sm wk 5 - strategic tools i

8/8/2019 SM Wk 5 - Strategic Tools I

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Class 5

Strategic Tool I611407 Strategic Management

King Mongkuts University of Technology North Bangkok

Dr.PardTeekasap


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Agenda

Discuss on midterm exam

Lecture on strategic tool 1

Strategytalk

Term project progress report


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Comment on midterm exam

Please dont send an excel file

Please use .docx or .pdf

Content is what I want, not the decoration

Everything you answer, you need to explain it


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What is Vision?


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Companys Vision


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Core values

Companies have between 3 to 5 core values

If the circumstances changed and penalized usfor holding this core value, would we still keep it?


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Core values of Philip Morris

The right to freedom ofchoice

Winning beating others ina good fight

Encouraging individualinitiative

Opportunity based on merit;no one is entitled to anyone

Hard work and continuousself-improvement


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Core purpose

Organizations reason for being

5Whys?


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Core purpose ofWalt Disney

To make peoplehappy


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Discovering core ideology

Core ideology cant becreated

You discover coreideology

Core ideology is to guideand inspire, not todifferentiate


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Vision-level BHAG

Big, Hairy, Audacious Goals

Bold missions to stimulate progress

Requires 10 30 years of effort to complete


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Example of BHAG

Become a $125 billion company by year 2000 (Wal-Mart, 1990)

Crush Adidas (Nike, 1960s)

Become number one or number two in every marketwe served and revolutionize this company to havethe strengths of a big company combined with theleanness and agility of a small company (GE, 1980s)


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Vivid description

A vibrant, engaging, and specific description ofwhat it will be like to achieve the BHAG


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Vivid description of Ford

I will build a motor car for thegreat multitudeIt will be solow in price that no manmaking a good salary will be

unable to own one and enjoywith his family the blessing ofhours of pleasure in Godsgreat open spacesWhen Imthrough, everybody will be ableto afford one, and everyonewill have one. The horse will

have disappeared from ourhighways, the automobile willbe taken for grantedgive alarge number of menemployment at good wages


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Why IPOD successful?


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Not just the design, but the

function IPODs design is unique

and cool

But the key success factoris Itune.

This is a new businessmodel


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3 Steps for business model

innovation Identify opportunity to satisfy customers

Lay out how to make a profit

Compare with existing model to see what tochange


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Business model has 4 elements

Customer value proposition (CVP)

Profit formula

Key resources

Key processes


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Customer value proposition

A way to help customers to get an important jobdone

Job = a fundamental problem in a givensituation that needs a solution


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Tatas CVP

Ratan Tata sawmotorcycles

carrying entirefamilies.What if hecould providethese families with

a safe, enclosedcar at a price theycould afford?


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KMUTNB wants new business

model

What is the CVP theuniversity should target?


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Profit formula

Revenue model: price x volume

Cost structure: direct costs, indirect costs, economiesof scale

Margin model: margin for each transaction

Resource velocity: how to utilize resource


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Tatas profit formula

To build a car for $2,500

Profit would be generated through high volume


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What is the profit formula for

KMUTNB?


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Key resources & key processes

Key elements that create value for the customerand the company

Tata form a team of young engineers to developnew processes

Outsourcing 85% of car component

60% fewer vendors

Employing a network of assemblers


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What are the key resources &

key processes for KMUTNB?


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Hints on CVP: 4 common barriers

to get jobs done Insufficient wealth

Insufficient access

Insufficient skill

Insufficient time


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New business model is expensive

Business innovation should not be used every time

New products can be created withoutfundamentally change the business model

Business model change should be used when thesignificant changes are needed to all elements of

existing model


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Why global film industry locates

together at Hollywood?


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What is cluster?

Geographic concentrations of interconnectedcompanies and institutions in a particular field

Clusters promote both competition andcooperation


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How clusters affect competition

Increasing the productivity of companies in thearea

Driving the direction and pace of innovation

Stimulating the formation of new businesses


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Strategy Talk


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Term Project Progress Report

sm wk 5 - strategic tools i

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