Strategy and Competitive Advantages Built by Stambaugh/2009 Failing to plan is planning to fail! Jeff Stambaugh

Strategy Intro Built by Stambaugh/2009 ■ What great companies first come to mind? ■ What bad companies first come to mind? ■ And now the key question … what made the great great and the bad bad? Failing to plan is planning to fail!

Strategy is … Built by Stambaugh/2009 ■ Ongoing processes of: ■ Analysis (Chapters 2-4) ■ Decisions (Chapters 5-8) ■ Actions (Chapters 9-12) ■ To achieve a sustainable competitive advantage (why some firms outperform others over time) ■ What is strategy to Porter? Failing to plan is planning to fail!

Strategy Attributes Built by Stambaugh/2009 ■ Directs organizations toward goals & objectives ■ Multiple “masters” (Stakeholders) ■ Short and long-term perspectives ■ Tradeoffs between effectiveness and efficiency ■ Ambidexterity: take care of the present AND position your firm for the future Failing to plan is planning to fail!

My Take on Strategic Process Built by Stambaugh/2009 Vision Analysis Formulation (Decision) Implementation (Action) Assess Performance Failing to plan is planning to fail!

My Take on Strategic Process Built by Stambaugh/2009 Vision Analysis Implementation (Action) Assess Performance Formulation (Decision) Failing to plan is planning to fail!

The Devil Wears Prada Built by Stambaugh/2009 ■ Roll the film ■ Analysis ■ Formulation ■ Implementation Failing to plan is planning to fail!

Last spring, Starbucks fired its CEO (Jim Donald) and brought back the former CEO (Howard Schultz). Starbuck’s stock price was down as the growth rate and earnings were down this year, something Donald blamed on the slowing economy and high coffee prices. Schultz (who was still the Chairman of the Board) faulted Starbuck’s strategy and thus fired Donald. Starbucks’ stock price rose 8% upon news of Donald’s firing. According to the book this represents which view of leadership 1.Romantic view of leadership 2.External view of leadership 0 of 5

Strategy Can Built by Stambaugh/2009 ■ Set firm direction ■ Focus effort and provide coordination ■ Define the organization ■ Provide consistency ■ Get you ready for unforeseen challenges Failing to plan is planning to fail!

Stakeholder Groups FIGURE 1.4 Stakeholders: Individuals and groups with an interest in a firm’s performance and an ability to influence its actions Firms & stakeholders need each other (Symbiosis) Dilemma—satisfying one stakeholder’s needs may come at expense of another CSR and Triple Bottom Line (financial, social, and environmental) Fortune Link Best Employers Link Yahoo Finance Copyright 2006: Thomson Business and Professional Publishing. All Rights Reserved. From Hitt, et al Understanding Business Strategy

Strategic Coherence Built by Stambaugh/2009 Hierarchy of Goals Company vision Mission statements Strategic objectives Failing to plan is planning to fail!

Do Vision / Mission Statements Really Matter? Built by Stambaugh/2009 ■ How many of you know your company’s vision / mission statement? ■ Does that matter ? ■ What understanding the vision can do—the Men’s Wearhouse example ■ Vision / Mission statements can make a difference, especially in times of turmoil or as a compass! ■ Starbucks: Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow Failing to plan is planning to fail!

Good “SMART” Objectives Built by Stambaugh/2009 ■ S – Specific ■ M – Measurable ■ A – Appropriate ■ R – Realistic ■ T – Time-bound Failing to plan is planning to fail!

Takeaways Built by Stambaugh/2009  Strategy is a dynamic process seeking a sustainable competitive advantage  Strategy changes are inevitable  Analysis—Formulation—Implementation  Stakeholders: who matters and how much do they matter  Value of a direction and how to set good goals Failing to plan is planning to fail!

Next Class Built by Stambaugh/2009 ■ Read Chapter 2 & Andy Grove Excerpt ■ ST2 Due Failing to plan is planning to fail!