Strategies That fit Emerging Markets
Globalization: Critical Challenge
Quality of market infrastructure varies widely in developing markets
Successful companies must work around institutional voids – develop strategies so doing business in emerging markets - different from those they use at home.
Macro factors: degree of openness and the sociopolitical atmosphere
5 contexts framework
1. Political & Social Systems
Social environment, relationships between ethnic, regional and linguistic groups, power centers (media, bureaucracy), govt system
2. Openness
a. Perceived Openness vs. real Openness to foreign investment (China Vs. India)
3. Product Markets
Reliable consumer information, consumer research, market research and advertising is unreliable in developing countries, consumer reports which provide reliable, accurate inform on quality of product?
4. Labor markets: skilled workers?
Skilled, local managers, search firms and recruiting agencies in low-income countries?
5. Capital markets: lack of sophistication. Regulatory systems, credit rating agencies, local debit/equity capital to run businesses?
Institutional intermediaries vs. industry factors
Industry structures – degree of competition, should influence companies strategies.
Factors such as scale economies, entry parries and ability to differentiate – are important , but they vary in importance from one market to another.
Spot Institutional Voids by asking the right questions about – each of the 5 instuutional contexts
The 3 Strategy Choices
Compaies tailor stratgies to each countiry’s contexts. They can capitzliza on sthe strnghs of particular locations. In order to do so, they most compare the enbeintts of sodoign wso with additoao coordination costs they’ll incure. Tehre are 3 distinct choices
1. Adapt biz model to countires will keeping their core valuep ropsitions constant (e.g Macdonalds in Russia)
2. Try to change the Institutional contexts (STAR – Asian satellite TV – transformed the Indian market place, and drove a booming TV manufacturing industry, as well as the launch of several other satellite based channels, aimed at the Indian audiences). (Big 4 accounting firms set up offices in Brazil to provide global auality audit services. There by raising the financial reporting and auditing standards in brazil.
3. Stay out of the coutieis where adapting strateis may be uneconmical or imprttcial (or both). Home Depot tired setting up two stores in chille in 1998 and one in argentina. Both were sold at a net loss of $14M. Home Depot switched from a greenfield strategy to an acquisition approach – by buying a home improvmenet retailer in Mexico (total home). The compnaynow has 42 store sin mexico and is exploring the possitibllity fo entiering china, perhaps through an acquisition
Companies can’t use the same straties in all decveloing coutiresa, but they can generate synergies by treating diff markes as pasr o a system. (e.g – GE Healthcare makes parts for diagonstic machines in europe, asia and s/america.
Saturday, December 12, 2009
Sunday, November 29, 2009
Putting Leadership in Strategy
Strategy has been narrowed to a competitive game plan, divorcing it from a firms larger sense of purpose. Sustainable competitive advantage is important, but it’s not (in of itself), a Strategy.
Strategy is not just a plan, it’s a way of life for a company. It doesn’t just position a firm in its external landscape, it defines what a firm will bee – what it can be. It’s the CEO’s job to set the strategy, outwit the competition. It’s also his or her greatest opportunity to shape the firm’s future.
In order to claim value – firms must first create value “Brandenburger & Nalebuff”. This requires bring something new to the Arena – some new value proposition, some new product or a new way of delivering a service! Bring something customers want that is different from or better than what others are providing.
Value Related Questions
1. If your company were shuttered, to whom would it matter and why?
2. Which of your customers would miss you the most, and why?
3. How long would it take for another firm to step into that void?
What’s truly distinctive about your value proposition?
Purpose should be at the heart of strategy – it should give direction to every part of the firm – from the cooperate office to the loading dock. It should define the nature of the work what must be done.
“A business has to have a clear purpose. If the purpose is not crystal clear, people in business will not understand what kind of knowledge is critical and what they have to learn in order to improve performance.
A company’s suppose is what makes it distinctive. It what we as a company exist to achieve and what we’re willing and not willing to do to achieve it “ John Browne – former CEO of British Petroleum
An organic conception of strategy recognizes that whatever consitutesstrategic advantage will eventually change.
