1338 Posts Found

Uncertainty is not only everywhere in and around strategy—it is the very reason we need strategy. Without uncertainty, we would just need a plan to go from A to B.

Content: Quotation | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subject: Strategy

Developing a great strategy starts with changing the dynamics in your strategy room. Here’s how.

Content: Article | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subject: Strategy

Business strategy, at its heart, is about beating the market; that is, defying the power of “perfect” markets to push economic surplus to zero. Economic profit—the total profit after the cost of capital is subtracted—measures the success of that defiance by showing what is left after the forces of competition have played out.

Content: Quotation | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subjects: Economics, Strategy

Corporations have pursued diversification strategies for decades as a means by which to create long-term value and achieve sustained growth. Historically, companies such as General Electric diversified via inorganic acquisitions, in addition to investing heavily in R&D programs.
 
We characterize these traditional diversification investment models as “Acquire” and “Invent.”
 
However, the evolution of the industrial landscape into one of increasing “convergence” and uncertainty has given rise to … [ Read more ]

Content: Article | Authors: Adnan Merhaba, Henry Bradley, Jaap Kalkman, Thomas Kuruvilla | Source: Arthur D. Little | Subject: Strategy

Developing a great strategy starts with changing the dynamics in your strategy room. Here’s how.

Content: Article | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subject: Strategy

When your company establishes a credible long-term strategy — including a way to play in the market and the capabilities to deliver — it sets up a high level of certainty. In valuation terms, your market value (your shareholders’ expectations) will more closely reflect your intrinsic value (the profits you consistently create). This is a tremendous source of strength, but it also triggers the paradox … [ Read more ]

Content: Article | Authors: Aaron Gilcreast, Larry Jones | Source: strategy+business | Subjects: Finance, Management, Strategy

Executives should be thinking about four different types of competition to maintain relevance in a changing environment. These four competition types can be positioned along two dimensions, which reflect two distinct questions: (1) “Are there customers for which to compete?” and (2) “Are we being outcompeted?”

These questions will help you identify the type of competition that currently exposes you to the greatest existential threats. … [ Read more ]

Content: Article | Author: Carsten Lund Pedersen | Source: Harvard Business Review | Subjects: Management, Strategy

Businesses with different financial profiles can tax managers and put performance at risk. When divesting isn’t an option, here’s how to manage the conflicts.

Content: Article | Authors: Dan P. Lovallo, Tim Koller, Zane Williams | Source: McKinsey Quarterly | Subjects: Finance, Management, Strategy

Lack of certainty about the future is the very reason you need a strategy. Instead, embrace probability.

Content: Article | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subject: Strategy

We identified ten performance levers and, importantly, how strongly you have to pull them to make a real difference in your strategy’s success. We divided these levers into three categories: endowment, trends, and moves. Your endowment is what you start with, and the variables that matter most are your revenue (size), debt level (leverage), and past investment in R&D (innovation). Trends are the winds that … [ Read more ]

Content: Article | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subject: Strategy

The moves that led to Nokia’s decline paint a cautionary tale for successful firms.

Content: Case Study | Author: Yves Doz | Source: INSEAD Knowledge | Subject: Strategy | Company: Nokia

More than 80 years ago, Nobel laureate Ronald Coase argued that companies establish their boundaries on the basis of transaction costs like these: when the cost of transacting for a product or service on the open market exceeds the cost of managing and coordinating the incremental activity needed to create that product or service internally, the company will perform the activity in-house. As digitization reduces … [ Read more ]

Content: Quotation | Authors: Miklos Dietz, Nicolaus Henke, Venkat Atluri | Source: McKinsey Quarterly | Subjects: Economics, Strategy

In the 1960s and 1970s, the hot concepts were the experience curve, the growth-share matrix, and SWOT (strengths, weaknesses, opportunities, and threats) analysis. The 1980s gave us five forces, value chain strategy, scenario planning, and total quality management. In the 1990s, business process engineering, customer loyalty, competing for time, competing for the future (core competencies), and growth horizons gained traction. Those ideas were followed by … [ Read more ]

Content: Quotation | Author: Ken Favaro | Source: strategy+business | Subject: Strategy

First-mover advantage doesn’t go to the first company that launches. It goes to the first company that scales.

Content: Quotation | Author: Reid Hoffman | Source: strategy+business | Subjects: Management, Strategy

Closing the gap between strategy and execution may not be about better execution after all, but rather about better learning — about more dialogue between strategy and operations, a greater flow of information from customers to executives, and more experiments. In today’s fast-paced world, strategy as learning must go hand in hand with execution as learning — bypassing the idea that either a strategy or … [ Read more ]

Content: Quotation | Author: Amy Edmondson | Source: Harvard Business Review | Subjects: Management, Strategy

Shareholders are not the only ones to benefit from the value created by a firm. Employees, customers and suppliers reap rewards, too. Introducing a new tool to measure value creation dynamically, over time: the Value Creation and Appropriation (VCA) model. IESE’s Roberto Garcia-Castro and co-authors discuss its practical implications for firm strategy.

Content: Article | Authors: Marvin B. Lieberman, N. Balasubramanian, Roberto García-Castro | Source: IESE Insight | Subjects: Finance, Management, Strategy

Despite strong pressures to focus on the short term, it is possible to manage for the long term and reap considerable rewards.

Content: Article | Authors: James Manyika, Sree Ramaswamy, Tim Koller | Source: McKinsey Quarterly | Subjects: Best Practices, Corporate Governance, Management, Strategy

Companies often fail to address the tough questions about strategy and execution: Are we really clear, as a leadership team, about how we choose to create value in the marketplace? Can we articulate the few things the organization needs to do better than anyone else in order to deliver on that value proposition? Are we investing in those areas, and do they fit with most … [ Read more ]

Content: Article | Author: Paul Leinwand | Source: Harvard Business Review | Subject: Strategy

Business leaders typically spend about 30 percent of their time on external engagement, but by their own assessment, few do so effectively. For more business leaders to “step up to the plate” and “play a key role in driving solutions,” they will need to do more to embed society’s concerns in their business priorities, to make external engagement an integral part of their strategy, and … [ Read more ]

Content: Quotation | Authors: Ezra Greenberg, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subjects: Social Responsibility (ESG), Strategy

To safeguard your company at the level of purpose, you must make strategy the servant rather than the master. Strategies are time-bound and target specific results. Your purpose, in contrast, is what makes you durably relevant to the world. Strategy is but one of several important means to operationalize your purpose. Intrinsic human connection to your purpose is even more important.

Content: Quotation | Author: Laurent Chevreux | Source: Harvard Business Review | Subject: Strategy