Modules 3-6: The Ultimate Cheat Sheet
Modules 3-6: The Ultimate Cheat Sheet
All lecture notesModule 3
In this module, you will learn how to engage with strategic analysis, setting you up to form and implement strategies. With a clear understanding of the importance of strategic analysis, you will learn how to apply commonly used analysis techniques and typologies to your focus organisation, evolving your analysis throughout the module. The primary focus will be on understanding the organisations current state and then using your newly learned techniques to interrogate its effectiveness, agility and fit within the market. By developing both micro and macro perspectives of your organisations model, you will learn to identify opportunities and challenges for the organisation from various standpoints. In applying these techniques and building out the analysis of your focus organisations strategic position, you will also be setting yourself up to complete the first assignment.
In this module, you will:
develop an understanding of how to conduct strategic analysis and the role it plays in effective strategy formulation and implementationdeepen your understanding of the business model canvas and explore a range of other analysis tools that drive insights about the organisation and its fit with the competitive environment.
1
3.1 Provocation
In the following video, Caroline Sanz and Dr Jonathan Matheny discuss strategy as reification, the need for clear purpose and/or objective when undertaking strategic analysis and the need to interrogate the BMC, an act that is more than 'just filling in a canvas'.
Strategic analysis (2020) created by Monash Online
3.2
3.2 Introduction to strategic analysis
In Module 2 you learned about the strategic process, which is more commonly understood to comprise four interdependent and iterative components that simultaneously align, as learning from each informs the others leading to a deliberately emergent and adaptive approach to strategy rather than one that is linear and predictable.
Make your way througheach of the chapters ofIntroduction to strategic analysis,using the following links, to learn more about strategic analysis, the questions you will need to ask and how you can use these tools to develop a deep understanding of the implementation of strategy within an organisation.
What is strategic analysis?Understand and use analysis tools wisely.
Establish focus with strategic questions.
Looking inwards and looking outwards.
3.3
3.3 Strategic analysis Looking inYou were briefly introduced to the business model canvas at the end of Module 2, applying your initialunderstanding of it to the case study of IKEA. In this module, you will be going deeper into thepractice of using the business model canvas, popularly known as the 'BMC', to help you flesh outthe inner working of your focus organisation and creating a springboard for deeper analysis. ABMC will also be part of your first assessment, so this should help you develop thefoundational thinking in preparation.
Practical in both its application and nature, the BMC is a strategic business tool that was co-createdby over 470 practitioners, over 45 continents and authored by Alexander Osterwalder and YvesPigouer in their handbook, Business Model Generation 1. Aptly, they define a business model as 'describing the rationale of how an organisation creates, delivers and captures value', with the BMCproviding a visual aid that demonstrates, across nine boxes, this organisational understanding on apage.
Designed to be a shared language amongst stakeholders, the BMC allows for a common and easy-to-understand starting point for challenging assumptions, identifying gaps, pain points and gaincreators and understanding how different parts of the model are connected. However, its utility isnot bound to just strategic analysis it is also able to be used as a tool to manipulate current models, ideateon new ones or act as a blueprint for a strategy to be implemented through organisationalstructures, systems and processes.
3.4
INCLUDEPICTURE "https://learning.monash.edu/pluginfile.php/2441563/mod_label/intro/Pen.svg" * MERGEFORMATINET 3.4 Activity: Build your business model canvasYou will use apersonalMiro board to complete this taskPurpose
To further familiarise yourself with how the BMC is used, you will complete a BMC for your focus organisation. This is a guided activity which will take you through each element of the canvas, providing prompts and examples along the way to support your use of the canvas.
For this activity, you will be stepped through how to build your BMC forAssessment 1:Business model canvas and analysis report. You will utilise a pre-set template in Miro and follow along with instructions on this pagein order to sequentially complete the document.
To successfully complete this activity, you will have needed to have completed steps 1-3 ofAssessment 1:Business model canvas and analysis reportas outlined in the assessment details.
This activity supportsunit learning outcomes 1, 2 and 3.