Leaders need to recognize the difference between defending a firms added valjue as established at aany given moment and ensuring that a fir is adding value over time.
“the need to create and re-create reaons for a company’s continued existience sets the strategies apart from every other individual in the company”
Strategy is not just a plan, it’s a way of life for a company. It doesn’t just position a firm in its external landscape, it defines what a firm will bee – what it can be. It’s the CEO’s job to set the strategy, outwit the competition. It’s also his or her greatest opportunity to shape the firm’s future.
In order to claim value – firms must first create value “Brandenburger & Nalebuff”. This requires bring something new to the Arena – some new value proposition, some new product or a new way of delivering a service! Bring something customers want that is different from or better than what others are providing.
Value Related Questions
1. If your company were shuttered, to whom would it matter and why?
2. Which of your customers would miss you the most, and why?
3. How long would it take for another firm to step into that void?
What’s truly distinctive about your value proposition?
Purpose should be at the heart of strategy – it should give direction to every part of the firm – from the cooperate office to the loading dock. It should define the nature of the work what must be done.
“A business has to have a clear purpose. If the purpose is not crystal clear, people in business will not understand what kind of knowledge is critical and what they have to learn in order to improve performance.
A company’s suppose is what makes it distinctive. It what we as a company exist to achieve and what we’re willing and not willing to do to achieve it “ John Browne – former CEO of British Petroleum
An organic conception of strategy recognizes that whatever consitutesstrategic advantage will eventually change.
Leaders need to recognize the difference between defending a firms added valjue as established at aany given moment and ensuring that a fir is adding value over time.
“the need to create and re-create reaons for a company’s continued existience sets the strategies apart from every other individual in the company”
Saturday, October 24, 2009
Creating a Balanced Scorecard - (e Chapter 2)
Sound strategy helps to create a position of sustainable competitive advantage in the market place – which should result in superior performance.
1. What are the 3 aspects of performance which are important to consider – from a strategic point of view.
ð Note: Strategy should be assessed by a balance of both customary financial and emerging nonfinancial measures.
ð Economic Profit: the residual income above and beyond normal profit that accrues to owners, deriving from eh prowess of management in planning, supervision and control.
ð Residual income associated with economic profit occurs when a company’s return on equity (ROE) is greater than its cost of equity capital.
ð Normal Profit: may be viewed as the minimum return earned by a company that is necessary y to attract and secure the owners inputs.
2. ROE [Profitability, asset productivity & financial leverage].
3. Why is revenue growth such an important financial indicator for CEOs & Strategists?
4.
ð Revenue growth often occurs at the expense of growth in profitability, since the factors that generally drive up sales (marketing, advertising, investment in product development and sales forces), often add expenses which diminish the bottom line.
ð Common Stock Returns: take into account both the dividends paid by a company to its shareholders as well as increases in prices of shares
ð Market Capitalization: defined as the market value of outstanding shares of stock – also depends on stock price and characterizes the total value of the company.
ð Quantitative & Qualitative Performance – is the key outcome of interest for those studying strategy and managing strategy.
What are the 3 key dimensions of performance which we can use to develop balanced scorecards?
1. Summary measures that reflect the impact of integrated efforts across the entire company
2. Measures that can be compare to competitors
3. Measures that account for longer periods of time.
The current school of thought indicates that companies would be best served by focusing not just on the returns to shareholders but also by paying attention to the needs and requirements of important stakeholders as well. This approach can help create profitable new growth opportunities and strengthen existing franchises.
1. What are the 3 aspects of performance which are important to consider – from a strategic point of view.
ð Note: Strategy should be assessed by a balance of both customary financial and emerging nonfinancial measures.
ð Economic Profit: the residual income above and beyond normal profit that accrues to owners, deriving from eh prowess of management in planning, supervision and control.
ð Residual income associated with economic profit occurs when a company’s return on equity (ROE) is greater than its cost of equity capital.
ð Normal Profit: may be viewed as the minimum return earned by a company that is necessary y to attract and secure the owners inputs.
2. ROE [Profitability, asset productivity & financial leverage].
3. Why is revenue growth such an important financial indicator for CEOs & Strategists?
4.
