aglbp

7/29/2019 aglbp

1/207

AGLSTD1DRAFT/18.12.93

AUTOMATED GROUP LEARNING(AGL)

NO. 100 - BUSINESS STRATEGY - 1999

DAILY WORK PACK - PART I(Retained)

Copyright:AVM/RGAB 1993/4No copies of without written permission.

7/29/2019 aglbp

2/207

INTRODUCTION

7/29/2019 aglbp

3/207

7/29/2019 aglbp

4/207

PROGRAM - PART IVERSION A - 2 1/2 DAYS - STARTING IN THE MORNING

Activity Group Day I

INTRODUCTION:

1. Introduction IND 09.00 - 09.15

SG (new)

2. Quiz IND 09.15 - 09.45SG

UNIT I:

3. STUDY: View and SG 09.45 - 10.30Vision Coffee

4. Lecture: MG 10.45 - 11.15

5. Case: IND 11.15 - 12.45Ciba-Geigy A-1 SG

CSGLunch

6. Lecture MG 13.45 - 14.15Ciba Geigy A-1 CSG

UNIT II:

7. Study: Mission IND 14.15 - 15.15SG (new)

Tea8. Lecture MG 15.30 - 16.00

9. Case: IND 16.00 - 1700Ciba-Geigy A- 2 SG

Preparation forDay II IND 20.00 - 21.00

Day II

- Case CSG 0.90 - 09.45

10. Lecture MG 09.45 - 10.15CSG

Coffee11. Summary Lecture MG 10.15 - 11.15

7/29/2019 aglbp

5/207

PROGRAM - PART IVERSION B - 2 DAYS - STARTING IN THE MORNING

Activity Group Day I

INTRODUCTION:

1. Introduction IND 08.00 -08.30

SG (new)

2. Quiz IND 08.30 - 09.00SG

UNIT I:

3. Study: View and IND 09.00 - 10.15

Vision

4. Lecture MG 10.15 - 10.30SG

Coffee5. Case: IND 10.45 - 12.00

Ciba-Geigy A SGCSG

6. Lecture MG 12.00 - 12.30CSG

LunchUNIT II:

7. Study: Mission IND 13.30 - 14.45SG (new)

8. Lecture MG 14.45 - 15.00

9. Case: IND 15.00 - 15.45Ciba-Geigy A SG

Tea- Case CSG 16.00 - 16.45

10. Lecture MG 16.45 - 17.15CSG

11. Summary Lecture MG 17.15 - 18.00

Preparation for IND

Day II SG 20.00 - 22,00

7/29/2019 aglbp

6/207

ASSIGNMENT 1.0 - INTRODUCTION (30 MINUTES)

1.1 SPECIFIC OBJECTIVES

The program is designed to provide managers with the opportunity to achieve adeeper understanding of the new business strategy concepts, terminology,techniques and statements.

This broadening of knowledge, skills and attitudes, will enable them tocapitalise on new business opportunities and to accelerate their professionaldevelopment.

The specific learning objectives are to:

a. Understand strategic language and concepts

b. Use the cycle of VMPA (Vision, Mission, Positioning and Action)

c. Develop confidence in analyzing strategic issues.

d. Relate strategic concepts to current organizational problems

e. Motivate further study in the future

The syllabus of the program includes: the VMPA concept, view and visionanalysis, product/service market arenas, competitive advantage, corporatemission, positioning, segmentation, competitive strategy, product/market strategyand strategic implementation.

1.2 AUTOMATED GROUP LEARNING (AGL)

The AGL method is designed to achieve rapid individual learning using specialmaterial and the stimulus of group activity without a formal teaching. The groupsuse the material to find the answers to all problems and questions. The programprovides the full cycle of pre-learning, learning and learning maintennce activity.

1.3 GROUP ARRANGEMENTS

The work will be done:

a. IND -Individually, orb. SG - Small Group (in small groups of four members which will

change daily), orc. CSG - Combined Small Group (two small groups together), ord. MG - Main Group (for short taped lectures on key learning points

with visual aids).

7/29/2019 aglbp

7/207

1.4 SG - SMALL GROUPS

Group names provided on name lists. Note the name of your SG and thenames of the other members.

1.5 LEARNING MATERIALS

a. Retained by members

Notebook - for recording every key pointWorkpack for Day I with study notes, cases and exercises.Standard course diaryGlossary

b. Used by not retained by members:

Guide - with quiz, case solutions and key learning points

NOTE:

Please use your notebook. You receive all the materials in your SG.Please don't look ahead in the work pack until you are specifically askedto do so!

1.6 METHOD

Try to complete every task in the time allowed. A pattern oflearning methods will be used including:

a. Studyb. Case analysisc. Lecturesd. Quizzese. Learning patternsf. Exercises/minicasesg. Homework readingh. Learning Recall (LRT)

NOTE: There will be a flip chart in then room for you to record CONTINUALLYany suggestions for correcting the learning materials and improving the qualityof the learning environment. This helps you to remove "Learning Blocks".Please use this facility to express your ideas ...

7/29/2019 aglbp

8/207

1.7 LEARNING PATTERNS

INSERT

1.8 INSTRUCTIONS (15 MINUTES)

a. Assemble in SG's to introduce yourself, indicate your past experience infinance and what you hope to contribute to and gain from the course.

b. Complete the registration sheet in the Daily Course Diary.

NOTE: Please check that you have a full set of learning materials now.

7/29/2019 aglbp

9/207

ASSIGNMENT 2.0 - QUIZ (45 MINUTES)

2.1 INSTRUCTIONS SMALL GROUP WORK

(a) Assemble in SG

(b) Answer the quiz of 60 questions; mark your answers a, b, c, or d with a

clear "x" on the special form provided in the course diary

(c) Work as quickly as possible but don't guess - leave blanks

(d) Hand in your answer sheet to the Organizer who will mark it and give youa quantitative measure of your strategic knowledge at the start of thecourse

(e) Reassemble in MG when the bell rings

7/29/2019 aglbp

10/207

UNIT I - VIEW AND VISION

ASSIGNMENT 3.0 - VIEW AND VISION - STUDY (60 MINUTES)

3.1 INSTRUCTIONS - INDIVIDUAL/SG WORK

(a) Assemble in SG

(b) Read the lecture and discuss every issue in SG.

(c) Record the seven most significant issues on the flip chart provided.

(d) Reassemble in MG when the bell rings

NOTE:

Work very quickly. Please use your notebook to record key points and alsoMARK UP the Daily Work Pack as a LEARNING TOOL FOR YOUR SPECIALNEEDS.

Don't look ahead in the workpack until you are specifically asked to do so!

7/29/2019 aglbp

11/207

7/29/2019 aglbp

12/207

ASSIGNMENT 4.0 - LECTURE ON VIEW AND VISION

4.1 METHOD

Read aloud, listen and respond verbally to any questions.

4.2 STRATEGIC QUESTIONS

a. Where are we going to? - Vision, mission, objectives?

b. What may stop us? - External constraints?

c. Are we any good anyway? - Corporate audit?

d. How to choose a strategy? - Portfolio of risk i.e. how confident do we needto be, that our predictions will be valid?

e. How to implement the strategy to ensure success? - How do we structurethe company, motivate our colleagues and evaluate (control) progress?

4.3 CHALLENGES TO TOP MANAGEMENT

a. How to add value to the business? How to optimize performance now andfor the future? How to meet the needs of the stakeholders - shareholders,staff, customers, suppliers, local government and the general public?

Note: All stakeholders want the company to achieve profitability, growth

and survival, for a variety of different reasons i.e. cash flow, security,prestige, taxes, stability, quality, reliability, community economics,employment, welfare costs etc.

b. How to create and retain profitable customers?

c. How to recognize the benefits, costs and penalties of change inanticipatory, reactive and crisis change situations.

d. How to understand the structure of customer needs and identify NOW thecritical five year concerns, because:

1. Technology alone no longer satisfies the customers; it is merely theentrance ticket to the game.

2. Every competitor usually has the same level of technology, and yetour company must distinguish itself.

3. Customer needs must be identified to ensure a quality inproduct/service/design which gets to the market as fast as possible.

7/29/2019 aglbp

13/207

4.4 THE VMPA CONCEPT OF CORPORATE STRATEGY

a. The VPMA concept for developing corporate strategy involves:

V - VISION derived from the CEO's initial PERSPECTIVE for thefuture, leads to comprehensive analysis of COMPETITIVEARENAS and sources of COMPETITIVE ADVANTAGE, toestablish a realistic VIEW of what the future holds. This leads to:

M - MISSION - from which

P - POSITIONING leads to -

A - ACTION by formulating the most appropriate COMPETITIVESTRATEGIES and PRODUCT/MARKET STRATEGIES.

