The Nature of Strategic Decisions

Although the process of creating strategy is often discussed as if it were an unconstrained design process, keep in mind that while strategists evaluate strategy, the firm is operating. 

Presumably this involves evaluating the extent to which present strategy is meeting expectations.  It may be the case that only a small part of, say, marketing strategy would have to be changed to correct a problem.  In effect, then, such a change would constitute an acceptance of societal-, corporate-, and business-level strategy, and also of most of the firm's functional strategy set.  Marketing strategy would be all that was rejected.  When a firm's performance is less than satisfactory, the reason often is a functional strategy shortcoming. 

One might say, then, that a "good" business-level strategy would have been poorly implemented by part of its functional strategy set.  For this simple example, a change in marketing strategy could improve performance while other levels of strategy would remain unchanged.

Alternatively, a problem with the nature of a firm's or SBU's business brought about by a major environmental opportunity or threat, a change in that level's goal set, or the development of some internal capability or weakness could necessitate a business-level strategy change.  The new strategy would probably include vestiges of the old along with some unfamiliar elements.  In most cases a whole new functional strategy set would likely have to be designed and put into effect to implement the new business-level strategy.

More generally, one could conceivably change parts of a firm's functional strategy set without changing business-level strategy.  However, rarely would one expect to encounter the case in which a change in business-level strategy did not trigger the necessity to change functional-level strategy in some way, at least not in a successfully managed business.

There is a risk of incorrectly identifying the strategy level at which a problem exists.  The tendency is to change functional level strategies or organisational structure in an attempt to remedy any problem.  Of course, if the problem existed within the firms corporate- or business-level strategy, for example, changing functional-level strategy would not correct it. In fact, this move would be likely to aggravate the situation.  The reason for this tendency is probably that functional strategy changes are potentially less disruptive than changes in the other levels.

Good fortune

Dr. Brian

CEO MAANZ International http://www.marketing.org.au

Twitter @smartamarketing https://twitter.com/#!/smartamarketing

http://www.linkedin.com/in/drduck

Blog 1 www.smartamarketing.blogspot.com

Blog 2:  www.smartamarketing.wordpress.com

Thinking Strategically

Strategy is the great work of the organisation. In situations of life or death, it is the Tao of survival or extinction. Its study cannot be neglected.  —Sun Tzu, The Art of War

Strategic thinking and development is a deliberate search for a plan of action that will develop a business’s competitive advantage and compound it.

When implementing specific programs, this involves acquiring the requisite resources, developing the process, training, process testing, documentation, and integration with (and/or conversion from) legacy processes

Strategic thinking

With time, people in the firm routinely make their decisions within the framework of the firm's strategic vision and mission. Strategic planning becomes an organisational norm, deeply embedded within the firm's decision-making process, and participants learn to think strategically as part of their regular daily activities. Strategic thinking involves arraying options through a process of opening up institutional thinking to a range of alternatives and decisions that identify the best fit between the firm, its resources, and the environment. 

Strategic Management

The process of crafting and implementing an organisational “game plan” for:

• Creating customer value
• Sustaining competitive advantage
• Achieving performance targets

Strategy

A strategy serves as the foundation of a plan for achieving the vision, goals and objectives of an organisation. A plan outlines a list of specific actions required to successfully implement a specific strategy.

A good strategy needs to integrate an organisation's goals, policies, and action sequences (tactics) into a cohesive whole. The objective of a strategy is to provide a foundation from which an effective tactical plan is developed. This allows the organisation to carry out its mission effectively and efficiently.

Marketing strategies are partially derived from the broader corporate strategies, corporate missions, and corporate goals. They should flow from the firm's vision and mission statement.

Strategy is one element in a three-part structure.

First are the ends to be obtained.

Second.  Strategy is about means. It is about the attainment of ends.  It is concerned with how to achieve goals and objectives. It is the ways in which resources will be deployed.

