Classical Strategy Management (overview) by Sia Valentinova Tsolova

JA Bulgaria
Strategic Management
Sia Valentinova - assistant
s.valentinova@gmail.com
“Technology Entrepreneurship
and Innovations in IT”
Sofia University “St. Kliment Ohridski”

Introduction
The following lecture is part of an
introductory wide-topic course on
Starting IT Companies for Students,
aiming an introduction of
the basic terms and structure of
Strategic management.
Sia Valentinova - "Technology
Entrepreneurship and Innovations in IT" -
Sofia University "St. Climent Ohridski"

Strategic management
Strategy answers the question:
(a simplified version)
How can we survive /win/ in the future?

Strategy is about (1/2)
• Where is the business trying to get
to in the long-term (direction)
• Which markets should a business
compete in and what kind of
activities are involved in such
markets? (markets; scope)
• How can the business perform
better than the competition in
those markets? (advantage)?

Strategy is about (2/2)
• What resources (skills, assets, finance,
relationships, technical competence,
facilities) are required in order to be
able to compete? (resources)?
• What external, environmental factors
affect the businesses' ability to
compete? (environment)?
• What are the values and expectations
of those who have power in and
around the business? (stakeholders)

Strategy
Analysis
Strategy
Formulation
Strategy
Implementati
on

Strategy
Analysis
Strategy
Formulation
Strategy
Implementation
and Execution
Evaluation and
Control

Purpose or Mission statement
or Mantra
• A mission statement is a brief
description of a company's
fundamental purpose. A mission
statement answers the question,
"Why do we exist?"
• The mission statement articulates
the company's purpose both for
those in the organization and for
the public.

Purpose or Mission statement
or Mantra
According to Bart (1997), the commercial
mission statement consists of 3 essential
components:
• Key market – who is your target
client/customer? (generalize if
needed)
• Contribution – what product or
service do you provide to that client?
• Distinction – what makes your
product or service unique, so that the
client would choose you?

Mission statement or Purpose
or Mantra
• Guy Kawazaki: Make meaning in
Your company
• http://www.youtube.com/watch?v=
lQs6IpJQWXc
• Guy Kawazaki: Make a Mantra
• http://www.youtube.com/watch?v=
jT7xlFTinIw

Mission Statements

Mission Statements
4. This company’s mission is to
give people the power to share
and make the world more open
and connected.
According to you, to which
company does this mission
statement belong to?
(next slide shows the answer)

Mission Statements
give people the power to share
and make the world more open
and connected.
This mission statement belongs
to

Mission Statements
organize the world‘s
information and make it
universally accessible and
useful.

Mission Statements
organize the world‘s
information and make it
universally accessible and
useful.
to

Mission Statements
be the fabric of real-time
communication on the web.

Mission Statements
be the fabric of real-time
communication on the web.
to

Mission Statements
provide fast and easy video
access and the ability to share
videos frequently.

Mission Statements
provide fast and easy video
access and the ability to share
videos frequently.
to

Mission Statements
… Now these were single
business companies – what
about the mission statements
of multi-business companies?

Mission Statements
2. This company is committed
to bringing the best personal
computing experience to
students, educators, creative
professionals and consumers
around the world through its
innovative hardware, software
and Internet offerings.

Mission Statements
enable people and businesses
throughout the world to realize
their full potential.

Your Company’s Vision
• Where should the company be
headed?
• What should its future technology-
product-customer focus be?
• What kind of enterprise we want to
become?
• What industry standing do we want
to achieve in five years?

Vision
• Apple
– Vision in 2000
– Vision in 2010
• Can you see what is their vision for
the future? (see first 40 seconds)
https://www.youtube.com/watch?v
=RQieoqCLWDo

Setting Objectives
• The purpose of setting objectives is to
convert managerial statements of
strategic vision and business mission
into specific performance targets –
results and outcomes the organisation
wants to achieve.
• Setting objectives and then measuring
whether they are achieved or not
helps managers track an
organisation’s progress.

SMART objectives
• S (Specific)- what do we want to
achieve?
• M (Measurable) - how will we know if
it has achieved the right result?
• A (Achievable) - do we have the right
resources to carry this out?
• R (Relevant) - does it address the
problem?
• T (Time based) - what is the deadline?

