Download - What strategy is not
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Objective
O To share “Six common misconceptions
about what is strategy”
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O Why need to understand strategy? (New
team)
O Strategy is a common word in the
manager's vocabulary
O Mistaken as Objectives and Actions
O What strategy is not?
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What is Strategy
O It is a manner in which the firm gains the favor of itscustomers
O Strategy is the outcome of knowledge gained from pastaction.
O It is the insight gained from activity, and not the activityitself
O Action is not strategy until:
O 'Where'O Leads to the destination, the end they seek.
O 'How'O Selected defined paths to achieve desired end result and
not SOP
O 'What'O Prescribes activities
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1. The Fallacy of Action
O 'How shall we achieve growth?‘
O Let's enter new markets. Or,
O Train sales engineers to sell better.
O Increase the number of calls sales people
make.
O Introduce new products.
O Do something, anything !
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2. The greed for Scale
O How stated objectives will be achieved?
O Some managers will offer to do more.
O They would add manpower,
O Appoint more resellers,
O Open more outlets, increase production, or
O Simply work harder
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2. The greed for Scale
O Scale without customer retention plan?
O Scale without increasing customers?
O Kind of customers (Segmenting)
O Customer preferences
O Where they are how to attract them
O Kind of product and service required to
attract and satisfy
O Scale without effective competitive
strategy?
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3. High Quality, Low Cost, Superior Customer Service
O Is it differentiation or expectation of
customers for continuous improvement
O Which business can survive by:
O Charging higher cost without delivering
unique or superior benefit
O Providing static or low quality
O And providing bad quality
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3. High Quality, Low Cost, Superior Customer ServiceO Backward integration for offering better
pricing, High quality and providing
customer service can be strategy.
O Reliance
O Ford motors.
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4. Strategy is not secret
O Top Management has only access tostrategy.
O Hard to formulate in strategy livingorganization with help of Managers andground team.
O Secret is no more applicable:
O All competitors also has access of similarinformation, resource and opportunities.
O Activities can be secret, But surelyStrategy is not.
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5. Hurting competition is not strategy
O Destroy smaller competitors.
O The flaw is in focusing strategy on
competition instead of the customer.
O Small players exist because there is a
market for their products.
O Large companies often cannot or do not
fulfil the needs of some sections of
customers
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5. Hurting competition is not strategy
O Strategy for the market leader:
O Growing usage and creating new niches in
a growing market
O Coke:
O Thanda Matlab Cocacola
O No formality
O Zero sugar coke
O Cadbury
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6. Annual Operating Plan is not strategy
O Jack Welch:
O Men could not reduce strategy to a formula.
O Detailed planning necessarily failed, due to the
inevitable frictions encountered:
O Chance events, imperfections in execution, and
the independent will of the opposition."
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Strategy Annual plan
OProduct of insight
OBroad direction
that permits
experimentation,
adaptation and
learning from
experience
OProgram ofaction
OExpects actionswill be performedas stated andreasons forsuccess orfailure learntfrom postmortem
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Source:
O http://www.vnbhattacharya.com/
O http://www.forbes.com/sites/freekvermeule
n/2013/11/22/what-strategy-is-not/
O Article by Jack welch, Bill Gates and
Ratan Tata on Strategy.
O www.google.com