The concept supports the current successful corporate planning system ofany organization, company, group or industry.

b. PERSPECTIVE - CEO's initial subjective/objective perception of thefuture.

c. VISION - A energizing statement, based on a PERSPECTIVE, of what topmanagement wants the company to become. Vision needs: noblepurpose, sense of urgency and clear boundaries.

d. VIEW - A critical view of what the future holds in the for the company, inthe future regulatory, competitive, economic and geo-politicalenvironments in which it must compete. The VIEW, based on careful in-depth analysis of COMPETITIVE ARENAS and sources of COMPETITIVE

ADVANTAGE, leads to MISSION.

e. COMPETITIVE ARENAS - Analysis of the business and geographicarenas, where the company will compete in the future, and the sources ofits competitive advantage.

f. CORPORATE MISSION - A statement of what role the company will seekto play in order to achieve its vision: what needs does it wish to satisfy, inwhich markets, with what products/services, against which competitorsand how to measure success.

g. POSITIONING - What is the minds of the customers. The position that acompany owns in the market place is the net result of the interaction of allthe experiences, beliefs, feelings, knowledge and impressions that themarket has accumulated about the company.

h. COMPETITIVE STRATEGY - A statemetn of how the company intends toachieve a sustainable competitive advantage with a variety of strategicthrusts.

i. PRODUCT/MARKET STRATEGIES - A statement on how to optimizeproduct sales in selected markets by: internal growth or acquisition

growth.

7/29/2019 aglbp

14/207

4.4 PERSPECTIVE

a. CEO's initial subjective/objective idea of the company in the future.

b. Not held down by past practice and "impossible" future goals.

4.5 VISION - CONCEPT

a. A VISION (based upon a PERSPECTIVE) is some idealized goal of whatthe chief executive wants the organization to ACHIEVE in the future. Itmust effectively communicate to the followers:

1. The nature of the present situation and its shortcomings2. The future role of the comoany3. How, when realized, this will remove existing shortcomings and

provide fulfillment of the followers' hopes4. The plans of action for realizing the vision

b. The vision INSPIRES every unit of the organization, by:

1. Creating meaning through communication2. Empowering subordinates with authority3. Credibility and responsibility4. Reinforcing employee success with rewards.

c. Effective visions are:

1. Simple and clear

2. Make sense in the marketplace3. Stable, but constantly challenged4. Preached again and again5. The result of a long process of reshaping and clarification6. Able to INSPIRE people to achieve them with a sense of

URGENCY to act differently.7. Appealing to people's desire to: excel, be useful, be proud of what

they do, and have importance but not merely "to be right".8. Drawing clear boundaries.

7/29/2019 aglbp

15/207

4.6 VISION DEVELOPMENT

a. Corporate planning horizons are seldom (40%) more than five yearsahead but corporate objectives ALWAYS include: profitability, growth andmarket share (survival). VISION is thus critical because it helps toCREATE THE FUTURE.

b. Formulating a Vision for the Company concentrates organizational

energies on a common goal, and yet let opportunities emerge.

c. Vision development requires:

1. Very strong skills in environmental scanning in order to react morequickly to signals of change and to grasp new opportunities

2. Participative strategic management to reduce distance between"thinkers" and "doers"

4.7 VISION STATEMENT

a. A "Vision Statement" clearly communicates the vision to EVERY memberof the organization.

b. An effective vision statement is:

1. Based upon a realistic VIEW of what the future holds.

2. Presenting the idealized goal of what the chief executive wants theorganization to achieve in the future.

3. Able to INSPIRE people to achieve the goals with a sense ofURGENCY to act differently.

4. Appealing to people's desire to: excel, be useful, be proud of whatthey do, and have importance but not merely "to be right".

5. Drawing clear boundaries between what the vision measn anddoes not mean.

b. The VISION statement is part of the VMPA concept which is applicable

both for overall corporate strategy, and for EVERY unit in theorganization.

Note: VISION provides the boundaries for a practical VIEW of the future.View development requires very careful analysis of COMPETITIVEARENAS and COMPETITIVE ADVANTAGES, to ensure that it is realistic.

7/29/2019 aglbp

16/207

4.8 EXHIBIT

THE VISION OF GE

In his 1991 report to shareholders, Jack Welch, the CEO of General Electricdescribes GE's vision as follows:

1. The GE people realize the vital importance of speed of moving quickly in

all activities ranging from the higher inventory turnover, to shorter productdevelopment cycles, to faster response to customer needs. Thisunderstanding of the need for speed and urgency, as an ingredient ofsuccess in the nineties, has led to a vision for the next decade as the"boundary-less" company.

2. This means a company in which suppliers are not outsiders - they becometrusted partners in the total business process. Similarly customers areseen for what they are - the company's life-blood. The company's view ofcustomers' needs, becomes identical with the customers' vision, andevery staff member in the company focusses on satisfying those needs.

3. GE's internal functions also begin to blend together. Engineering does notdesign a new product which they pass over to manufacturing. A teamforms in which engineering, manufacturing, marketing, sales, finance andall other functions participate. Similarly customer service becomes everystaff member's responsibility, as does caring for the environment.

Comments:

a. This picture is inspiring, achievable and can be embraced by all GE's

employees.

b. It also meets the criteria that the CEO and his team must be able toplay an active and constructive role in furthering the movementtowards the vision.

ADD THREE OTHERS

7/29/2019 aglbp

17/207


1. FIRST very briefly SCAN the learning patterns which follow.

2. THEN study each pattern very carefully. Think very CREATIVELY toDIRECTLY relate the old and new IDEAS to your ORGANIZATION ... try

to "HOOK" the new learning into your past EXPERIENCE, IDEAS andPERCEPTIONS ...

3. NOTE that the patterns have been specially designed to STIMULATEboth conscious non-conscious learning ... can you make them work foryou?


(a) Reassemble in SG.

(b) Study the lecture very carefully and record key points in your notebook.

(c) Discuss any outstanding questions in SG.

(d) When the bell rings carry on with the case study which follows.

7/29/2019 aglbp

18/207

ASSIGNMENT 5.0 CASE STUDY - CIBA-GEIGY A (75 MINUTES)

5.1 INSTRUCTIONS

a. General:

CIBA-GEIGY A1 - is a case study; it is the story of a business in words

and figures; the questions are to help you to analyze the problems.

b. Individual and SG work (45 minutes)

Read the case and study it carefully. Analyze all the key problems.Answer all the questions in your notebook and on the SG flip chartprovided.

Discuss all the points together and formulate a specific plan of action; youneed not all agree but you must decide.

c. Combined small group work (30 minutes)

Groups will assemble as follows:

A+D B+E C+F

Groups A, B and C will present the answers to all of the questions on theSG flip chart; they should try to achieve a consensus of the CSG on whathas happened and what should be done.

d. Re-assemble in MG when the bell rings.

7/29/2019 aglbp

19/207

EXHIBIT 1

CIBA-GEIGY A1

QUESTIONS ON THE CASE

1. The main emphasis of the case is the new ALLCOMM organizational unit,but we must first understand the CG background. What is the story of thecase? What are the key issues?

2. Why did CG top management want to change?

3. What was the traditional CG approach to managing services?

4. Which internal services could be externally competitive?

5. Suggest three alternative visions for Allcomm.

6. For Jurg Chresta, design and justify a brief "Vision statement" for Allcommfor the next five years.

7/29/2019 aglbp

20/207

EXHIBIT 2

CIBA-GEIGY A1

INSERT CASE***

7/29/2019 aglbp

21/207

UNIT II - MISSION

ASSIGNMENT 7.0 - MISSION - STUDY (75 MINUTES)7.1 INSTRUCTIONS - INDIVIDUAL/SG WORK

(a) Reassemble in new SG


(c) Record seven significant points on the flip chart provided.


7/29/2019 aglbp

22/207

ASSIGNMENT 8.0 - LECTURE ON MISSION8.1 METHOD

Read aloud, listen and respond verbally to any questions.

8.2 VMPA CONCEPT OF CORPORATE STRATEGY


V - VISION derived from the CEO's initial PERSPECTIVE for thefuture, leads to comprehensive analysis of COMPETITIVEARENAS and sources of COMPETITIVE ADVANTAGE, toestablish a realistic VIEW of what the future holds. This leads to:





8.2 MISSION - CONCEPT

a. The MISSION satisfies a need experienced by a group of customers, by

supplying a product which is mix of goods and services, in an industrywith a number of known competitors.

b. Corporate mission development starts with analysis of the business fromnarrow to broader lines:

Narrow lines Broader lines

Oil EnergyBanking Financial ServicesLocks Security & access systems

Movie theater EntertainmentAirlines CommunicationsCarpets Floor coverings

b. Only when we ask "what business are we in?" can we figure out who ourcustomers and competitors are. The question of what business are we inforces the business to consider the:

1. Customers it wants to serve2. Competitors it must confront3. Resources it needs to master in order to ensure excellence

7/29/2019 aglbp

23/207

c. In achieving customer satisfaction, remember that:

1. We have to satisfy the needs and wants of all participants in theentire distribution chain

2. Any conflicts in the chain create hurdles to customer satisfaction

3. We must also identify future needs

4. We must compare all our findings with: previous performance, keycompetitors' performance, and industry benchmarks.

8.4 MISSION DEVELOPMENT

a. To moved from vision to mission requires analysis of many factorsincluding: all the diferent environments, present performance compared toour competition, key success determinants, competitive arenas andadvantage.

b. Environment - what are the anticipated regulatory, competitive, economicand geo-political environments in which the company must compete?Environmental/Industry analysis concerns: new entrants, suppliers, buyersand substitutes.

c. Performance - corporate analysis must determine:

1. What is our current performance level?2. What has been our strategy?3. What are our assets and skills?

4. What are our weaknesses?5. What are the organization characteristics - structure, people, culture,

systems - that affect strategy?6. What is our existing business portfolio? What level of investment in

various product markets?7. What are our strategic problems, constraints and questions?8. What are our strengths and weaknesses relative to each strategic

group of competitors?

d. Key success determinants - what the company must be sure to do, and howthis varies by market segment, location, customer or other key factors. How

these determinants constrain, and also encourage, certain strategy options,and what trade-offs are feasible.