ð Revenue growth often occurs at the expense of growth in profitability, since the factors that generally drive up sales (marketing, advertising, investment in product development and sales forces), often add expenses which diminish the bottom line.
ð Common Stock Returns: take into account both the dividends paid by a company to its shareholders as well as increases in prices of shares
ð Market Capitalization: defined as the market value of outstanding shares of stock – also depends on stock price and characterizes the total value of the company.
ð Quantitative & Qualitative Performance – is the key outcome of interest for those studying strategy and managing strategy.
What are the 3 key dimensions of performance which we can use to develop balanced scorecards?
1. Summary measures that reflect the impact of integrated efforts across the entire company
2. Measures that can be compare to competitors
3. Measures that account for longer periods of time.
The current school of thought indicates that companies would be best served by focusing not just on the returns to shareholders but also by paying attention to the needs and requirements of important stakeholders as well. This approach can help create profitable new growth opportunities and strengthen existing franchises.
Are you sure you have a strategy? (Hambrick & Fredrickson)
Framework for Strategy Design – based on 5 elements
[Arenas, vehicles, differentiators, staging & economic logic]
1. What actually constitutes strategy?
2. What are the 5 key elements of strategy?
Arenas: Be specific about where you will be active, what areas/categories you will emphasize. Strategy may be centered on one product or one category or one customer segment
[Product Categories, market segments, geographic regions, core technologies, value creation stages?? Key product or complementary one?
Vehicles: how do you intend to attain a significant business presence in your chosen Arena?
(Joint Ventures, strategic alliances, acquisitions, R&D, Product Development, Marketing, Globalization)?
Differentiators: Image, customization, price, styling, quality, reliability? What is the value proposition?
“Arena’s, Differentiators & Vehicles – constitute the “substance of strategy”.
Staging: Set priorities – what do we do first? What’s the plan of a record? What is the sequence by which we entire a specific arena? How quickly do we move? What’s our time horizon?
[Key influencing factors include: Funding, Urgency – i.e. first mover advantage? achievement of credibility]. Sometimes the pursuit of early wins is also important because it can help build momentum.
Economic Value: How will profits be generated? What’s our biz model and how does it tie in to the other 4 elements? What’s our pricing strategy?
o Economic logic analytics, results in a determination of how profit will be generated. That could happen on the front end, through aggressive pricing, or on the back end by effectively monitoring costs
Note: Strategy is not primarily about planning- it’s about intentional, informed, and integrated choices. The strategy diamond featuring the 5 strategic elements is a basis for creating a well thought out intentional, informed and plan.
[Arenas, vehicles, differentiators, staging & economic logic]
1. What actually constitutes strategy?
2. What are the 5 key elements of strategy?
Arenas: Be specific about where you will be active, what areas/categories you will emphasize. Strategy may be centered on one product or one category or one customer segment
[Product Categories, market segments, geographic regions, core technologies, value creation stages?? Key product or complementary one?
Vehicles: how do you intend to attain a significant business presence in your chosen Arena?
(Joint Ventures, strategic alliances, acquisitions, R&D, Product Development, Marketing, Globalization)?
Differentiators: Image, customization, price, styling, quality, reliability? What is the value proposition?
“Arena’s, Differentiators & Vehicles – constitute the “substance of strategy”.
Staging: Set priorities – what do we do first? What’s the plan of a record? What is the sequence by which we entire a specific arena? How quickly do we move? What’s our time horizon?
[Key influencing factors include: Funding, Urgency – i.e. first mover advantage? achievement of credibility]. Sometimes the pursuit of early wins is also important because it can help build momentum.
Economic Value: How will profits be generated? What’s our biz model and how does it tie in to the other 4 elements? What’s our pricing strategy?
o Economic logic analytics, results in a determination of how profit will be generated. That could happen on the front end, through aggressive pricing, or on the back end by effectively monitoring costs
Note: Strategy is not primarily about planning- it’s about intentional, informed, and integrated choices. The strategy diamond featuring the 5 strategic elements is a basis for creating a well thought out intentional, informed and plan.
