value for different

people at different timesSustained valueHuman capital

New LawsSize means scrutinyCutting cost raises compliance riskStrategy must involve society Reducing risks means building trustShareholders = StakeholdersGlobal growth requires gainsProductivity needs sustainabilityDifferentiation depends upon

reputationGovernance needs representation

Analyzing an IndustryWhat is Industry?Profit PotentialIndustry EvolutionAnalyzing IndustryAnalyzing Product/Market Scope

Analyzing your Resource Base

What are Strategic Resources?Forces for Change

Formulating Business Unit Strategy

FoundationStrategy FormulationValue Disciplines

Hypercompetitive Market

-Due to globalization = lots of Rivalry (red oceans)-- how to survive:

Rapid innovation and speed

Superior short term focus

Market awareness

Hypercompetitive Market

1. Innovation: creating value, leveraging core comps. - Sustaining: year to year improvements (Ipods) - Disruptive : imitations, maybe cost less. (cheap MP3s)

2. Speed: responding to current and future business needs.

- Immediate satisfaction (fast pizza, road service) - Industry shifts (technology changes)

Global Strategy

1. Innovation: creating value, leveraging core comps. - Sustaining: year to year improvements (Ipods) - Disruptive : imitations, maybe cost less. (cheap MP3s)

2. Speed: responding to current and future business needs.

- Immediate satisfaction (fast pizza, road service) - Industry shifts (technology changes)

MKT

- changing customer needs

- adapt to regions

- distribution channels

Economic

- logistics

-R&D

-Manufacturing

Competitive

- diversity

- degree of imports/ ex

-interdependence

Governmental

- subsidies

- regulations

- Standards

Global potential

Shaping the portfolio (growing)

Diversificati

on (MKTS)

Merger/ acquisition

Ventures. alliances

Green fielding

Portfolio Management

Portfolio Management

: selection and management of all of an organisation’s projects, programmes and related business-as-usual activities taking into account resource constraintsCorporate Strategy Business Unit STGHow to allocate recourses and macro picture of industry (mission statement)

Defines competitive positions (products)

Establishes Structure and relationships with other business units

How to move to attractive industry segments and grow

Sets targets and goals and how to measure them

How to sustain competitive advantages