7/29/2019 aglbp

24/207

8.5 COMPETITIVE ARENAS AND ADVANTAGE

a. Understanding competitor's strategy, strengths and weaknesses, willidentify opportunities and threats that require response.

b. Insights into future competitor strategies help to predict newopportunities and threats. The ability to forecast likely key competitorreactions is critical in selecting a strategy. Competitor analysis

identifies strategic questions that need to be monitored over time.

c. Product life cycles are becoming shorter. Skill life cycles arebecoming longer. Competitiveness depends more on skills andservices than on products. Need to emphasize which skills,capabilities and technologies to build up, rather than which markets toenter with which products.

d. Competitive advantage must be worked on all the time because:

1. Unprecedented global competition

2. Demographic change3. Shorter response times4. Accelerated technological change5. Deregulation6. Cooperative links between government and private enterprise in

many countries7. Takeover threats8. Continually changing customer needs and desires

8.6 SUSTAINABLE COMPETITIVE ADVANTAGE

a. For competitive advantage to be sustainable, depends upon:

1. The way we compete - strategy for products, positioning, pricingand manufacturing.

2. The basis of competition - skills and assets

3. Where we compete - selection of markets that value the strategy

4. Who we compete against - selection of competitors

b. A sustainable competitive advantage must be substantial enough tomake a difference, sustainable against environmental change andcompetitor action, and be capable of being developed into visiblebusiness attributes that successfully influence customers.

7/29/2019 aglbp

25/207

8.7 MISSION STATEMENT

a. An effective mission statement must clearly define:

1. How the vision will be achieved

2. Target market

3. Key competitors

4. Specific consumer needs to be met

5. The mix of products/services

6. How success will be measured

b. Only when we ask "what business are we in?" can we figure out whoour customers and competitors are, and thus develope a meaningfulmission statement.

7/29/2019 aglbp

26/207

8.8 EXHIBIT

Sample brief mission statements

INSERT AVM

7/29/2019 aglbp

27/207


1. FIRST ...scan ...

2. THEN ... study CREATIVELY ...

3. Can you make them work for you?


(a) Reassemble in SG

(b) Study the lecture carefully

(c) Record key points in your notebook

(d) Discuss outstanding questions

(e) When the bell rings, carry on with the case study which follows

7/29/2019 aglbp

28/207

ASSIGNMENT 9.0 - CASE: CIBA-GEIGY A2(90 MINUTES)

9.1 INSTRUCTIONS

a. In SG study the case carefully and answer all the questions in yournotebook and on the SG flipchart (45 minutes)

b. Work in CSG as follows:

A + E B + F C + D

with groups D, E, F responsible for the CSG discussion (45 minutes)

c. Reassemble in MG when the bell rings

7/29/2019 aglbp

29/207

EXHIBIT 1

CIBA-GEIGY A2


1. Review the case again in relation to the vision statement which follows.

Evaluate the vision statement in relation to what the future holds forAllcomm.

2. Discuss alternative product/service market arenas for Allcomm.

3. Identify Allcomm's competitive advantages/disadvantages.

4. What is the best pace of change for Allcomm?

5. For Jurg Chresta, design and justify a brief "Allcomm Corporate MissionStatement" for the next five years.

7/29/2019 aglbp

30/207

EXHIBIT 2

CIBA-GEIGY A2

ALLCOMM VISION STATEMENT FOR THE NEXT FIVE YEARS

Allcomm can be a leading profitable communications center serving awide variety of clients apart from CG.

Allcomm can provide customers with a state-of-the-art solutions andservices to all their international communication challenges.

Allcomm can be a company with an exciting and stimulating workplacewith employees becoming shareholders.

EXHIBIT 3

CASE - CIBA-GEIGY A2

*** See UNIT I.

7/29/2019 aglbp

31/207

ASSIGNMENT 11.0 - SUMMARY LECTURE FOR PART 1

11.1 OBJECTIVES







11.2 CHALLENGES TO TOP MANAGEMENT

a. How to add value to the business? How to optimize performance now andfor the future? How to meet the needs of the stakeholders - shareholders,staff, customers, suppliers and general public? How to create and retainprofitable customers?

b. How to recognize the benefits, costs and penalties of change inanticipatory, reactive and crisis change situations.

c. How to understand the structure of customer needs and identify NOW the

critical five year concerns, because:

1. Technology alone no longer satisfies the customers; it is merely theentrance ticket to the game.

2. Every competitor has the same level of technology, and yet ourcompany must distinguish itself.

3. Customer needs must be identified to ensure a quality inproduct/service/design which gets to the market as fast as possible.

Note: All stakeholders want the company to achieve profitability, growthand survival, for a variety of different reasons i.e. cash flow, security,prestige, taxes, stability, quality, reliability, community economics,employment, welfare costs etc.

7/29/2019 aglbp

32/207



V - VISION derived from the CEO's initial PERSPECTIVE for thefuture, leads to comprehensive analysis of COMPETITIVEARENAS and sources of COMPETITIVE ADVANTAGE, to

establish a realistic VIEW of what the future holds. This leads to:





b. PERSPECTIVE - CEO's initial subjective/objective perception of thefuture.

c. VISION - A energizing statement, based on a PERSPECTIVE, of what topmanagement wants the company to become. Vision needs: noblepurpose, sense of urgency and clear boundaries.

d. VIEW - A critical view of what the future holds in the for the company, inthe future regulatory, competitive, economic and geo-politicalenvironments in which it must compete. The VIEW, based on careful in-

depth analysis of COMPETITIVE ARENAS and sources of COMPETITIVEADVANTAGE, leads to MISSION.

e. COMPETITIVE ARENAS - Analysis of the business and geographicarenas, where the company will compete in the future, and the sources ofits competitive advantage.

f. CORPORATE MISSION - A statement of what role the company will seekto play in order to achieve its vision: what needs does it wish to satisfy, inwhich markets, with what products/services, against which competitorsand how to measure success.

g. POSITIONING - What is the minds of the customers. The position that acompany owns in the market place is the net result of the interaction of allthe experiences, beliefs, feelings, knowledge and impressions that themarket has accumulated about the company.

h. COMPETITIVE STRATEGY - A statemetn of how the company intends toachieve a sustainable competitive advantage with a variety of strategicthrusts.

i. PRODUCT/MARKET STRATEGIES - A statement on how to optimize

product sales in selected markets by: internal growth or acquisitiongrowth.

7/29/2019 aglbp

33/207

11.4 VISION - CONCEPT

a. A VISION (based upon a CEO PERSPECTIVE) is some idealized goal ofwhat the chief executive wants the organization to ACHIEVE in the future.It must effectively communicate to the followers:

1. The nature of the present situation and its shortcomings2. The future role of the comoany

3. How, when realized, this will remove existing shortcomings andprovide fulfillment of the followers' hopes

4. The plans of action for realizing the vision

b. The vision INSPIRES every unit of the organization, by:

1. Creating meaning through communication2. Empowering subordinates with authority3. Credibility and responsibility4. Reinforcing employee success with rewards.


a. A "Vision Statement" clearly communicates the vision to to EVERYmember of the organization.



2. Presenting the idealized goal of what the chief executive wants the

organization to achieve in the future.

3. Able to INSPIRE people to achieve them with a sense ofURGENCY to act differently.

4. Appealing to people's desire to: excel, be useful, be proud of whatthey do, and have importance but not merely "to be right".

5. Drawing clear boundaries between, what it is and what it is not.

b. The VISION statement is part of the VMPA concept which is applicableboth for overall corporate strategy, and for EVERY unit in the organization

c. VISION provides the boundaries for a practical VIEW of the future. Viewdevelopment requires very careful analysis of COMPETITIVE ARENASand COMPETITIVE ADVANTAGES, to ensure that it is realistic.

