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STRATEGIC INTENT
By GRAY and C.KPARHALAD
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GROUP MEMBERS
PRESENTATION BY
SHEHLA KHILJI(6324)
SEHRISH FATIMA(6698)
KINZA BUTT (6644)
HIRA PERVEEN(6632)
KIRAN FAHIM(6532)
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STRATEGIC INTENT
Incorporates stretch targets, which force companies tocompete in innovative ways.
Strategic intent implies a sizable stretch for an organization.Current capabilities and resources will not suffice. Thisforces the organization to be more inventive, to make themost of limited resources.
Companies that have risen to global leadership over the past20 years to their resources created an obsession withwinning at all levels of the organization and then sustained10 to 20 year quest for global leadership.
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ARGUMENT
Western companies focus on trimming theirambitions to match resources search only
for advantages they can sustain.
Japanese corporations leverage resourcesby accelerating the pace of organizational
learning and try to attain seemingly
impossible goals.
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TECHNIQUES BY JAPANESE
COMPANIES
Building layers of advantage
Searching for loose bricks
Changing the terms of engagement Competing through collaboration
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New Managerial Trend
Manufacturing offshore Lower Labor cost
Rationalizing product lines
Instituting quality Circle Just-in-time production
Adopting Japanese human resource
practices
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REGAINING COMPETITIVENESS
Companies regaining competitiveness will mean
rethinking
many of the basic concepts of strategy such as
Strategic fit (between resources and
opportunities) Generic strategies (low cost versus
differentiation versus focus)
Strategy hierarchy (goals, strategies, and tactics) Remaking Strategy describes our research and
summarizes the two contrasting approaches to
strategy
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COMPETITOR ANALYSIS
Competitor analysis focuses on the existing resources
(human, technical, and financial) of present competitors.
European industry leaders, Komatsu was less than 35% as
large as Caterpillar (measured by sales) was scarcely
represented outside Japan, and relied on just one
product line small bulldozers for most of its revenue.
Honda was smaller than American Motors and had not yet
begun to export cars to the United States.
Canons first halting steps in the reprographics business
looked pitifully small compared with the $4 billion Xerox
powerhouse
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COMPETITOR ANALYSIS
(CONTD)
By 1985 Komatsu was a $2.8 billion companywith a product scope encompassing a broad
range of earth-moving equipment, industrial
robots, and semiconductors Honda manufactured almost as many cars
worldwide in 1987 as Chrysler
Canon had matched Xeroxs global unitmarket share.
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EXPRESSIONS OF STRATEGIC INTENT
Strategic intent envisions adesired leadership position andestablishes the criterion theorganization will use to chart itsprogress.
Expressions of strategic intent Komatsu set out to encircle
Caterpillar.
Canon sought to beatXerox.
BEAT
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Strategic intent captures the essence
of winning
NECs strategic intent, set inthe early 1970s, was to
acquire the technologies that
would put it in the best
position to exploit theconvergence of computing
and telecommunications
Coca-Cola, strategic intent
has been to put a Coke
within armsreachof every
consumer in the world
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STRATEGIC INTENT IS STABLE OVER TIME
Komatsu, encircling Caterpillarencompassed a succession of
medium term programs aimed
at exploiting specific
weaknesses in Caterpillar orbuilding particular competitive
advantages. When Caterpillar
threatened Komatsu in Japan, it
responded by first improvingquality then driving down costs,
then cultivating export markets,
and then underwriting new
product development.
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strategic intent sets a target deserves
personal effort and commitment Company that possesses a strategic intent, top management is
more likely to talk in terms of global market leadership.
American corporations measure their contributions expressed in
terms of shareholder wealth.
The goal of strategic intent is to fold the future back into the
present. The important question is not
How will next year be different from this year?
But
What must we do differently next year to get closer to ourstrategic intent?
Achieving strategic intent requires enormous creativity with
respect to means
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Traditional view of strategy focuses on thedegree of fit between existing resources and
current opportunities
Corporate challenges come from analyzing
competitors as well as from the foreseeable
pattern of industry evolution.
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Companies that set corporate challenges to
create new competitive advantages
Create a sense of urgency Develop a competitor focus at every level
through widespread use of competitive
intelligence
Provide employees with the skills they need to
work effectively training in statistical tools
Give the organization time to digest one
challenge before launching another Establish clear milestones and review
mechanisms to track progress
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CONTD:
For smart competitors, the goal is notcompetitive imitation but competitiveinnovation, the art of containing competitiverisks within manageable proportions.
Reciprocal responsibility means shared gainand shared pain. The pace at which acompany embeds new advantages deep
within its organization, not on its stock ofadvantages at any given time
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CONTD:
To achieve a strategic intent, a companymust usually take on larger, better-financedcompetitors. That means carefully managing
competitive engagements so that scarceresources are conserved. Managers cannotdo that simply by playing the same gamebetter making marginal improvements to
competitors technology and businesspractices
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Approaches to competitive Innovation
Four approaches to competitive innovationare evident in the global expansion of
Japanese companies
Building layers of advantage
Searching for loose bricks
Changing the terms of engagement
Competing through collaboration
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COND:
EXAMPLE:
1967, Japan had become the largest producer of
black-and-white television sets. By1970, it wasclosing the gap in color televisions. Japanese
manufacturers used their competitive advantageat
that time, primarily, low labor costs establish world-
scale plants.
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COND: SEARCHING FOR LOOSE
BRICKS: Honda took on leaders in the
motorcycle industry, for example, it
began with products that were just
outside the conventional definitionof the leaders product-market
domain
Honda was selling 50cc
motorcycles in the United States,assembling the design skills and
technology it would need for a
systematic expansion across the
entire spectrum of motor related
businesses.
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COND:
Changing the terms of engagement
During the 1970s, both Kodak and IBM tried to match Xeroxs
business system in terms of segmentation, products,distribution, service, and pricing. As a result, Xerox had no
trouble decoding the new entrants intentions and
developing countermoves. IBM eventually withdrew from the
copier business, while Kodak remains a distant second in the
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COND: Competing through collaboration
Toyota joint venture with GM
Mazdas with Ford
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Process of Surrender
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The strategists goal is not to find a niche within the existing industry
space but to create new space that is uniquely suited to thecompanys own strengths space that is off the map.
Economies of scope may be as important as economies of scale inentering global markets. But capturing economies of scope demandsinter business coordination that only top management can provide.
Almost every strategic management theory and nearly everycorporate planning system is premised on a strategy hierarchy in
which corporate goals guide business unit strategies and businessunit strategies guide functional tactics
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A thread that everyone perceives but no
one talks about creates more anxiety
than a tread that has been clearly
identified and made the focal point for the
problem-solving efforts of the entire
company.
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Wrong Approach to Strategic Intent
Goal to find a niche in existingindustry
place
Concept like mature anddeclining are misunderstood
Tools of strategic analysis are
focusedinternally
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Creativity Issues
Not enough heads Incremental improvement strategies
Not venturing into different territories
Entry into personal copiers from overseas salessubsidiary
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Evaluation Parameter
Evaluation on numbers basis unable to develop deep business
knowledge due to career development.
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Thank You