Third are tactics, the ways in which resources that have been deployed are actually used or employed. 

From The MXpress short course "Thinking Strategically" 200 other courses www.marketing.org.au

On Marketing Strategy - Understanding the Environment - Terrain

The top strategists understood the need to know the terrain one operates in.

For firms fighting over the same market, the terrain that must be grasped and then exploited includes the market (profile), the environment (aks the landscape) eg politics, the economy and technology. That is the playing field on which enterprises succeed or fail but over which they have very little say. 


Machiavelli said on terrain. “He [the prince] should, therefore, never take his mind from this exercise of war, and in peacetime he must train himself more than in time of war.…He must also learn the nature of the terrain, and know how mountains slope, how valleys open, how plains lie, and understand the nature of rivers and swamps; and he should devote much attention to such activities. Such knowledge is useful in two ways: first, one learns to know one’s own country and can better understand how to defend it; second, with the knowledge and experience of the terrain, one can easily comprehend the characteristics of any other terrain that it is necessary to explore for the first time.…A prince who lacks this ability lacks the most important quality in a leader; because this skill teaches you to find the enemy, choose a campsite, lead troops, organize them for battle, and besiege towns to your advantage.” 


Sun Tzu devotes a chapter to terrain and the appropriate, associated tactics and strategies. “We may distinguish six kinds of terrain: accessible ground, entangling ground, temporizing ground, narrow passes, precipitous heights, positions at a great distance from the enemy.” Von Clausewitz offers: “There are certain constant factors in any engagement that will affect it to some extent…[one of] these factors [is] the locality or terrain…which can be resolved into a combination of the geographical surroundings and nature of the ground.” Notice the use of the expression “constant factors.” That is the notion of those things that cannot be controlled in a competitive environment; hence, they must be taken as a given by all competitors. Von Clausewitz also devotes a chapter to terrain, which he argues “bears a close and ever-present relation to warfare.” 

Dr Brian

CEO The Centre for Market Development - info@marketing.org.au

Twitter @smartamarketing https://twitter.com/#!/smartamarketing

Blog 1 http://www.smartamarketing.blogspot.com

Blog 2:  http://www.smartamarketing.wordpress.com

Data Analysis - Eye-balling your data for better understanding

The starting point for any data analysis should involve seeing what the data looks like.  This is called Eye Balling

There are quite sophisticated ways of eye-balling your data using mainly Exploratory Data Analysis. But this requires yet another level of statistical knowledge.

The informal approach to eye-balling starts with frequency distribution. You should always generate frequency distributions for your data.

The starting point for eye-balling is to simply inspect the type of distribution you have. You ask yourself the question : Are there any odd-bods?.

Technically, you are looking for outliers - cases which are extreme against the rest of the distribution. For example:

Rating	Frequency
1	20
2	37
3	28
4	12
5	8
6	2
7	7

This distribution could mean that there is a legitimate "lump" at the bottom end but it could also mean that you have a couple of cases which do not fit too well.

Another example could be:

Age	Frequency
18-25	100
25-30	57
31-35	22
36-40	8
41-45	0
46-50	0
51-60	3

The 3 cases in the 51-60 category are well outside the range for the rest of the sample. You would have to ask yourself Even if they belong to the sample, might they distort the result?

To check out possible outliers, you usually have to go back to your raw data and look at individual cases. Alternatively you can sort your data and look at the potential outliers in isolation from the rest.

What you are looking for is : 

dirty data

unexpected results

the missing cases you have for each item in the data base.

The shape of the distribution

The next thing to look at is the shape of the distribution: 

How flat is it - kurtosis

How much is it off centre - skew

When you have finished eye-balling your data, you have some basic ideas about how coherent your data base might be.

What you will be able to do is to say that you know that there is nothing odd about the data because you have been able to sort out any problems which have arisen. This means that whatever results you get you should be able to interpret them without worrying about data which might have distorted outcomes.