This should take approximately 2 hours to complete.
Task
Step 1: Collateall of the information you have about your focus organisation.
Step 2: Log into Miro. This activity will use the LEO5002 Personal board in Miro that you utilised for your activities in Module 2. Navigate to 3.4 Activity: Build your business model canvas.
Step 3: Selectthe hotspots in the following image starting at the sticky note labelled 1. You will need to sequentially complete your businesses model canvas, being provided instructions about how to best approach each specific element of the canvas. The notes will also provide you with examples, using the IKEA case study to illustrate the essence of that element. Enter insights pertinent to your chosen organisation into your canvas template as you follow along.
3.4 Business model canvas text alternative
1. Intent
Explanation:It always helps to frame your BMC with the business intent. This is a statement that presents their mission, why they exist, what business they see themselves in. Here is where you should also highlight their beneficiaries, who they are hoping to serve (particularly pertinent for for-purpose organisations).
Prompts:
Why does your organisation exist?
What is their key mission or purpose?
How do they identify themselves as an organisation?
Examples:
IKEA: Create a better every day for the many people.
IKEA offers a wide range of well-designed, functional furniture and accessories at affordable prices so that they are accessible to as many people as possible. They talk about providing a better everyday life and present their 'IKEA way' and 'Democratic Design tool' as part of their commitment to ensure they can fulfil their mission of making great design available to everyone.
2.Customer segments
Explanation:
Your first task is to determine who is our customer? Without that piece of information, all the other parts of the canvas are useless a model or strategy is only good if it matches your customers preferences and understanding of value. Customer segments detail the people for whom your business model provides value for; they are the ones making the purchasing decision. You should seek to detail who they are and categorise them by defining features such as behavioural and attitudinal traits, not just their demographics. It is worth noting that customers may also be users or beneficiaries, but the focus in this section is highlighting those segments that are your key decision-makers or those who are transacting.
Prompts:
Who are the segments most likely to pay for the services/products you offer?
How do we describe each segment?
What behaviours, demographics or attitudes distinguish them?
Are they separate from the end user and/or beneficiary?
What attitudes, perspectives or beliefs do they have that would lead them to see value in what we offer?
Examples:
Cities with a population over 500,000 are their target locations. IKEA seeks to serve 3 kinds of people:
people who seek a designer feel that isaffordablepeople seekinglow costfit outspeople who want options and inspiration
In terms of their product range, IKEA have things to suit just about everyone, but they ensure that their value propositions always align to these three types of people.
3. Value propositions
Explanation:
Without a doubt, developing solid value propositions is the hardest, most misunderstood task in creating a BMC. The first thing we need to do is create a unique value proposition for each customer segment. Different segments will have different motivations and perceptions of value, so we need to look at value propositions through the eyes of each segment and draw out the most important value propositions for them.
A value proposition is always serving a particular purpose for the customer, sometimes known as a 'job to be done', andis often framed as either creating some kind of gain or relieving some kind of pain in completing that 'job'. Importantly, a value proposition is not a product/service feature, but an articulation of the value that feature is providing for the customer.
Prompts:
What social and emotional factors are driving your customers?
What jobs does my customer have to do?
What are the pains they are trying to relieve or the gains they are seeking?
What does my customer want and why do they want that? And why do they really want that?
Examples:
For some,itsthe satisfaction of building it yourself; developing furniture that anyone could assemble in their own household easily picked up and ready to go, presenting a mixture of pride and money saved (commonly coined as 'the IKEA effect').For others it is the wander around the store for inspiration;design advice that is free and allows you to find ideas that will make your home feel modern, comfortable and inviting.
4. Customer relationships
Explanation:
This section details the type of relationship our business intends (or needs) to have with our customers. Your relationship approach should align to and reinforce the needs and value your customer segments are looking for. You need to determine the type of interaction they are seeking, the frequency of their engagement with you and whether it is something ongoing, seasonal or once-off. This section examines the experience your customers are seeking and identifies how you intend to build and maintain a relationship with them that meets their needs as they journey through that experience.