7/29/2019 aglbp

34/207

11.7 MISSION - CONCEPT

a. The MISSION satisfies a need experienced by customers, by supplying aproduct which is mix of goods and services, in an industry with a numberof known competitors.

b. Corporate mission development starts with analysis of the business fromnarrow to broader lines:

c. Only when we ask "what business are we in?" can we figure out who ourcustomers and competitors are. The question of what business are we inforces the business to consider the:

1. Customers it wants to serve2. Competitors it must confront3. Resources it needs to master in order to ensure excellence

11.8 COMPETITIVE ARENAS AND ADVANTAGE

a. Understanding competitor strategy, strengths and weaknesses, willidentify opportunities and threats that require response.

b. Insights into future competitor strategies helps to predict newopportunities and threats. The ability to forecast likely key competitorreactions is critical in selecting a strategy. Competitor analysis identifiesstrategic questions that be monitored over time.

c. Product life cycles are becoming shorter. Skill life cycles are becominglonger. Competitiveness depends more on skills and services than onproducts. Need to emphasize which skills, capabilities and technologies to

build up, rather than which markets to enter with which products.

d. Competitive advantage must be worked on all the time.

e. A sustainable competitive advantage must be substantial enough to make adifference, sustainable against environmental change and competitoraction, and be capable of being developed into visible business attributesthat influence customers.

7/29/2019 aglbp

35/207


a. An effective mission statements must clearly define:


2. Target market

3. Key competitors




b. Only when we ask "what business are we in?" can we figure out whoour customers and competitors are, and thus develope a meaningful

mission statement.

11.10 CONCLUSIONS

a. The concept of WPMA can support a variety of strategic planningsystems.

b. VPMA is effective both at a departmental level and for the companyas a whole.

c. Every manager must be inspired by the VPMA process, not just thefinancial controller.

7/29/2019 aglbp

36/207


1. FIRST ... .

2. THEN ... study .. CREATIVELY ...

3. Could you make them work for you?

7/29/2019 aglbp

37/207

11.12 INSTRUCTIONS (20 minutes)

a. Reassemble in SG

b. Review the Summary Lecture for Part I and discuss questionsarising

c. To get the best out of Part II of the program, try to complete ALL

of the following homework tonight:

1. Read the articles on corporate strategy

2. In your diary review the glossary and complete the learningsummary sheet for each day with as much useful data aspossible,

3. Do the optional minicase exercises in the diary and check theanswers

4. Review your notes for Part I of the course and list outstandingquestions to be resolved in Part II

Note of appreciation

Thank you for working so hard today.

We hope the AGL experience is rewarding for you.

From tomorrow ... it's downhill all the way ... !!

(if you do your all the preparation work)

7/29/2019 aglbp

38/207

15.12.93AGL NO. 100 - BUSINESS STRATEGY - 1999

A 2/3 DAY TRAINING PROGRAM FOR MANAGERS AND DIRECTORS

BRIEF BROCHURE

PROGRAM:The program is designed to provide managers and directors with the opportunity to

achieve a deeper understanding of the new business strategy concepts,terminology, techniques and statements.

This broadening of knowledge, skills and attitudes, will enable them to capitalise onnew business opportunities and to accelerate their professional development.

SPECIFIC OBJECTIVES:The specific learning objectives are to:

a. Understand strategic language and conceptsb. Use the cycle of VMPA (Vision, Mission, Positioning and Action)

c. Develop confidence in analyzing strategic issues.d. Relate strategic concepts to current organizational problemse. Motivate further study in the future

SYLLABUS:The syllabus of the program includes: the VMPA concept, view and visionanalysis, product/service market arenas, competitive advantage, corporatemission, positioning, segmentation, competitive strategy, product/market strategyand strategic implementation.

METHOD:

The AGL method is designed to achieve rapid individual learning using specialmaterial and the stimulus of group activity without formal teaching. The groupsuse the material to find the answers to all problems and questions. The programprovides the full cycle of pre-learning, learning and learning maintenance activity.

TIME:Two days or three days.

FACULTY:Professor Andre van de Merwe of the IMD (Lausanne) and Dr. Bob Boland of theEuropean Institute (Geneva).

FURTHER INFORMATION:Fax 33-50-40-89-82 or 41-21-803-3929.

7/29/2019 aglbp

39/207

AGLSTD2DRAFT 18.12.93

AUTOMATED GROUP LEARNING(AGL)

NO. 100 - BUSINESS STRATEGY - 1999

DAILY WORK PACK - PART II(Retained)

Copyright:

AVM/RGAB 1993/4No copies of without written permission.

PROGRAM - PART IIVERSION A - 2 1/2 DAYS - STARTING IN THE MORNING

Activity Group Day II

UNIT III1. Review/Quiz SG (new) 11.00 - 11.30

2. Study:Positioning IND 11.30 - 12.30SG Lunch3. Lecture MG 13.30 - 14.00

7/29/2019 aglbp

40/207

SG4. Case: IND 14.00 - 15.15Ciba-Geigy B1 SGCSG

Tea5. Lecture MG 15.30 - 16.00CSG6. Case: IND 16.00 - 16.15

Bill Brown SG

Case:Bill Brown SG 16.15 - 16.30

UNIT IV:7. Study- Action IND 16.30 - 17.00SG (new)

8. Lecture -

Action MG 17.00 - 17.30

Preparation for INDDay 3 SG 20.00 - 21.00

Day III9. Case: IND 09.00 - 10.30Ciba-Geigy B2 SGCSG

Coffee10. Lecture: MG 10.45 - 11.30CSG

11. Quiz IND 11.30 - 12.1512. Summary Lecture MG 12.15 - 13.00

7/29/2019 aglbp

41/207

PROGRAM - PART IIVERSION B - 2 DAYS - STARTING IN THE MORNING

Activity Group Day IIUNIT III:1. Review/Quiz SG (new) 08.00 - 08.45

2. Study:Positioning IND

SG 08.45 - 10.00

3. Lecture MG 10.00 - 10.30SG

Coffee4. Case: IND 10.45 - 11.45Ciba-Geigy B1 SGCSG

5. Lecture MG 11.45 - 12.15

CSG

6. Case: IND 12.15 - 12.30Bill Brown SG

Lunch- Case:Bill Brown SG 13.30 - 13.45

UNIT IV:7. Study - Action IND 13.45 - 14.15SG

8. Lecture MG 14.15 - 14.45SG

9. Case: IND 14.45 - 15.30Ciba-Geigy B2 SG

- Case: CSG 15.30 - 16.00Tea

10. Lecture: MG 16.15 - 16.45CSG

11. Quiz IND 16.45 - 17.3012. Summary Lecture MG 17.30 - 18.00

7/29/2019 aglbp

42/207

UNIT IV - POSITIONING & COMPETITIVE STRATEGY

ASSIGNMENT 1.0 REVIEW AND SHORT QUIZ(30 MINUTES)

1.1 INSTRUCTIONS

(a) Assemble in new SG

(b) Discuss outstanding questions from Part I

(c) Do the short quiz which follows. Work on each question individually andthen compare answers in SG

(d) When all answers have been completed, check with the correct solutionand discuss points arising


7/29/2019 aglbp

43/207

ASSIGNMENT1.0 - SHORT QUIZ - QUESTIONS

1. Hewlett Packard Mission Statement

To let HP growth be limited only by the profit and the ability to develop and producetechnical products that satisfy real customer needs.

HP does not believe that large size is important for its own sake, but continuous

growth is necessary for at least two reasons:

a. Firstly HP serves a rapidly growing and expanding segment of the technologicalsociety. The company cannot maintain a position of strength andleadership in its field without growth.

b. Secondly, growth is important in order to attract and hold high calibrepeople. Such individuals will only align their future with a companythat offers them considerable opportunities for personal progress.These opportunities are greater and more challenging in a growingcompany.

Question: How effective is this as a mission statement or perhaps as a visionstatement?

2. Domino Pizza Mission Statement

Through continuous innovation and doing unto others what we want them to do to us,we will attain:

Customers' belief that we are the best place to shop for their needs.Team members who cannot think of a better company to work for.Community and governments that consider us a fine example of what business should

be.Patent company proud to have us as part of their team.Suppliers excited enough to call us their favorite account.

... resulting in constant improvement in those key operations which are so vital for oursuc

cess.


3. Twenty Questions - following

7/29/2019 aglbp

44/207

ASSIGNMENT 1.0. - SHORT QUIZ - QUESTIONS

Twenty Questions

1. Overall cost leadership, differentiation and focus, are all part of:

a. visionb. product/market strategy

c. positioningd. competitive strategy

2. STRATEGIES that concentrate on existing markets, new market development,new product development, innovation based on existing resources, buying directcompetitors, joint ventures, vertical integration, buying synergistic businessesetc. are ALL:

a. product/market strategiesb. competitive strategiesc. corporate missions

d. marketing strategies

3. In practice corporate stakeholders are mainly:

a. shareholdersb. all of these and more partiesc. banksd. workers and management

4. The VMPA concept stands for:

a. vision, mission, people, actionb. view, mission, propositioning, actionc. vision, mission, positioning, actiond. vision, mission position, alternatives

5. The part of corporate strategy which deals with what the future holds, anticipatedregulatory, competitive, economic and geo-political environments in which thecompany must compete, is called a:

a. studyb. mission

c. researchd. view

7/29/2019 aglbp

45/207

6. Questions such as: Where are we going to? What may stop us?Are we any good anyway? How to choose a strategy? How to implement thestrategy to ensure success? are essentially ... questions.

a. marketingb. strategicc. philosophicald. financial

7. In 1993, top management must begin to consider the critical five year issues,because:

a. Technology alone no longer satisfies the customers; it is merely theentrance ticket to the game.

b. Every competitor has a different level of technology, and yet mustdistinguish itself.

c. Every customer's needs must be identified to ensure a quality inproduct/service/design which gets to the every part of the market as fast aspossible.

d. Product life cycles are longer.

