fcmb march 2011 day 1 revised

Douglas Reid

dreid@business.queensu.ca@douglasreid

Fundamentals of Strategy: Strategy and Operations

Strategy concept

Fixing strategy – operations misalignments

Application to FCMB – future planning-------------------------------------------------------Personal development plan

You are here

To become a more effective leader, I will…

Do more of…_______________________________________________________________________________________________

Do less of…_______________________________________________________________________________________________

Start doing…_______________________________________________________________________________________________

Stop doing…_______________________________________________________________________________________________

How we’ll not learn

Introduction (s)

Strategy in action

Break

The strategy concept

Strategy at FCMB

From strategyto action

Lunch

How strategy changes

Describe your customers. List ALL the benefits that your camera creates for them.

What must your company be good at doing so that you are able to create these benefits?

What tasks must you do inside your company, and what tasks should you hire others to do?

Which competitor(s) do you worry about, and in each case, why?

Segmentation

Generic strategy

Core competence

Value chain

Creating competitive advantage

Advantage preservation

Defining StrategyWhat Setting priorities about, and making choices for both the

present and the future

How Put into action through resource allocation and attraction

Constraints Under challenging conditions

* Imperfect information

* Environment of rapid technological advancement

* High chance of retaliation

Why To get competitive advantage

For (the customer segment we want to serve)

Who want (the outcome sought by that customer)

Our product or service is a (our part of the solution)

That features (key benefit provided).

Unlike (our main competitors)

Our product or service provides (key point[s] of difference)

As supported by (what makes the difference possible)

And protected by (why competitors cannot easily overcome it).

Strategy is often expressed this way…

Customer willingness to pay

Cost of delivering

what the customer buys

Strategy

Customer willingness to pay

Cost of delivering

what the customer buys

Strategy

Increases willingness

to pay?

Meets hurdle rate for capital?

YesDo it!

Yes

Decreases cost?

No No

Meets hurdle rate for capital?

Yes Yes

No

Teach

No

Implementation happen primarily by changing the allocation of resourcesconsistent with objectives

Any non-human assetof an organization thata manager can deploy

Brands, equipment, IP, licenses, machinery, information, etc.

Money

People Skills

Time Duration, sequence and project choices to which you apply the money and people that you have

Strategy

Actions taken to increase customer willingness to pay

And/or reduce cost.

Actions mean allocation and coordination of:

* Money

* People

* Time

Uniquely, as a system.

How does strategy help you?

What assumptions are you relying upon?

So sometimes, strategy must change

Source: Hamel, 2009

Exhaustion

Replication Supplantation

Evisceration

Even good strategies decay…

Major trends that will affect the Bank…

Political ____________________________________________________________________________________________________________________________________________________________________________________________________

Economic ___________________________________________________________________________________________________________________________________________________________________________________________________

Social ______________________________________________________________________________________________________________________________________________________________________________________________________

Technological ________________________________________________________________________________________________________________________________________________________________________________________________

Global ______________________________________________________________________________________________________________________________________________________________________________________________________

Rivals

Buyers

Suppliers

New entrants

SubstitutesSource: Porter, 1980

Think of a time in your entire experience with the Bank when you have felt most excited, most engaged and most alive.

What factors made this such a great experience?

Misalignment

Advice

Strategy must fit the future environment…

…while respecting what FCMB has become as a result of learning from its past, including successes and failures.

Let’s summarize

Tomorrow…