Prompts:
How do we keep them engaged and satisfied beyond purchase?
What is the nature of our relationship with our customers?
Are they seeking a personal, transactional or automated interaction?
What do they expect of our engagement and communication with them? How do we address their key 'moments that matter' throughout their experience with us?
Examples:
Connected to their value propositions of affordable, money saving and inclusive, their IKEA Family Loyalty program is open to anyone for free, providing exclusive discounts and rewards for purchasing, inspiring events and workshops, and 'surprises' throughout the year.
For those who are not seeking DIY or the wandering experience, they offer delivery andassemblyor you can enter via the exit and have direct access to everything you need without the fuss.
Store attendants areminimised, andarent in your face trying to sell you things. They are purely there to help and will stay out of your way unless called upon. They are also placed in areas where more support is needed, such as at entry to guide you or answer questions upfront, or at checkout where you might need a hand with your purchasing or logistics.
Restaurant andchild careare available and affordable to make the whole experience easy, hassle free and able to fit into your day with ease, again, reducing barriers to entry. Virtual interior design and planning services to support those that want the look butdonthave the expertise or the budget.
Business solutions to support full officefitouts.
Buy back, sustainability and charitable initiatives to help customers connect with their sustainability values through purchasing.
5. Channels
Explanation:
Simply put, channels describe the way you deliver your value proposition to each customer segment.Yourechoosing the most appropriate channel for your customer based on how they prefer to operate and the value theyre looking for. Channel selection should be specific to your customers preferences as it is your gateway to exchanging value with them. Misaligned channels could see a lot of money spent on products that might be a perfect fit, but never reach their target customer. Understanding the customer experience is crucial here, as your channels are the touchpoints your customer engages with to experience the value you have to offer not just at purchase, but throughout their relationship with you.
Prompts:
Where do we first engage our customers? (ouracquisition channels)
How do our customers find us?
How do we entice our customers?
How do we physically provide our products/services to our customers? (deliverychannel)
Who are their trusted sources and are we connected to them?
Examples:
The superstores, located in reach but usually in the suburbs, where more peopleliveand they have the space to offer all options. Their back up warehouses nearby, for items that are a bit bigger or not as high in demand. Their catalogue looks like a lifestyle magazine, for those that just want to peruse or for those that want toplan ahead. It includes where to find the items, so you can take it with you in store and be guided without needing to ask questions. Their website operates much the same, providing the same detailed information as well as online tutorials, workshops and user manuals. IKEA Family Subscription emails that are customisable, to suit your needs.
6. Key activities
Explanation:
Organisations need to do a lot to deliver on their value propositions and customer experience expectations. That said, as highlighted by David Ogilvy, 'Strategy is sacrifice'. A solid strategy should indicate which activities wewontdo, in order to really maximise the ones that are most important to our business models success. Key activities in a business model canvas detail the activities you need to do in order to deliver what you have promised as an organisation. They are the activities thatcantbe substituted by others and, whether visible or not, make your offering valuable.
Prompts:
What do you need to do within your business to deliver this value?
What is unique about your approach that helps you meet yourcustomersneeds or expectations, or preferences?
What are the most important things your team needs to focus on to deliver your promised value or experience thatcantbe done by others?
Examples:
IKEA focuses relentlessly on minimising production costs through design, research and development, and spends almost no time on assembly. This is also critical to the success of its value proposition. Market-specific research and feedback system to meet differing market preferences IKEA has a strong hold on its supply chain management given its extensive range of suppliers and distributors Partnership management, for design, charity and collaboration partnerships that enhances IKEA value propositions.
7. Key resources
Explanation:
The key resources for your business model are the almost irreplaceable elements, the vital ingredients and components, that are required for you to deliver the value proposition/syouvepromised to your customers. These are things you have ownership of or are within your control. These resources differ across businesses, industries, sectors as they are specific to your customers, the value you deliver to them, and how you deliver that value to them. Key resources usually sit within the following categories: human resources, physical resources, intellectual property resources, brand resources.All ofthese resources can come at a cost, so it is important to recognise this when exploring them as it may make more sense to outsource, or partner, rather than retain that resource yourself.
