SCM 460 GLOBAL SUPPLY CHAIN STRATEGY
Dr. Alex Rodrigues
CLASS 04
Business Strategy

Class 04 -Topics
Topic 1:
Understanding strategy
Topic 2:
Core competency of a firm

strategic formulation

Strategic Management: Definition
• Strategy (from Greek στρατηγία stratēgia, "art of troop leader; office of general, command, generalship") is a high level plan to achieve one or more goals under conditions of uncertainty.
• Strategy is important because the resources available to achieve these goals are usually limited.
• Strategy generally involves setting goals, determining actions to achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the means (resources).

Strategic Management: Definition
• Strategy can be intended or can emerge as a pattern of activity as the organization adapts to its environment or competes. It involves activities such as strategic planning and strategic thinking.
• Henry Mintzberg from McGill University defined strategy as "a pattern in a stream of decisions" to contrast with a view of strategy as planning, while
Max McKeown (2011) argues that "strategy is about shaping the future" and is the human attempt to get to "desirable ends with available means".
• Dr. Vladimir Kvint defines strategy as "a system of finding, formulating, and developing a doctrine that will ensure long-term success if followed faithfully.“ • Harvard Professor Michael Porter identifies three principles underlying strategy: creating a "unique and valuable [market] position", making tradeoffs by choosing "what not to do", and creating "fit" by aligning company activities with one another to support the chosen strategy.

Present Forces in Marketplace
Demands for the Flexibility of Partnership and
Collaborative Networks
Presence of an increasing number of alternatives

More (not necessarily better) information data
Extensive connectivity
Advances in Technology
• Customer’s Value keeps changing!
• The “never satisfied” customer Shrinking product life cycles
Profit margin squeezes

“So What ?”
• Surviving in this new environment means working with:
Less lead time
Less inventory
Less cost
Faster time to market
More flexibility
More reliance on the supply chain

Product Obsolescence

Product Obsolescence

The four Perspectives on Operations Strategy
Top-down
perspective
What the business wants operations to do
Operations
resources perspective What operations resources can do Operations strategy What day-to-day experience suggests operations should do

Bottom-up perspective Market requirement perspective
What the market position requires operations to do

Competitive Priorities
Minimum price, highest value

Cost
Dependable
delivery

Quick delivery Speed

Minimum cost,
Dependability
maximum value
Fast
Reliable
Internal
throughput operation benefits

Quality
Error-free
products and services Error-free processes Ability to change Flexibility

External benefits Frequent new products, maximum choice Reading 1: Scanning the Periphery

• Maintaining good strategies to reach objectives can depend on seeing opportunities and threats at the periphery of the company’s visions
– Mattel and MGA Entertainment (Barbie vs. Bratz)
– 81% of global managers surveyed believe scanning ability needs improvement
– 97% lack early warning systems

Reading 1: Scanning the Periphery

• Organize for “scanning”
• Balance Need with Capability
Need
• Nature of Your Strategy
• Complexity of Your
Environment
• Volatility of Your
Environment

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•
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Capability
Your Leadership
Orientation
Your Knowledge
Management Systems
Your Strategy Making
Your Organizational
Configuration (Structure
& Incentives)
Your Culture (Values,
Beliefs & Behaviors)

Reading 1: Scanning the Periphery

Reading 1: Scanning the Periphery

Reading