Understanding Industry Culture (Michael Porter)
1. What is the essence of the job of a strategist?
2. What are the 5 basic competitive forces of an industry?
Threat of new entrants
Bargaining Power of Customers
Bargaining Power of Suppliers
Threat of substitutes
Competition from other players / competitors
3. What are the barriers to entry?
[Supply side economies of scale, Demand side benefits of scale, customer switching costs, capital requirements, restrictive govt policy, unequal access to distribution channels]
4. Power of suppliers:
{Bargaining power prices, shifting costs downstream, limiting quality of goods/services, supplier offers differentiated products, and buyer is dependent on supplier
5. Power of Customers : (corporate customers and consumers)
6. Threat of substitutes: A substitute performs the same or similar functions as an industry’s product =- but by a different means. [Substitutes limit profits and constrain the size of an industry. Some are subject to trends improving price/performance. Substitutes drive fierce competition.
7.
8. Rivalry from competitors: [Price discounting, new product introductions, advertising campaigns, service escalation – different value proposition}
Intensity of competitive rivalry can undermine an industry’s profit potential. The degree to which this can happen depends first on the bases on which the companies compete and on the intensity with which they do so.
Price is typically the most destructive basis of competition for industry profitability. Price reduction transfers profits from an industry to customer savings in the hands of customers. Price wars are common in cases where there’s not much differentiation, switching costs are similar for all competitors, buyers can shift to different vendors or products, fixed costs are high and marginal cost are low.
Intensity of competition is great where there are numerous competitors, industry growth is slow, exit barriers are high, and rivals are committed to the business
9. What are complements and how do they affect industries?
Note: Effective strategist look for opportunities to alter conditions in complementary industries in their favor, by boosting demand, improving overall structure or advancing a firms standing within its industries.
10. What are the implications of Industry Structure – for strategists
Industry structure provides a baseline for sizing up a company’s strengths and weaknesses. It guides managers toward possibilities for strategic action – including1. Positioning the company vis-à-vis the current competitive forces, 2, anticipating shifts in the forces and exploiting them, 3., shaping the balance of forces to create a new, more favorable structure or on that favors the company
Industry structure thinking reveals differences in customers, suppliers, substitutes, potential entrants and rivals that demark distinct competitive arenas in which distinct strategies are needed. It’s important to thing structurally about competition.
2. What are the 5 basic competitive forces of an industry?
Threat of new entrants
Bargaining Power of Customers
Bargaining Power of Suppliers
Threat of substitutes
Competition from other players / competitors
3. What are the barriers to entry?
[Supply side economies of scale, Demand side benefits of scale, customer switching costs, capital requirements, restrictive govt policy, unequal access to distribution channels]
4. Power of suppliers:
{Bargaining power prices, shifting costs downstream, limiting quality of goods/services, supplier offers differentiated products, and buyer is dependent on supplier
5. Power of Customers : (corporate customers and consumers)
6. Threat of substitutes: A substitute performs the same or similar functions as an industry’s product =- but by a different means. [Substitutes limit profits and constrain the size of an industry. Some are subject to trends improving price/performance. Substitutes drive fierce competition.
7.
8. Rivalry from competitors: [Price discounting, new product introductions, advertising campaigns, service escalation – different value proposition}
Intensity of competitive rivalry can undermine an industry’s profit potential. The degree to which this can happen depends first on the bases on which the companies compete and on the intensity with which they do so.
Price is typically the most destructive basis of competition for industry profitability. Price reduction transfers profits from an industry to customer savings in the hands of customers. Price wars are common in cases where there’s not much differentiation, switching costs are similar for all competitors, buyers can shift to different vendors or products, fixed costs are high and marginal cost are low.
Intensity of competition is great where there are numerous competitors, industry growth is slow, exit barriers are high, and rivals are committed to the business
9. What are complements and how do they affect industries?
Note: Effective strategist look for opportunities to alter conditions in complementary industries in their favor, by boosting demand, improving overall structure or advancing a firms standing within its industries.