Prompts:
What do we need to own/control in order to effectively deliver value?
Based on our activities, channels and relationships, what resources do we need to make them possible?
What resources are feasible for us to maintain, versus which ones could we outsource or leverage from partners?
Example:
Flat-pack system, strong research and design (R&D), design and engineering teams leveraging technology such as computer numerical control (CNC) to reduce the need for skilled carpenters or bulky packaging.
Extensive and fully stocked inventory to allow for the 'wander, take and go' model of shopping.
Hybrid and sustainable materials that meet quality, weight and sustainability standards aligned to their value proposition and cost structure IKEA brand name, distinctive design and product names, and trademarks such as 'Democratic Design' and 'IKEA Way'.
8. Key partners
Explanation:
Think of your offering as sitting within a value chainwhere there is a complete process by which a product or service is made and deliveredand consider that it is likely your organisationdoesn'tdo everything itself; someone either sits before you or after you. The key partners section of the BMC should detail those individuals or organisations who help you deliver the breadth of value possible, across that whole value chain. They provide the inputs that keep your organisation running smoothly as they enable you to focus on what you do best. Understanding your business model and having a clear strategy allows you to make good decisions about where to focus your efforts, and where to leverage the capabilities of others and form a partnership.Itswhy two companies in the same industry can be in very different businesses, because they have differing strategic priorities in their approach to delivering value. As a result, your partners are intertwined with the value you seek to deliver, and how you seek to do so. Furthermore, when working with partners, there is an important consideration; theycantbe controlled like our own resources can, so they require deliberate attention and management.
Prompts:
Do we collaborate with anyone to deliver value?
Are we outsourcing any activities to other parties or organisations?
Who do we depend on outside of our organisation to help us provide our offerings or service?
Are we dependent on any external sources for funding or sponsorship?
Examples:
1400 suppliers in 52 countries and more than 40 distribution centres in 16 countries. Suppliers and distributors contact each other to have a ready stock at all the IKEA stores, enabling a consistently fully stocked inventory.
Almost 500 Franchises across 52 countries, who are both R&D partners and franchise partnersproviding financial stability, while allowing franchisees to challenge, test and explore new markets and ideas.
Collaboration, design and charity partners,e.g.Sonos,Soarand Social entrepreneur co-design program.
9. Cost structure
Explanation:
This section helps you get a sense of your financials, telling you what you are likely to need to spend, but also the format and frequency in which we will likely spend it. Without being a full financial statement, this section should detail which costs are one-offs, and which are ongoing, as well as what types of activities or resources that incur costs that are fixed, and those that have costs that are variable. There are also some costs that are often hidden or overlooked, such as the cost of acquiring a new customer, or retaining an already existing one. Capturing these figures should help you start to think about which combination of cost types and structures best match the way in which you generate revenue, deliver value and service your customers.
Prompts:
Where does our money get spent across the different parts of our business model?
Have we considered costs that are associated with our sales or lead generation activities?
Which costs are upfront, or one-off, or ongoing?
Which costs arefixedand which are variable?
Example:
Focus on high volumes at a low cost, which permeates through their product design through to their store locations and employee base.
Production and manufacturing costs, reduced through use of flat-pack system and focus on good design and engineering to minimise product dimensions for delivery.
Focus on high quality, flexible and replicable products via targeted investment in design, R&D, technology and engineering teams to save on shipping, floor staff, carpentry etc.
Franchise model to create financial stability and brand consistency while allowing for place-based targeting and entrepreneurial spirit.
Robust inventory and display home style product display to meet customer demand; warehouse style inventory management and purchasing experience to reduce price.