8. A strategic vision has all of these steps EXCEPT:

a. Controlling employee successb. Empowering subordinates with authorityc. Credibility and responsibilityd. Creating meaning through technology

9. In formulating a Vision flexible companies do NOT need:

a. Very strong skills in environmental scanning.b. Quick reaction to signals of changec. Ability to grasp new opportunitiesd. Strong strategic management that separates the "thinkers" from the "doers"

10. Identifying competitive arenas, and sources of competitive advantage, leads todevelopment of corporate:

a. healthb. missionc. positioning

d. vision

7/29/2019 aglbp

46/207

11. Positioning enables development of the:

a. visionb. missionc. competitive strategyd. emotional satisfaction

12. A statement of what role the company will seek to play in order to achieve its

vision: what needs does it wish to satisfy in which markets with whatproducts/services against which competitors and how will it measure its success,is a corporate:

a. visionb. missionc. product/market strategyd. competitive strategy

13. Which of the following is NOT part of competitive strategy?

a. achieving sustainable competitive advantage.b. overall cost leadership.c. product/market strategyd. segmentation

14. Consumer analysis involves all of the following EXCEPT:

a. segmentationb. customer motivationc. unmet customer needsd. advertising effectiveness

15. The process of dividing a market up on the basis of similar characteristics so thatinvestment can be made where it will be most effective in establishing acompetitive advantage, is:

a. positioningb. segmentationc. competitive strategyd. corporate mission

7/29/2019 aglbp

47/207

16. A profound understanding of customers needs, usually comes from:

a. market analysisb. market segmentationc. target selectiond. marketing mix

17. A competitive strategy involving: special product line, target to a special market

segment or limitation to a specific geographical area. etc is known as strategic:

a. positioningb. focusc. competitivenessd. planning

18. A competitive strategy involving: experience curve payoffs, no-frills products,product special design, raw-material sourcing, low-cost distribution, loweringlabor costs, government subsidies, location changes, production innovations,buying competitors, automation, reducing overheads etc. is usually:

a. profitableb. unprofitablec. low cost strategic thrustd. racist

19. The most critical part of competitive analysis is usually:

a. visionb. missionc. competitive arena selection

d. positioning

20. Product/market strategies from internal growth use current competencies toachieve low risk steady growth, by concentration on current business with singlemarket/technology activity. The result is usually:

a. moderate risk; slow growth; narrow range of investment options; normalprofit.

b. low risk; slow growth; high profit.c. low risk; slow growth; low profit.d. high risk for R&D and pre-marketing cost; very high initial profits; difficult to

achieve long-term success.

7/29/2019 aglbp

48/207

ASSIGNMENT 1.0 - ANSWERS TO SHORT QUIZ

1. Hewlett Packard Mission Statement


1. It is not a vision statement because: there is no "noble purpose" to inspirethe staff and no common achievable objective.

2. It is not a mission statement because: it has no defined target market, andno defined specific needs to be met with a mix of product/service againstknown competitors.

3. This is a broad statement of intent which is unfocussed and uninspiring.

2. Domino Pizza Mission Statement


1. This is not a mission statement but a good vision statement. It shows whatthe company wants to be in the future. It is inspiring and has a noblepurpose.

2. However it gives no clear definition of what DP must do, to have aworthwhile future.

3. Twenty Questions

dabcd baadb

cbcdb abcca

7/29/2019 aglbp

49/207

ASSIGNMENT 2.0 STUDY - POSITIONING AND COMPETITIVE STRATEGY(60 MINUTES)

2.1 INSTRUCTIONS

(a) Assemble in SG




7/29/2019 aglbp

50/207

ASSIGNMENT 3.0 - LECTURE - POSITIONING



V - VISION derived from the CEO's initial PERSPECTIVE for thefuture, leads to comprehensive analysis of COMPETITIVE

ARENAS and sources of COMPETITIVE ADVANTAGE, toestablish a realistic VIEW of what the future holds. This leads to:




The concept supports the current successful corporate planning system of

any organization, company, group or industry.

3.2 POSITIONING - CONCEPT

a. Positioning is a strategic issue - it is the first element of any marketingstrategy aimed at a target market.

b. Positioning is a strategic statement about how the company/brand wantsto be "seen" on the market place. Based on a "vision" of what thecompany wants to be and how it wants to be perceived by its stake

holders, it guides the development and execution of the total marketingstrategy.

3.3 PRODUCT DEVELOPMENT

a. Product development has a great influence on sales volume and profit,and is vital for the growth of the firm.

Products move through a cycle in their popularity and profitability,introduction, growth, maturity, saturation and decline.

A continuing flow of new products is needed to perpetuate profits, with asound product policy planned several years in advance.

Anticipating future market demands is a vitally important aspect of productdevelopment.

7/29/2019 aglbp

51/207

b Product policy involves attention to: market segmentation productdifferentiation, product-line simplification, product-line diversification,planned obsolescence, forecasting market trends, new-productintroduction.

Note: A product can be a physical product or a service or somecombination of the two, to form a "hard/soft" total product. In 1999 moreand more originally physical products, can only be successful as part of

an integrated "product/service"

c. Differentiation goes hand in hand with positioning. Differentiating aproduct, service or brand is making it different. Positioning is ensuring thata product, service or brand "owns" a specific spot in the market.

d. The attributes of product/service "reputation" are: quality of management,products and services innovativeness, long (not short) term investmentvalue financial soundness, and the ability to attract and develop suitablestaff.

3.4 POSITIONING IN THE MINDS OF CUSTOMERS

a. Positioning is what is in the minds of customers; it is based on perception.

b. The position a corporation "owns" in the marketplace is the net result ofthe interaction of all the experiences, beliefs, feelings, knowledge andimpressions that the market has accumulated about that company.

c. Your position in the minds of your customers is strong if they:

1. Understand what makes your product or service special2. Understand your product or service well enough to describe it

clearly3. Value your brand so much that they are willing to pay more for

whatever makes it special4. Feel so strongly about your brand that they will defend it - even at

a higher price - when it comes under attack

7/29/2019 aglbp

52/207

3.5 POSITIONING - DEVELOPMENT

a. Successful positioning is:

1. Unique and distinctive2. Relevant to a given target audience3. Profitable relative to objectives4. Credible because it's executable

5. Transferable globally

b. The challenge is to keep on positioning your company (and its products)in such a way that they always hold in your target customers' minds, therewhere they expect the ideal to be.

c. The ultimate object of positioning is to make your market feel no one elsecan be a completely satisfactory substitute for them.

d. To qualify as having a position, a brand, product or service must thereforehave three characteristics; it must be widely recognized by people who

use it; it must be preferred by a significant target group over competingproducts; it must have a sense of uniqueness so that it is difficult to copy

e. Product complexities make it easier to make products different.But if thedifference doesn't exist in the customers mind it doesn't exist.

f. When positioning is poor the product/service is:

Pushed into head-on competitionPushed where no one else wanted to beOutdated

Out of line with strategyFuzzy - uncertainor even - NO POSITION - no one has heard of the product/service.

7/29/2019 aglbp

53/207

3.6 POSITIONING STATEMENT

a. An effective positioning statements involves:

1. Presenting a meaningful theme.

2. Meeting customer beliefs about what the company can and cannotdo.

3. Being realistically achievable in relation to company capabilities.

4. Helping long term performance goals.

5. Showing company products/services as unique and superior to thecompetition.

6. Making it difficult for competitors to match or exceed the positioningin the minds of the customers.

b. Overall criterium for effectiveness is: does it generate enthusiasm andcommitment within the organization? Examples: AVIS, British Airways andSAAB

3.7 PRODUCT/MARKET STRATEGIES

a. How to compete with products/services in markets, by:

1. Concentrating on existing markets/products

2. New market/product development3. Innovation based on existing resources4. Buying direct competitors5. Vertical integration6. Buying synergistic businesses

b. Product/market risk will be discussed later.

7/29/2019 aglbp

54/207

3.8 COMPETITIVE STRATEGY

a. Competitive strategy involves how the company intends to achieve asustainable competitive advantage in its chosen product markets, with avariety of strategic thrusts, which may be:

1. Focus2. Overall cost leadership

3. Product differentiation4. Defensive5. Synergistic6. Broad competitive scope7. Pre-emptive

See the Exhibit for alternative strategies in more detail.

b. Competitive strategy must seek a sustainable competitive advantage,which is substantial enough to

1. Make a difference2. Sustain against environmental change and competitor action3. Develop into visible business attributes that influence customers.

c. Smaller companies often succeed with a competitive strategy that has anarrower scope (focus)

3.8 KEYS TO COMPETITIVE STRATEGY

a. Synergy - Some commonality of operations such as:

Distribution, image and its impact on the market, sales and advertisingeffort, plant usage, R&D effort, operating costs, raw materials purchasingetc.

b. Differentiation - in:

Product quality i.e. performance, durability, conformance, features, name,reliability, serviceability, finish etc. or

Service quality i.e. tangibles, reliability, responsiveness, competence,credibility, empathy, courtesy, communication etc.

