Strategic planning managment

• There is something about the idea of diversity, in business as well as in biology, that suggests an ability to absorb external shocks and the potential for productive innovation.
• The best measure of this in a business context is the ecosystem’s capacity to increase meaningful diversity through the creation of valuable new functions, or niches.
• One way to assess niche creation is to look at the extent to which emerging technologies are actually being applied in the form of a variety of new businesses and products. 

• A keystone organization is one that aims to enhance the overall health of the network by creating value and sharing value.
• “Keystones can create value and increase ecosystem productivity by simplifying the complex task of connecting network participants to one another or by making the creation of new products by third parties more efficient”.
• They can also share value, increase robustness and influence niche creation by sharing innovative technologies. 

• An ecosystem dominator is pretty much the opposite of a keystone organization. Instead of adding value, a dominator may drain the system (value dominator) or even take over the system (physical dominator) by exploiting a critical position.
• A value dominator indirectly affects the system by extracting as much of the value the other members of the ecosystem have created possibly not leaving enough value to sustain the system.
• On the other hand, a physical dominator directly affects the system by aiming “to integrate vertically or horizontally to own and manage a large proportion of a network”

• A niche player aims to specialize and differentiate itself from other members in the system. “When they are allowed to thrive, niche players represent the bulk of the ecosystem and are responsible for most of the value creation and innovation”.
• It is important to note that roles in a network are dynamic. For instance, keystones may become dominators and niche players may eventually become keystones.

Ecosystem strategy not relevant

1. Values – of doing good to the society, nature and the environment in general
2. Strategy – of being more responsible towards the society and the environment and using that as a strategy towards growth and profits
3. Public pressure – consumers, media, govt., overseeing bodies and international organizations are constantly pressurizing companies to be more empathetic to the society and environment and more so urging them to do the right things.

Purpose of CSR: competition and value creation, climate change awareness, glamour, Response to loss of reputation, defensive strategy

Shared value: The concept of shared value can be defined as policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates

Corporate strategy Where to compete

Competitive strategy How to compete

Grwoth

Commitment

Scope

• Vertical scope
• Product scope (Innovation)
• Geographical scope (Internationalization) 

• Core business

• Subsidiary

• Joint venture

• Alliance

• Turnkey project

• Franchising

• Licensing

• Direct exports

• Indirect exports

• Strategies for growth (Mergers and acquisitions, costly and fast. Organic grow -> cheap but slow)
• Strategies for profiting from growth (Increase productivity, Increase scope: Vertical scope, Product scope through innovation, geographical scope through internationalization)

1. Industry

2. Strategic group

3. Buyer group

4. Scope of offerings

5. Functional – emotional

6. Time

Competing in our industry --> comparaitve analysie --> incremental improvements for clients --> differentiation or low cost

creating new market space --> value innovation --> radical improvements for clients --> Differentiation and low cost

• Strategic process is how the firm obtains the necessary information to develop and maintain that map, formulate and change strategy, and communicate the strategy within the organization

1. Clear set of long-term goals

2. Define scope of the firm, product will offer, markets will pursue

3. Competitive advantage to achieve

4. Logic to achieve it

 • Specific

• Measurable

• Agreed Upon / Achievable

• Realistic

• Time Based

• Definition of the products, markets, geographies, technologies and processes with which it will be involved
• Scope also defines the activities the firm will NOT take
• It helps define the firm’s position with respect to broad and controversial strategic issues

How the firm intends to achieve its long-term goals within its chosen scope

Core argument for why the firm will succeed, How the goal, scope and competitive advantage comes together

Mission: A statement to describe firm’s reason for existing

Value: A list of virtues

• Clarify the firm’s goals
• Public relation statement
• Inform about the goal in NGOs

Vision: Describe the strategist’s plan for closing the gap between current reality and a potential future

Functions of a vision:

• Contribute formulate a good strategy
• Motivate the firm’s employees to achieve it

• Incentives
• Clarity
• Coordination
• Efficiency
• Evolution or adoption
• Change

• Identification
• Evaluation
• Option Development
• Option Evaluation
• Selection

• Corporate strategy defines the scope of the firm in terms of the industries and markets in which it competes. Corporate strategy decisions include choice over in diversification, vertical integration, acquisitions and new ventures; and the allocation of resources between the different businesses of the firm.

• Business strategy is concerned with how the firm competes within a particular industry or market. If the firm is to prosper within an industry, it must establish a competitive advantage over its rivals. Hence, this area of strategy is also referred to as competitive strategy.

Competitive advantage + action = Performance

Competitive advantage (Position, capabilities)

Action (Asset acquisition, asset deployment)