10. Revenue streams
Explanation:
Price is the test of our value proposition. Value propositions underpin what customers are willing to pay, and therefore influence our revenue streams. This section of the canvas is very dependent on the otherparts, butcan also heavily influence them too. You want to not only capture the money coming in, but how it comes in, from who and what are the dependencies surrounding that money coming in. In order to establish sustainable revenue streams, you need to be clear on what triggers each type ofpurchase, andunderstand the price sensitivity of transactions. Combined with your knowledge of customer preferences and mindset, and how they use the products/services, you can start to predict their spending patterns and forecast revenue. You can also determine how easy it is to up-sell or cross-sell to them and begin to design offers and promotions that incite purchases (such as discounts, VIP specials or rewards for making referrals to new potential customers). As you can see, this will then influence our customer relationships, channels, activities and cost structures.
In essence, once you have an idea of how your customers behave, you can start designing targeted pricing strategies from a holistic perspective. Armed with this knowledge, you can build a rough financial model and start making decisions about which customers are worth pursuing.
Prompts:
What does each customer segment buy?
How much does each customer spend per transaction?
How many purchases does each customer (eventually) make?
What is influencing their purchasing decisions?
Are there any other ways we generate revenue (funding/sponsorship, promotions, referrals etc)?
Examples:
Franchisees: Annual franchise fees (3%).
One-off and bulk purchases, low cost, high volumeproduction savings passed onto the customer to ensure low cost, leading to competitive advantage.
Refillable or modular products, that incentivise return purchase.
Supplementary services as add-ons,e.g.restaurant, delivery, interior design, officefitouts.
Step 4: Onceyou have completed all of the elements of the canvas, it is now time to 'triage' your canvas. This involves performing an initial critique of the model you have created and using a simple coding system to give you a holistic sense of the strength of your business model canvas.
For example, you may wish to use a traffic light system as follows:
If you identify gaps, misalignments or blockers that should be a priority for you to address, change the colour of these notes toRED.
If you identify elements where there is a reasonable foundation but possible risks may need to be mitigated, change the colour of these notes toYELLOW.
If you identify areas of strength, where you are confident there are the right foundations, insights or capabilities here to be leveraged, change the colour of these notes toGREEN.
Ask the following questions to help you to triage and refine your business model canvas.
3.5 Discussion: BMC support
You will use acollaborativeMiro board to complete this taskPurpose
Your BMC will form a key part of your submission forAssessment 1: Business model canvas and analysis reportand forms the foundation forAssessment 2: Strategic plan and roadmap. This discussion is a place to post your work-in-progress BMC, for feedback, or ask any questions you have regarding 3.4 Activity: Build your business model canvas to ensure that you are on the right track for this integral activity.
This discussion supportsunit learning outcomes 1, 2 and 3.
This should take approximately 20 minutes to complete.
Task
Step 1: Posta screenshotofyour work-in-progress BMC and any questions you might have regarding it, to the LEO5002 Collaborative board.
Step 2: Replyto your peers. Get involved and offer some insights from your own experience, or offer constructive feedback on any aspects of their BMC that they might be able to improve.
Aim to contribute to the discussion by the end of the week.
3.6 Stretching your strategic analysisUsing tools such as the BMC helps us build a sound idea of the current state of an organisation. But business models do not exist in isolation. They are impacted by a range of external factors. With this clarity and understanding, we are then able to dig deeper into parts of the organisation that may need more attention, where there are disconnects between certain value drivers or value systems or where we feel that there are likely risks or opportunities that warrant attention.
As mentioned above, strategic analysis can take many forms, and the tools at your disposal are vast and wide-ranging. Having completed your BMC and initial triage of the business model, you are now primed to explore what ways might be most appropriate in stretching your analysis, both internally and externally. Watch the following video for some further insight into the process of stretching your analysis.
Detailed below are some of the more common contemporary tools used for strategic analysis, separated into categories of internal analysis and external analysis. This is by no means an exhaustive list, merely a starting point to familiarise you with different ways strategic analysis can be carried out. Take the time to explore the tools below (and feel free to broaden that search if you so desire).