10. What are the implications of Industry Structure – for strategists
Industry structure provides a baseline for sizing up a company’s strengths and weaknesses. It guides managers toward possibilities for strategic action – including1. Positioning the company vis-à-vis the current competitive forces, 2, anticipating shifts in the forces and exploiting them, 3., shaping the balance of forces to create a new, more favorable structure or on that favors the company
Industry structure thinking reveals differences in customers, suppliers, substitutes, potential entrants and rivals that demark distinct competitive arenas in which distinct strategies are needed. It’s important to thing structurally about competition.
Thursday, October 22, 2009
RIM Case Study
I.How important is it for RIM to grow its pool of software developers?
It’s very important that RIM grow it’s pool of software developers for a number of reasons:
With ’07 revenues up 98% YoY, the current team of 1.400 software engineers are less than 50% of the figure required to drive engineering innovations and technological advances – required to maintain current growth rates and profit margins
Similar to its competitors – RIM’s policy is to maintain its R&D spending as a consistent percentage of total sales. Investment analysts often looked to this number to gauge the sustainability of revenue growth
R&D expenses are often seen as a proxy for new product or service development and therefore used as a key indicator of future revenue potential
II.What are the different options for substantially increasing the number of software developers?
RIM faces 3 key options – in its quest to increase the number of software developers which it can hire
Change or Optimize Hiring Practices
Recruit aggressively from Waterloo and other nation –wide campuses, in Canada. (by expanding its co-op programs to more universities and creating incentives for more students to join the co-op program
Form a global scouting group – dedicated to finding the best talent worldwide and bringing them into RIM (value proposition would be RIM’s org culture, which is very favorable to engineers – and the allure of Waterloo / Canada
RIM can vastly Improve its hiring processes by better managing the qualified pool of candidates who apply for engineering jobs, every year. RIM can utilize online job sites, exec search firms which specialize in technology jobs and even revamp its own career website in order to make its overall hiring experience, more efficient
Grow & Expand Existing Geographies
RIM can expand its existing Product & Tech Devpt facilities, across Canada and the U.S – and actively recruit engineers for those locations.
Increase Acquisitions
Bring has already had some success by bringing in new people through acquisitions. In order to maintain its current rate of innovation and support revenue growth, RIM may need to consider some strategic acquisitions – in geographic locations which attract strong engineering talent. European technology companies offer good opportunities – many eastern European nations have a lot of engineers and these markets are often hard to penetrate because of the nationalistic tendencies of European consumers
Go Global? Not possible – RIM’s technology is too valuable and it may be at risk, if RIM were to allow engineers across south east Asia, to have access to it. RIM could outsource some project mgt and process driven work to Asian subs – but that may not help with the engineering (R&D) problem.
III.
Which option(s) should RIM pursue? Why?
RIM should pursue the following options
1.Change or Optimize Hiring Practices: Clearly there is an opportunity to improve efficiency in the hiring process and capture more talented technologists. This opportunity exists today and does not require significant investment – just some progressive thinking and better organizational structure
Recruit aggressively from Waterloo and other nation –wide campuses, in Canada. (by expanding its co-op programs to more universities and creating incentives for more students to join the co-op program. Expand this initiative to include aggressive recruitment of engineering students at the undergrad and postgraduate level, from U.S & European Universities.
Form a global scouting group – dedicated to finding the best talent worldwide and bringing them into RIM (value proposition would be RIM’s org culture, which is very favorable to engineers – and the allure of Waterloo / Canada ( RIM should Start developing relationships with the top 20 technology universities in Europe, N/America, Asia and Africa)
RIM can vastly Improve its hiring processes by better managing the qualified pool of candidates who apply for engineering jobs, every year. RIM can utilize online job sites, exec search firms which specialize in technology jobs and even revamp its own career website in order to make its overall hiring experience, more efficient
2.Grow & Expand Existing Geographies – (Increase Acquisitions & technology develop partnerships): Strategic acquisitions help RIM solve two key issues – the company can gain almost instant access to new engineering talent – and if the purchase is a strategic one – they can mine the geographic regions where the companies are located, for more talent). RIM can expand its existing Product & Tech Devpt facilities, across Canada and the U.S – and actively recruit engineers for those locations.