7/29/2019 aglbp

55/207

3.9 COMPETITIVE STRATEGY STATEMENTS

a. An effective competitive strategy statement must cover:

l. Products/services2. Market segmentation3. Customers4. Competitive advantage

5. Costs6. Structure

b. Examples in Exhibit.

7/29/2019 aglbp

56/207

EXHIBIT 1ALTERNATIVE COMPETITIVE STRATEGIES

The variety of strategic thrusts includes: focus, overall cost leadership, productdifferentiation, defensive, synergistic, competitive scope, pre-emptive moves.

1. Focus:

Special product line, target to a special market segment, limit to a specificgeographical area, focus on cost leadership and/or differentiation ofproducts/services in a narrow market.

2. Overall cost leadership:

With lower costs than rivals, experience curve payoffs, no-frills product,

product special design, raw-material sourcing, low-cost distribution,lowering labor costs, government subsidies, location changes, productioninnovations, buying competitors, automation, reducing overheads etc.

3. Product differentiation:

a. Product quality - performance, durability, conformance, features,name, reliability, serviceability, fit and finish

b. Service quality - tangibles, reliability, responsiveness, competence,credibility, empathy, courtesy, communication

c. Product delivery - of something the market thinks is important andunique

7/29/2019 aglbp

57/207

EXHIBIT 1ALTERNATIVE COMPETITIVE STRATEGIES

(continued)

4. Defensive:

Divest, retrench (to reduce break-even point), or liquidate to be better able

to defend in the product/markets where business continues.

6. Synergistic - with commonality in operations for: distribution, image andmarket impact, sales and advertising effort, plant usage, R&D effort,operating costs, raw material purchasing, and up-stream purchasing,which will either lead to lower cost per unit or increased revenue per unitsold.

7. Competitive scope - how to narrow or broaden the scope ofproduct/market operations.

8. Pre-emptive - with:

a. Supply systems - secure access to raw materials, preemptproduction equipment, dominate supply logistics.

b. Product - preempt a position, develop a dominate design, secure

superior development personnel.

c. Production systems - develop production processes, expandcapacity, integrate vertically.

d. Customers - train customers in usage, get customers to make longterm commitment, gain specialized knowledge of a customer set.

e. Distribution and service systems - occupy prime locations,mdominate key distributors or outlets.

7/29/2019 aglbp

58/207

EXHIBIT 2NOTE ON PRODUCT LIFE

CYCLES

The product life cycle is a strategic tool with five phases: introduction, growth, maturity,saturation and decline. Each phase has special characteristics.

INTRODUCTORY PHASE:

Market Minimum awareness, expensive R & D, advertising, testing

Innovation Consistently launches new innovationsMarketing EnterEmphasis Create market primary demandDiffusion InnovatorsR & D Advanced research patents

GROWTH PHASE:

Market Customer take-off, profit, expansion, real growth, competition

Innovation Wait, follow, improveMarketing PenetrateEmphasis Grow demand, create market shareDiffusion Early adoptersR & D Product development

MATURITY PHASE:

Market Buyers decreased or static market share, profitability down,competition discounts, more advertising, introduction substitutes

Innovation Find niche emerged or untouched. Improve price and performanceMarketing MaintainEmphasis Differentiate, segmentation, revitalize, maintain market & share

Diffusion Early acceptorsR & D Technical service

7/29/2019 aglbp

59/207

EXHIBIT 2NOTE ON PRODUCT LIFE

CYCLES(continued)

SATURATION PHASE:

Market Profitability low, replacements, older market, substitutes,eroding market

Innovation Substitutes availableMarketing HarvestEmphasis nilDiffusion Late acceptorsR & D Technical services

DECLINE PHASE:Market Market disappears

Innovation nilMarketing DivestEmphasis nilDiffusion LaggardR & D nil

7/29/2019 aglbp

60/207


1. FIRST very briefly ... SCAN the learning patterns which follow.

2. THEN ... study them carefully ... try very CREATIVELY to RELATEthem to your own experience, problems and environment ... try to

achieve a NEW PERCEPTION of strategic problems ... directlyrelated to your own organizational unit ...

3. NOTE that the patterns have been specially designed to STIMULATEboth conscious non-conscious learning ... can you make them workfor you?



(b) Study the lecture carefully and record key points in your notebook

(c) Discuss outstanding questions

(d) When the bell rings continue with the case study which follows.

7/29/2019 aglbp

61/207

ASSIGNMENT 4.0 CASE - CIBA-GEIGY B1 (60 MINUTES)

4.1 INSTRUCTIONS


(b) Study the case and answer all the questions in your notebook and on

the SG flipchart (30 minutes)

(c) Then work in CSG as follows:

A + D B + E C + F

with groups A, B, and C responsible for the CSG discussion


7/29/2019 aglbp

62/207

EXHIBIT 1

CIBA-GEIGY B1


1. Study the story of the case and identify the key points arising.

2. Evaluate the Corporate Mission Statement.

3. How should Alcomm position itself?

4. What are some of the paradoxes that Allcomm has to manage?

5. Design and justify a "Competitive Strategy Statement" for Allcomm.

7/29/2019 aglbp

63/207

EXHIBIT 2CIBA-GEIGY B

BRIEF ALLCOMM CORPORATE MISSION STATEMENT FOR THE NEXT FIVEYEARS

a. Allcomm will satisfy the total communication needs of CG companiesas well as non-competitive other corporations, in all fields whereAllcomm perceives itself to have existing or potential expertise.

b. Allcomm will compete against advertising and communicationagencies worldwide.

c. Allcomm will measure success by achieving acceptable profitabilitybefore the CG subsidy lapses, and by whether the contribution of nonCG companies to Allcomm's overall profit is increasing.

d. In this process Allcomm will retain and extend its CG business.

EXHIBIT 3

CIBA-GEIGY B*** insert case

7/29/2019 aglbp

64/207

ASSIGNMENT 6.0 - BILL BROWN (30 MINUTES)

6.1 INSTRUCTIONS


(b) Study the case and individually answer all the questions (on the

worksheet in the diary)

(c) Compare your answers in SG

(d) When the bell rings, stop for lunch!

(e) After lunch, check with the correct solutions and discuss outstandingquestions

EXHIBIT 1

BILL BROWN - QUESTIONS - MINICASES

Bill Brown is a consultant in corporate strategy, faced with the problems outlinedin the six minicases which follow.

For efficient and effective learning from each minicase:

1. Work individually to analyze the issues and record a decision in your notebook.

2. Then discuss in SG and record your consensus on the flip chart (EI -emotional investment).

3. Then check with the answer which follows and give yourself a score out of10. Record the total score out of 60, in the diary.

7/29/2019 aglbp

65/207

EXHIBIT 2 BILL BROWN

1. GM's Mission Statement

GM is a highly integrated business which is primarily involved in the manufactureand the sale of automobiles and trucks, and also of related parts andaccessories, classified as automotive products.

GM products are mostly marketed through jobbers, distributors and retail dealersin the USA and Canada. Overseas marketing is through distributors and dealers.

GM Acceptance Corporation and its subsidiaries offer financial services andcertain types of automobile insurance to dealers and customers. This is done toassist in the merchandising of GM products.

Question: What does this mission statement do? What does it fail to do?

2. Avis

"Avis is the only the number 2 in car rentals. Why should you see us? We tryharder."

Question: Is this a successful positioning statement? Why?

3. British Airways

"The world's favorite airline."


4. SAAB

"You have a heart, a mind and a conscience - so should your car."


7/29/2019 aglbp

66/207

EXHIBIT 2BILL BROWN

5. Identify the company stakeholders? Why do they all want the company toachieve profitability, growth and survival?

6.

7.

7/29/2019 aglbp

67/207

EXHIBIT 4

BILL BROWN - ANSWERS

1. GM's Mission Statement

Question: What does this mission statement do? What does it fail to do?Answers ...

a. The mission statement does:

State the products but only in an unfocussed way.

Specific how the products are to be marketed, at least though channels andgeographic markets.

b. The statement fails to:

Define customer needs it seeks to satisfy in which target markets.

Describe the competitors to be faced.

Set objectives, methodology and criteria to measure success.

c. Overall it is an unfocussed statement which will NOT of any great strategichelp.

2. Avis

Question: Is this a successful positioning statement? Why? Answers ...

This is successful because it:

Takes the customers into Avis's confidence

Is believable.Generates enthusiasm and competitive spirit amongst Avis staff.Cannot easily be usurped by competitors in the minds of customers.

7/29/2019 aglbp

68/207

EXHIBIT 4


3. British Airways


BA used its size as a positive element. In service industries "size" is oftenequated with "less efficient and less caring"

BA promotional literature emphasized that BA was very "customer caring", andbecause of this it was the "World's favorite airline", and therefore successful.

4. SAAB


SAAB expands on this to tie the:

"heart-phase" to SAAB's thirty years successful rally heritage.