To direct your review of the analysis tools, keep the results from3.4 Activity: Build your business model canvas, top of mind. Specifically, as you look into each analysis tool, think about how it can shed light on the strategic questions, hypotheses, and insights you arrived at through the triage of your focus organisations BMC.
Customer journey map or Service blueprintSWOTInnovation lensesPorters value chainPorter's value systemPorter's five forcesPESTLE and its variationsBlue ocean analysesThe ecosystemOnce you have explored the range of strategic analysis tools, select those most appropriate given your insights from your BMC and initial triage, and apply them to your focus organisations model. Many of these can be overlaid or extrapolated from the BMC. This will assist you as you make a start onAssessment 2: Strategic plan and roadmap.
3.7Bringing it all togetherAs explored in the first activity of this module, a sound business model is only as good as the information you put in and the insights you can draw from it. An important part of strategic analysis is the synthesis of raw data, converting it from information into actionable insight. The end result of the BMC and further analysis should be a solid set of strategic priorities and insights that guides strategy formulation.
Your task, now that you have conducted a thorough analysis of your focus business, is to bring your analysis and thinking together. Assessment 1 requires you to take the business model canvas of your focus business and provide a strategic position based on your analysis. Your next task forAssessment 2:Strategic plan and roadmapis to synthesise the information you have gathered from the above activities and turn it into a set of strategic priorities and actionable insights that help you form this strategic position and help you round out this part of your assessment.
Insights and strategic priorities can include elements such as identified dynamic capabilities, increased market share, consolidation of customer understanding, improved customer experience, etc. Be mindful that you are not just focused on things that need to change, but part of your position may be to argue for elements that need to be retained or leveraged. Key questions to ask yourself in this synthesis stage, are:
Based on this current state view, what direction should I take?
What are the insights and priorities my analysis has led me to?
How does this impact the organisations strategic imperatives and change agenda?
The following notes will assist you as you start bringing all your research and analysis togetherEvery sound strategic analysis requires four key elements:
Your focus:
What question are you seeking to answer?
What hypothesis are you trying to prove?
Your internal analysis:
What are the most important features and parts of the organisation?
How does the organisation create and distribute value?
Your external analysis:
What are the most important features of and players in the organisations ecosystem?
How does the ecosystem create and distribute value?
Your communication:
How will you explain your insights and the strategic implications of the analysis?
These elements can build on each other, but are also interdependent. Through internal analysis you might expand or pivot your focus, or through external analysis you may need to further interrogate your internal analysis or revise your approach to communicate findings.
There are usually a few variables to assist with this, such as determining whether this analysis is to inform implementation or planning and at what level of the organisation you are anchoring your analysis. Are you seeking to interrogate the whole of the organisation, or are you hoping to dive into particular business units or functions? Similar to the more holistic strategic process, this anchoring can adapt and evolve, but having an objective or hypothesis to start with will give your analysis meaning that can then be built upon in later stages of the process, but also re-visited if your hypothesis was disproved or your approach requires a pivot or realignment.
Once youve determined your focus, you need to choose the analysis tools you will use in conducting your internal and external analysisThis is about how you will use your analysis to answer your strategic question. Researchers tend to create their own original typologies to reflect their understanding and/or to provide a new and improved lens through which to evaluate a question of interest. Every business subject comes with a series of tools that can be used as an analytical framework to address a myriad of business questions, which are simply liststypologies and taxonomiesassembled to guide and serve your purposes. While the words typology and taxonomy may seem a bit abstract, they are really quite practical. These lists, or taxonomies and typologies, form the essence of almost every analysis tool youll ever use.At the heart of it, you will find it really useful to understand them.
For our purposes, think of a typology as a single list, and a taxonomy as a set of lists put together into a framework (or model, or matrix, or canvas, etc). The essence of any analysis tool is a list or set of lists that typically take the form of categories, questions, or stages. These lists are intended to guide strategic analysis. Most analysis tools used in strategic management are developed through rigorous research, but the value of any particular tool can only be realised in practice. If you look closely at almost any analysis tool, in any subject area, youll quickly see that they are all typologies or taxonomies.
