Temple University BA 951

Discussion – The strategy process

Ram MudambiTemple University (USA)

© Ram Mudambi, Temple University and U of Reading, 2001

Is strategic planning worthless?

• Strategic Flexibility – the key to competitive advantage in the 21st century

• The capability of the firm to pro-act or respond quickly to changing competitive conditions.– ‘I’d rather be roughly right and fast than exactly right and

slow. The cost of delay is greater than the cost of the occasional mistake.’ – Percy Barnevik, Former CEO, ABB

– ‘In an increasingly networked world economy, it is not the big that will beat the small, but the fast that will beat the slow.’ – John T. Chambers, CEO, Cisco Systems

© Ram Mudambi, Temple University and U of Reading, 2001

Two groups of drivers

• Technological revolution– Rate of technological progress– Knowledge intensity of output– Positive feedback industries (network

economies)

• Globalization– Worldwide economic development– Falling trade barriers– Collapse of state run restrictive systems

© Ram Mudambi, Temple University and U of Reading, 2001

Components of strategic flexibility

• Build dynamic core capabilities• Focus and develop human capital• Effectively use new technologies

– Manufacturing

– Information

• Value creating strategies – global, cooperative

• New organizational structures– Horizontal, learning, loose