"mind-phase" to the computerized use of road and driving data during useto achieve optimum performance.

"conscience-phase" to relate to the SAAB environmentally friendly air-conditioning, emission filtering and general operational effectiveness.

All of this is linked to the similarity of a person to a car in that both need a healthybalance.

This attempts to ensure that SAAB is seen as a unique an successful luxury car,which not only appeals to the discriminent motorist, but in the process becomesan integral part of his successful life.

7/29/2019 aglbp

69/207

EXHIBIT 4


5. Company stakeholders

Stakeholder Objectives

Shareholders share value increaseWorkers improved payroll and employment

security/safetySuppliers low credit risk and profitable supplyCustomers stable product quality and supplyLocal government increased local taxes and lower local

unemploymentBanks better loan securityEnvironmental NGO's more environmental responsibility

6.

7.

7/29/2019 aglbp

70/207

UNIT IV - ACTION

ASSIGNMENT 7.0 STUDY - ACTION(60 MINUTES)

7.1 INSTRUCTIONS - INDIVIDUAL/SG WORK

(a) Assemble in new SG




7/29/2019 aglbp

71/207

ASSIGNMENT 8.0 - LECTURE - ACTION(60 Minutes)



V - VISION derived from the CEO's initial PERSPECTIVE for the future, leads to

comprehensive analysis of COMPETITIVE ARENAS and sourcesof COMPETITIVE ADVANTAGE, to establish a realistic VIEW ofwhat the future holds. This leads to:




b. The concept supports the current successful corporate planning system ofany organization, company, group or industry.

8.2 OVERALL CORPORATE STRATEGY

a. Corporate strategies focus on what business the company should beinvolved with, and how its priorities and resources should be allocated.Business level strategies focus on how a business unit or division of acompany chooses to compete in an industry.

b. Overall corporate strategy is derived from three key elements:

1. Positioning2. Competitive strategies3. Product/market strategies

c. POSITIONING shows how the company/brand wants to be "seen" on themarket place.

d. COMPETITIVE STRATEGY shows how the company intends to achieve asustainable competitive advantage in its chosen product/markets.

d. PRODUCT/MARKET STRATEGY defines markets, products andservices, and the means to develop them.

7/29/2019 aglbp

72/207

8.3 POSITIONING

a. Positioning is a strategic issue - it is the first element of any marketingstrategy aimed at a target market.

b. Positioning is a strategic statement about how the company/brand wantsto be "seen" on the market place. Based on a "vision" of what thecompany wants to be and how it wants to be perceived by its stake

holders, it guides the development and execution of the total marketingstrategy.


a. Such strategies deal with how to compete with products/services inmarkets by:

1. Concentrating on existing markets/products2. New market/product development

3. Innovation based on existing resources4. Buying direct competitors5. Vertical integration6. Buying synergistic businesses

b. Product/market risk evaluation is critical.

8.5 COMPETITIVE STRATEGIES

a. Effective competitive strategies must cover:

l. Products/services2. Market segmentation3. Customers4. Competitive advantage5. Costs6. Structure

b. Competitive strategy must seek a sustainable competitive advantage,which is substantial enough to make a difference.

7/29/2019 aglbp

73/207

8.6 ALTERNATIVE CORPORATE STRATEGIES

a. Three major alternatives:

1. Continue current operations in present markets2. Develop new markets3. Develop new products for present markets

b. See Exhibit for detail.

8.7 MANAGING STRATEGIC CHANGE

a. Task of adjusting the business to emerging opportunities and problems.Necessary tostopdeteriorationor capitalizeon new

opportunities.

b. The time needed to implement different competitive strategies, as well astheir pay-off time, will vary extensively. The change process takes time asit must work through the various categories of employees.

c. Providing solutions means getting people to work effectively in teams. Theteam becomes the core value-creating unit: it has to be chosen, evaluatedand rewarded accordingly.

d. Solution providers need time with customers. This has to be taken into

account in pricing strategies. Flexible pricing i.e. bundling and unbundling,gives firms the options they need to provide different customers withindividualized solutions.

8.8 STRATEGY IMPLEMENTATION

a. Highly social activity, since we have to work though people.

b. Highly emotional activity, since we are changing people's behavior andvalue systems.

c. Current problems of implementation:

1. Took longer that anticipated2. Major unforseen problems arose3. Coordination of implementation not efficient enough4. Other activities and crises prevent management from putting

decision into effect5. Inadequate employee competence and ability6. Training and instructions for lower management levels not

adequate.

d. Why do some strategies fail?

7/29/2019 aglbp

74/207

EXHIBIT1

ALTERNATIVE CVORPORATE STRATEGIES

1. Continue current operations:

Selling present products/services in present markets, but with improved

production, marketing and financial control systems; improve consumeranalysis and services to cover full cycle of consumer activity needs frompurchase to disposal.

2. Develop new markets:

Selling present products in new markets. Specific options:

1. Open additional geographical markets, by regional, national andinternational expansion.

2. Attract other market segments, by developing new appealingproduct versions, causing other distribution channels and promotingthough other media.

3. Develop new products for present markets:

1. New product features:

Adapt to other ideas and developments

Modify i.e. change shape, color, motion, sound, smell etc.

Magnify i,e, longer, thicker, extra valueReduce i.e. shorter, thinner, lighter

Substitute i.e. other ingredients, processes, powerRearrange with other patterns, payouts, sequences, components

Reverse i.e. inside out

Combine i.e. blend, alloy, ensemble, combine units, purposes, appeals, ideas etc.

2. New quality variations

3. Product proliferation with additional models/sizes.

4. Creative ideas please ... innovation, buying direct competitors, verticalintegration, buying synergistic businesses ... ???

7/29/2019 aglbp

75/207


1. FIRST ... scan ...

2. THEN ... study ...

3. Can you make them work for you?



(b) Study the lecture carefully and record key points in your notebook

(c) Discuss outstanding questions

(d) When the bell rings, carry on with the case study which follows

7/29/2019 aglbp

76/207

ASSIGNMENT 9.0 CASE - CIBA-GEIGY B2 (75 MINUTES)

9.1 INSTRUCTIONS


(b) Study the case carefully and answer all the questions in your notebook and on

the SG flipchart (45 minutes)

(c) Work in CSG as follows:

A + E, B + F, C + D

with groups D, E, F responsible for the CSG.D, E, F represent the Allcomm

A, B, C represent the CG


7/29/2019 aglbp

77/207

EXHIBIT 1

CIBA-GEIGY B2


1. Study again the full case carefully to understand the story behind the figures.What new perceptions/ideas do you now have about the case?

2. Evaluate the Competitive Strategy Statement.

3. Criticize the product/market strategy adopted by Allcomm.

4. What are the success factors that have contributed to the Allcomm changeprocess?

5. What are the challenges that Allcomm now faces?

NOTE: Remember to answer every question as fully as you can ...

7/29/2019 aglbp

78/207

EXHIBIT 2

CIBA-GEIGY B2

ALLCOMM COMPETITIVE STRATEGY STATEMENT STRATEGY

a. Allcomm must use its existing strengths to compete in the market place, byusing product/service differentiation, as a key competitive strategy.

b. This will enable delivery of services to CG in a way that is unique. Naturallyfor the CG market, Allcomm will focus on the each company in such away that Alllcom is regarded as particularly qualified to handle CGcompany problems.

c. For both markets, CG and outside, Allcomm has to provide a broad serviceoffering i.e. the complete competitive scope has to be extensive.

d. All of this is vital, if Allcomm is to fulfill the vision and mission statementsof being a total international communications agency.

EXHIBIT 2

CIBA-GEIGY B2

***insert case

7/29/2019 aglbp

79/207

11.0 - QUIZ (45 MINUTES)

11.1 INSTRUCTIONS


(b) Do the quiz of 60 questions on the answer sheet in the diary

(c) Check your answer with the organizer and resolve outstanding questions

(d) Complete the first feedback form in the course diary and give it to the organizer.


7/29/2019 aglbp

80/207

12.0 ASSIGNMENT - SUMMARY LECTURE FOR PART II(30 MINUTES)

12.1 OBJECTIVES







12.2 WORK COMPLETED

I VisionII MissionMinicasesIII Positioning & competitive strategiesIV Action & product/market strategies



V - VISION derived from the CEO's initial PERSPECTIVE for the future, leads tocomprehensive analysis of COMPETITIVE ARENAS and sourcesof COMPETITIVE ADVANTAGE, to establish a realistic VIEW ofwhat the future holds. This leads to:




The concept supports the current corporate planning system of anyorganization, company, group or industry.


V - VISION derived from a VIEW of what the future holds, leading identification ofCOMPETITIVE ARENAS and sources of COMPETITIVE

ADVANTAGE, leading to:



7/29/2019 aglbp

81/207

A - ACTION with a COMPETITIVE STRATEGIES and PRODUCT/MARKETSTRATEGIES.

b. The concept supports the current successful corporate planning system of anyorganization, company, group or industry.

7/29/2019 aglbp

82/207


a. A "Vision Statement" clearly communicates the vision to EVERY member of theorganization.