You would do well to take control of these and use them to your advantage. For instance, the four P's of marketingprice, place, promotion, and productis simply a typology. Perhaps the most relevant taxonomy from your business education is Porters classification of business-level strategy. In this two-by-two matrix, one typology includes the type of strategy, cost leadership or differentiation, while the other typology represents the breadth.
To be useful, a typology needs to have three characteristics:
Comprehensive: Each idea that should be included on the list is included on the list. It wouldnt make much sense to think about price, promotion and place without considering product, would it? Thus, we try to identify all the key items that make a contribution to the list, hopefully, providing a set of items that covers everything that needs to be considered.
Concise: Each item in the list makes a contribution to the usefulness of the list. There probably wouldnt be much value in adding the term power to the four Ps, would there? Thus, we try to limit the typology to as few items as possible, hopefully providing a list where each item makes a substantial and equal contribution.
Mutually Exclusive: Each item in the list can be clearly differentiated from the other items in the list. It wouldnt be as clear to use the 4 Ps if place was considered an element of promotion, would it? Thus, as we use the typology, we make note of what the each item includes and where the boundaries are drawn between these items.
Module 4
In this module, you will explore the strategies firms employ to meet their strategic goals. Armed with a clear set of insights and priorities gained through strategic analysis, you will work through a series of frameworks to identify a set of the most promising strategic options for your focus organisation. In applying the frameworks and extending the formulation of your focus organisations strategic direction, you will also be setting yourself up to complete the second assignment.
In this module, you will:
develop an understanding of the range of strategy frameworks and models available to organisationsdeepen your understanding on the identification of strategic plans and positions appropriate to a particular organisation in light of its strategic priorities and unique competitive environment.
4.1Provocation
In the following video, Caroline Sanz and Dr Jonathan Matheny discuss strategic formulation. This is all about closing the gap between where the organisation is, and where it wants to go.
4.2Introduction to strategy formulation
While strategic analysis involves the use of tools to develop insights and priorities, formulation is the process by which an organisation chooses the strategy that will deliver on those strategic priorities.Organisations differ in their approach to analysis and this often translates into differences in the broad set of strategies they choose. In one of the most cited frameworks across all the strategy literature, Raymond Miles and Charles Snow (1978) argued that different strategies arise from differences in the way an organisation perceives and engages its environment.
The Miles and Snow typology has stood the test of time, largely because it makes intuitive sense. For instance, it is easy to see that Coca Cola actively seeks to understand their environment, quelling any threats as they defend their strategic decision in a favourable competitive environment. Similarly, it is reasonably easy to see that a prospecting company like Uber drives change (please pardon the pun), recreating competitive environments.
Leaping-off the pioneering work of prospectors, analysers such as Lyft (which launched with their improved App after Uber established the market) scour the environment for emerging winners and then compete in the newly established environment. Needless to say, in a rapidly changing environment, reactor organisations are unlikely to last long in a VUCA environment as they do not seek to understand nor affect their environment. As such, it isnt easy to identify examples of reactor organisations. But you might want to check out the fall ofWang Laboratories, a $3 billion tech firm which rivalled IBM throughout the 1980s and effectively vanished in 1992.
4.3 Activity 1:Setting the stage for strategy formulationYou will use apersonalMiro board to complete this taskPurpose
This activity has been designed for you to reflect onAssessment 1: Business model canvas and analysis reportand support the development of your strategic priorities forAssessment 2: Strategic plan and roadmap.Engaging this activity will further consolidate your work on the first assessment and lay the foundation for your work on the second assignment.
This activity supportsunit learning outcomes 1, 2 and 3.
This should take approximately 60 minutes to complete.
Task
Step 1:Reviewyour work on Assessment 1 andidentifythe key insights to bring forward from strategy analysis into strategy formulation.
Step 2: Generatespecific insights by addressing the following points:
Evaluate the organisations competitive environmentis it static or dynamic?
Evaluate the organisations products and/or servicesare they new entrants or established players? Are they in a growing or mature market?