Strategy Analysis Tools
• SWOT Analysis
• PEST Analysis
• Competition Analysis (Niche/Gap
Analysis)
• TOWS Analysis
• Porter’s Five Forces
• Critical Success Factors
• Unique Selling Proposition Analysis
(this is a list in short)

Strategic Analysis
• SWOT Analysis
• SWOT analysis (Strengths,
Weaknesses, Opportunities and
Threads Analysis)
Strategic
Analysis
+ -
Internal
Environme
nt
Strengths (S) Weaknesses (W)
External
environme
nt
Opportunities (O) Threads (T)

Strategic Analysis
• PEST Analysis – External Environment
(Political, Economical, Social,
Technology)
+ -
Political
Factors
Economical
Factors
Social
Factors
Technology
Factors

Strategic Analysis
Specific GoalsExternal Analysis
- Customers
- Pricing constraints
- Competitors
- Distribution issues
- Technology
- Macro-economy
- Regulation
- Work-style trends
- Major uncertainties
- Suppliers
- Potential partners
Threads and
Opportunities
Internal Analysis
- Current performance
- Brand power
- Cost structure
- Product portfolio
- R&D pipeline
- Technical mastery
- Employee skills
- Company culture
Strengths and
Weaknesses
Strategy formulation

Strategic Tools
Strategic Analysis
(Environmental
Analysis)
External
Analysis
Macro level
PEST Analysis
Micro level
Threads (SWOT
Analysis)
Opportunities
(SWOT
Analysis)
Internal
Analysis
Strengths
(SWOT
Analysis)
Weaknesses
(SWOT
Analysis)

Strategic Analysis
• Niche / GAP Analysis
Ex.: mobile
phones with
touch screen
Ex.: mobile
phones
without touch
screen
High-end
product
Low-end
product
Apple
Samsun
g
HTC
Nokia
Black-
berry

General Classic Strategies
Porter’s Generic Strategies

Some news on strategies…
• Network effect strategy
• Blue Ocean strategy

Functional strategies
• Some more information on
Functional strategies
– Marketing, Go-to-market strategy …
– Product development
– Customer relationships
– Human resources
– Etc.

Strategies by
Company hierarchy
Maybe technology will change
company’s complex hierarchies?
- How do you think?
- In what direction?

Human Resource management
*Examples for functional strategies:

Go-to-market strategy
Check “Channel Value Chain”

The Ansoff Matrix
(Product/Market Expansion Grid)

The Ansoff Matrix
(Product/Market Expansion Grid)
A further modulation: The 9-Box Grid

The Product Life-Cycle Diagram

Strategy implementation
and execution
What is the difference between
Strategy implementation and Strategy
execution?

and execution
• Strategy implementation:
Setting up the organisation in order to
successfully implement the strategy
• Strategy execution:
Actually executing the strategy,
following the defined plan and goals,
etc.

and execution
• And while during strategy execution
strategy control is also carried out,
let’s see what is Strategy Control
and its purpose and … which is the
tool that unifies Strategy
Implementation, Strategy Execution
and Strategy Control ?

Strategic management:
Control and Evaluation
• Controlling is a process, which helps
define how much actual actions and
results are corresponding to the
desired actions and previously defined
goals.
• Aim: to be able to find as early as
possible deviations from the defined
actions and goals and to be able to
correct in time these deviations.

Strategic management:
Control and Evaluation
The process of control has three major
stages:
1) Developing of standards and guidelines for
implementation
2) Measuring and comparing of the reached results
with defined standards
3) Evaluation of the information and results. Taking
correcting actions.

So… What is Balanced Scorecard? And how it
helps us in Strategy management, Strategy
execution and Strategy control?
Balanced Scorecard divides goals and
their connections in four perspectives:
- Financial perspective
- Customers perspective
- Internal processes perspective
- Learning and Growth perspective

Balanced Scorecard:
strategy maps
Example by Borislav Asenov’s master thesis (software QPR Scorecard) with mentor Sia Valentinova

Balanced Scorecard
Example by software Balanced Scorecard Designer

Example by Borislav Asenov’s master thesis (QPR Scorecard software) with mentor Sia Valentinova

KPIs

Balanced Scorecard
Example by Borislav Asenov’s master thesis with mentor Sia Valentinova

Dashboard

Balanced Scorecard
Example by Borislav Asenov’s master thesis (software QPR Scorecard) with mentor Sia Valentinova

Thank you for your attention!
Благодаря Ви за вниманието!
(in Bulgarian)

Classical Strategy Management (overview) by Sia Valentinova Tsolova

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