2. Presenting the idealized goal of what the chief executive wants the organizationto achieve in the future.

3. Able to INSPIRE people to achieve them with a sense of URGENCY to actdifferently.

4. Appealing to people's desire to: excel, be useful, be proud of what they do, andhave importance but not merely "to be right".

5. Drawing clear boundaries.

b. The VISION statement is part of the VMPA concept which is applicable both foroverall corporate strategy, and for EVERY unit in the organization


a. An effective mission statements must clearly define:


2. Target market

3. Key competitors




b. Only when we ask "what business are we in?" can we figure out who ourcustomers and competitors are, and thus develop a meaningfulmission statement.

7/29/2019 aglbp

83/207

12.5 POSITIONING STATEMENT

a. An effective positioning statements involves:

1. Presenting a meaningful theme.

2. Meeting customer beliefs about what the company can and cannot do.

3. Being realistically achievable in relation to company capabilities.

4. Helping long term performance goals.

5. Showing company products/services as unique and superior to the competition.

6. Making it difficult for competitors to match or exceed the positioning in the mindsof the customers.

b. Overall criteria for effectiveness is: does it generate enthusiasm and commitmentwithin the organization? Examples: AVIS, British Airways and SAAB

c. Differentiation of a product, service or brand is making it different. Positioning isensuring that a product, service or brand "owns" a specific spot in themarket.

b. The attributes of product/service "reputation" are: quality of management,products and services innovativeness, long (not short) terminvestment value financial soundness, and the ability to attract anddevelop suitable staff.

12.5 POSITIONING FOR COMPETITIVE STRATEGY

a. Seek a sustainable competitive advantage with the most appropriate strategyand scope. Smaller companies succeed with a narrower scope(focus).

b. Questions to ask. Do you remember?

c. For competitive advantage to be sustainable, depends upon four factors.

d. A sustainable competitive advantage must be substantial enough to make adifference.

7/29/2019 aglbp

84/207

12.6 COMPETITIVE STRATEGY

a. Competitive strategy involves how the company intends to achieve a sustainablecompetitive advantage in its chosen product markets, with a variety ofstrategic thrusts, which may be:

1. Focus2. Overall cost leadership

3. Product differentiation4. Defensive5. Synergistic6. Broad competitive scope7. Pre-emptive

b. Competitive strategy must use synergy and differentiation to seek a sustainablecompetitive advantage.

12.7 CORPORATE STRATEGY

a The COMPETITIVE STRATEGY shows how the company intends to achieve asustainable competitive advantage in its chosen product/markets.

b. The PRODUCT/MARKET STRATEGY defines markets, products and services,and the means to develop them.

c. Corporate strategies focus on what business the company should be involvedwith, and how its priorities and resources should be allocated.

d. Business level strategies focus on how a business unit or division of a company

chooses to compete in an industry.


a. How to compete with products/services in markets, by:

1. Concentrating on existing markets/products2. New market/product development3. Innovation based on existing resources4. Buying direct competitors

5. Vertical integration6. Buying synergistic businesses

b. Product/market risk

7/29/2019 aglbp

85/207

12.9 CORPORATE STRATEGY - ALTERNATIVES

a. Continue current operations - selling present products/services in presentmarkets, but with improved production, marketing and financial controlsystems; improve consumer analysis and services to cover full cycleof consumer activity needs from purchase to disposal.

b. New market development - selling a present products in new markets, with

specific options:

1. Open additional geographical markets2. Attract other market segments

c. New product development for present markets, with specific options:

1. Develop new product features:2. Develop quality variations3. Product proliferation with additional models/sizes.

12.10 MANAGING STRATEGIC CHANGE

a. Task of adjusting the business to emerging opportunities and problems.

b. Necessary to stop deterioration or capitalize on new opportunities.

c. The time needed to implement different competitive strategies, as well as theirpay-off time, will vary extensively.

d. The change process takes time as it must work through the various categories of

employees.

e. Providing solutions means getting people to work effectively in teams. The teambecomes the core value-creating unit: it has to be /chosen, evaluatedand rewarded accordingly.

f. Solution providers need time with customers. This has to be taken into account inpricing strategies. Flexible pricing--i.e., bundling andunbundling--gives firms the options they need to provide differentcustomers with individualized solutions.

7/29/2019 aglbp

86/207

12.11 STRATEGY IMPLEMENTATION

a. Highly social activity, since we have to work though people.

b. Highly emotional activity, since we are changing people's behavior and valuesystems.

c. Current problems of implementation:

1. Took longer that anticipated2. Major unforseen problems arose3. Coordination of implementation not efficient enough4. Other activities and crises prevent management from putting decision into effect5. Inadequate employee competence and ability6. Training and instructions for lower management levels not adequate.

d. Why do some strategies fail? (Exhibit )

7/29/2019 aglbp

87/207

12.12 LEARNING PATTERNS REVIEW

1. FIRST ... .

2. THEN ... study ...

3. Could you make them work for you?

7/29/2019 aglbp

88/207

12.13 CONCLUSIONS

a. The program was designed to help you to develop strategic language, conceptsand confidence and to motivate you toward further study and practicein the future.

b. The VMPA concept is useful at every level in the company organization and be

easily adapted/customized to support the current strategic planningsystem already established in a company or group.

c. Other conclusions ... from your group?

7/29/2019 aglbp

89/207

7/29/2019 aglbp

90/207

Copyright:

AVM/RGAB 1993/3No copies of without written permission.

7/29/2019 aglbp

91/207

QUIZ

Choose if possible the "most correct" answer and mark the answer sheet a, b, c,d with an "X". PLEASE DO NOT MARK THE QUIZ.

Unit 1

1. In developing corporate strategy, a view leads to a "vision" of:

a. what the future will beb. profitable marketsc. management's real objectivesd. positioning for the future

2. The beliefs, feelings, knowledge and impressions that the MARKET hasaccumulated about the company, is due to:

a. positioning

b. strategic planningc. marketing focusd. luck

3. Overall cost leadership, differentiation, focus, defensive. are all part of:

a. visionb. product/market strategyc. positioningd. competitive strategy

4. STRATEGIES that concentrate on: existing markets, new market development,new product development, innovation based on existing resources, buying directcompetitors, joint ventures, vertical integration, buying synergistic businesses,are ALL:

a. product/market strategiesb. competitive strategiesc. corporate missionsd. visions of nobility

5. In practice, corporate stakeholders are mainly:

a. shareholdersb. all of these and more partiesc. banksd. workers and management

7/29/2019 aglbp

92/207

6. The VMPA concept stands for:

a. vision, mission, people, actionb. view, mission, propositioning, actionc. vision, mission, positioning, actiond. vision, mission positioning, alternatives

7. The corporate strategy TOOL for: what the future holds; what are the anticipated

regulatory, competitive, economic and geo-political environments in which thecompany must compete, is called a:

a. studyb. missionc. researchd. view

8. Questions such as: Where are we going to? What may stop us?Are we any good anyway? How to choose a strategy? How to implement thestrategy to ensure success? are essentially ... questions.

a. marketingb. strategicc. philosophicald. traffic

9. In 1994, top management must begin to consider the critical five year issues,because:

a. Technology alone no longer satisfies the customers; it is merely the entranceticket to the game.

b. Every competitor has a different level of technology, and yet must distinguishitself.

c. Every customer's needs must be identified to ensure a quantity inproduct/service/design which gets to the every possible market as fast aspossible.

d. Product life cycles are longer.

10. A strategic VISION has all of these steps EXCEPT:

a. controlling employee successb. empowering subordinates with authority

c. credibility and responsibilityd. creating meaning through technology

7/29/2019 aglbp

93/207

11. Flexible companies do NOT need:

a. Very strong skills in environmental scanning.b. Quick reaction to signals of changec. Ability to grasp new opportunitiesd. Strong strategic management that separates the "thinkers" from the "doers"

12. Effective VISIONS must NOT be:

a. simple, clear and yet make sense in the marketplaceb. preached once for allc. stable, but constantly challengedd. the result of a long process of reshaping and clarification

13. A "noble purpose" VISION does NOT appeal to people's desire to be:

a. aristocraticb. usefulc. proud of what they do

d. excellent

14. VISIONS give effective leadership a shared sense of direction provided thevision does all of the following, EXCEPT:

a. has a noble purposeb. ensures a sense of urgency to act differentlyc. draws clear boundaries to change thingsd. not involve everybody in the company.

15. Only when we ask "what business are we in?" can we figure out

a. All of theseb. The competitors we must confrontc. The resources we need to master in order to ensure excellenced. The customer "wants" we could serve

cadab cdbaa dbada

7/29/2019 aglbp

94/207

Unit 2

16. Identifying competitive ARENAS and sources of competitive ADVANTAGE, leadsto development of corporate:

a. healthb. missionc. positioning

d. vision

17. POSITIONING enables development of:

a. visionb. missionc. competitive strategyd. emotional satisfaction

18. A statement of: what role will achieve vision, what needs does it wish to satisfy,in what markets, with what products/services, against which competitors, and

how to measure its success, is a corporate:

a. vision st

aglbp

Documents

Transcript of aglbp