Bring has already had some success by bringing in new people through acquisitions. In order to maintain its current rate of innovation and support revenue growth, RIM may need to consider some strategic acquisitions – in geographic locations which attract strong engineering talent. European technology companies offer good opportunities – many eastern European nations have a lot of engineers and these markets are often hard to penetrate because of the nationalistic tendencies of European consumers
IV.
How would you recommend Yach begin to implement the option you recommended? (Be as detailed and specific as possible.)
The Challenge: Yach needs to expand the base of engineers at RIM who would be focused on research, product development of hardware and software applications for the future. Given RIM’s 98% increase in revenue and positive forecast.
First: Yach needs to review his current plans and commitments for R&D and Product Development and determine his priorities for the next 2 years – he must do so, taking in to account RIMs 1st quarter revenue projections of $2.2B and the fact that another $2.2B in revenue from new subscribers, is expected in the next fiscal year.
Next, Yach must immediately determine the level of resources required to maintain the existing RIM infrastructure (hardware - handsets, software and services). Next – he must determine his big bets for the next 2 years and boldly outline the amount of resources he would need in order to accomplish his goals. (1000 new engineers, 2,500, 3,000? (How many of these engineers could be new graduates vs. leaders/experienced technologists who would be thought leaders in the RIM organization
Once Yach has determined the number of engineers required and the mix of youth vs. experience – he can share that vision with Mike and the senior leadership team. Yach should recommend that the company undergo a two tier approach in order to recruit the necessary talent.
It’s very important that RIM grow it’s pool of software developers for a number of reasons:
With ’07 revenues up 98% YoY, the current team of 1.400 software engineers are less than 50% of the figure required to drive engineering innovations and technological advances – required to maintain current growth rates and profit margins
Similar to its competitors – RIM’s policy is to maintain its R&D spending as a consistent percentage of total sales. Investment analysts often looked to this number to gauge the sustainability of revenue growth
R&D expenses are often seen as a proxy for new product or service development and therefore used as a key indicator of future revenue potential
II.What are the different options for substantially increasing the number of software developers?
RIM faces 3 key options – in its quest to increase the number of software developers which it can hire
Change or Optimize Hiring Practices
Recruit aggressively from Waterloo and other nation –wide campuses, in Canada. (by expanding its co-op programs to more universities and creating incentives for more students to join the co-op program
Form a global scouting group – dedicated to finding the best talent worldwide and bringing them into RIM (value proposition would be RIM’s org culture, which is very favorable to engineers – and the allure of Waterloo / Canada
RIM can vastly Improve its hiring processes by better managing the qualified pool of candidates who apply for engineering jobs, every year. RIM can utilize online job sites, exec search firms which specialize in technology jobs and even revamp its own career website in order to make its overall hiring experience, more efficient
Grow & Expand Existing Geographies
RIM can expand its existing Product & Tech Devpt facilities, across Canada and the U.S – and actively recruit engineers for those locations.
Increase Acquisitions
Bring has already had some success by bringing in new people through acquisitions. In order to maintain its current rate of innovation and support revenue growth, RIM may need to consider some strategic acquisitions – in geographic locations which attract strong engineering talent. European technology companies offer good opportunities – many eastern European nations have a lot of engineers and these markets are often hard to penetrate because of the nationalistic tendencies of European consumers
Go Global? Not possible – RIM’s technology is too valuable and it may be at risk, if RIM were to allow engineers across south east Asia, to have access to it. RIM could outsource some project mgt and process driven work to Asian subs – but that may not help with the engineering (R&D) problem.
III.
Which option(s) should RIM pursue? Why?
RIM should pursue the following options
1.Change or Optimize Hiring Practices: Clearly there is an opportunity to improve efficiency in the hiring process and capture more talented technologists. This opportunity exists today and does not require significant investment – just some progressive thinking and better organizational structure
Recruit aggressively from Waterloo and other nation –wide campuses, in Canada. (by expanding its co-op programs to more universities and creating incentives for more students to join the co-op program. Expand this initiative to include aggressive recruitment of engineering students at the undergrad and postgraduate level, from U.S & European Universities.
Form a global scouting group – dedicated to finding the best talent worldwide and bringing them into RIM (value proposition would be RIM’s org culture, which is very favorable to engineers – and the allure of Waterloo / Canada ( RIM should Start developing relationships with the top 20 technology universities in Europe, N/America, Asia and Africa)
RIM can vastly Improve its hiring processes by better managing the qualified pool of candidates who apply for engineering jobs, every year. RIM can utilize online job sites, exec search firms which specialize in technology jobs and even revamp its own career website in order to make its overall hiring experience, more efficient
2.Grow & Expand Existing Geographies – (Increase Acquisitions & technology develop partnerships): Strategic acquisitions help RIM solve two key issues – the company can gain almost instant access to new engineering talent – and if the purchase is a strategic one – they can mine the geographic regions where the companies are located, for more talent). RIM can expand its existing Product & Tech Devpt facilities, across Canada and the U.S – and actively recruit engineers for those locations.
Bring has already had some success by bringing in new people through acquisitions. In order to maintain its current rate of innovation and support revenue growth, RIM may need to consider some strategic acquisitions – in geographic locations which attract strong engineering talent. European technology companies offer good opportunities – many eastern European nations have a lot of engineers and these markets are often hard to penetrate because of the nationalistic tendencies of European consumers
IV.
How would you recommend Yach begin to implement the option you recommended? (Be as detailed and specific as possible.)
The Challenge: Yach needs to expand the base of engineers at RIM who would be focused on research, product development of hardware and software applications for the future. Given RIM’s 98% increase in revenue and positive forecast.
First: Yach needs to review his current plans and commitments for R&D and Product Development and determine his priorities for the next 2 years – he must do so, taking in to account RIMs 1st quarter revenue projections of $2.2B and the fact that another $2.2B in revenue from new subscribers, is expected in the next fiscal year.
Next, Yach must immediately determine the level of resources required to maintain the existing RIM infrastructure (hardware - handsets, software and services). Next – he must determine his big bets for the next 2 years and boldly outline the amount of resources he would need in order to accomplish his goals. (1000 new engineers, 2,500, 3,000? (How many of these engineers could be new graduates vs. leaders/experienced technologists who would be thought leaders in the RIM organization
Once Yach has determined the number of engineers required and the mix of youth vs. experience – he can share that vision with Mike and the senior leadership team. Yach should recommend that the company undergo a two tier approach in order to recruit the necessary talent.
Sunday, October 11, 2009
Putting Leadership Back Into Strategy
Strategy has been narrowed to a competitive game plan, divorcing it from a firms larger sense of purpose. Sustainable competitive advantage is important, but it’s not (in of itself), a Strategy. Strategy is not just a plan, it’s a way of life for a company. It doesn’t just position a firm in its external landscape, it defines what a firm will bee – what it can be. It’s the CEO’s job to set the strategy, outwit the competition. It’s also his or her greatest opportunity to shape the firm’s future. In order to claim value – firms must first create value “Brandenburger & Nalebuff”. This requires bring something new to the Arena – some new value proposition, some new product or a new way of delivering a service! Bring something customers want that is different from or better than what others are providing. Value Related Questions 1. If your company were shuttered, to whom would it matter and why? 2. Which of your customers would miss you the most, and why? 3. How long would it take for another firm to step into that void? What’s truly distinctive about your value proposition? Purpose should be at the heart of strategy – it should give direction to every part of the firm – from the cooperate office to the loading dock. It should define the nature of the work what must be done. “A business has to have a clear purpose. If the purpose is not crystal clear, people in business will not understand what kind of knowledge is critical and what they have to learn in order to improve performance. A company’s suppose is what makes it distinctive. It what we as a company exist to achieve and what we’re willing and not willing to do to achieve it “ John Browne – former CEO of British Petroleum An organic conception of strategy recognizes that whatever consitutesstrategic advantage will eventually change. Leaders need to recognize the difference between defending a firms added valjue as established at aany given moment and ensuring that a fir is adding value over time. “the need to create and re-create reaons for a company’s continued existience sets the strategies apart from every other individual in the company”
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