Evaluate the organisations resourceswhat are the key tangible and key intangible resources available? Do they provide an advantage over competitors? If so, is that advantage sustainable? Do they inhibit change (fixed, tightly-linked) or provide opportunity for change (flexible, loosely-linked, re-combinable, etc.)?
Evaluate the organisations approach to analysing and engaging its environmentdoes it conduct and apply strategic analysis? If so, does this analysis translate into strategic action?
Step 3:Applythese key insights to form a position regarding the organisations fit with the competitive environment, specifically identifying where the organisation is well aligned and where the organisation faces (anticipated?) competitive gaps or deficits.
Step 4: Identifya set of strategic priorities which will inform the strategy formation of your focus organisation forAssessment 2: Strategic plan and roadmap.
Step 5: Make notesandrecord your ideasfrom the preceding steps on your LEO5002 Personal board in Miro for later reference.
4.4
4.4Strategy formulation
Different strategies are utilised to achieve different strategic goals. There are a number of different frameworks that you can explore toidentify a set of the most promising strategic options for your focus organisation.
Make your way through each of the chapters ofStrategy formulation, using the following links, to dive deeper into different types of of strategy, their application and how to use these tools to develop insights and priorities. Progress through these learning materials and small-scale activities throughout the week.
1. Corporate level strategy - Ansoff's matrix2. Corporate level strategy - The BCG matrix3. Corporate level strategy - The four logics model4. Business level strategy5. Position strategy6. Leverage strategies7. Opportunity strategies4.5
INCLUDEPICTURE "https://learning.monash.edu/pluginfile.php/2441587/mod_label/intro/A.svg" * MERGEFORMATINET 4.5 Activity 2:Agency in strategic formulation
You will use acollaborativeMiro board to complete this taskPurpose
The aim of this activity is to apply the Miles and Snow (1978) typology insights to your focus organisation forAssessment 2: Strategic plan and roadmap.
This activity supportsunit learning outcomes 1, 2 and 3.
This should take approximately 30 minutes to complete.
Task
Step 1: Completethe following interactive activity. This activity will prompt you to rate a series of statements in order to evaluate the strategic formulation of your focal organisation. Be sure to export your final score to PDF in order to save your answers.
4.3 Agency in strategic formulation interactive alt text
Instructions
For the following 8 statements, rank your focal organisation on a scale of 110, where 1 is 'never true' and 10 is 'always true'.
Statement 1 of 8
Agency in strategy formulation:
We formulate strategy based on a systemic analysis of our external business environment.
Statement 2 of 8Agency in strategy formulation:
We establish definite and precise strategic objectives.
Statement 3 of 8Agency in strategy formulation:
We evaluate potential strategic options against explicit strategic objectives and assess the alternatives when formulating a strategy.
Statement 4 of 8Agency in strategy formulation:
When we formulate a strategy, it is planned in detail.
Statement 5 of 8Forced choice in strategy formulation:
Our freedom of strategic choice is severely restricted by our external business environment.
Statement 6 of 8Forced choice in strategy formulation:
Barriers exist in our business environment that significantly restrict the strategies we can follow.
Statement 7 of 8Forced choice in strategy formulation:
Forces outside this organisation determine our strategic direction.
Statement 8 of 8
We are not able to influence our business environment; we can only buffer ourselves from it.
4.6 Discussion: Strategic formulation
You will use acollaborativeMiro board to complete this taskPurpose
In this discussion, you will draw upon4.3 Activity 1: Setting the stage for strategyformulationto apply position, leverage and opportunity strategies to your focus organisation.This discussion will supportAssessment 2: Strategic plan and roadmap.Your engagement in this discussion will directly inform the first step in your work on Assessment 2.
This discussion supportsunit learning outcomes 1, 2 and 3.
This should take approximately 60 minutes to complete.
Task
Step 1:Revisitthe position, leverage, and opportunity strategies noted above and consider each in regard to the strategic priorities you identified in4.3Activity 1: Setting the stage for strategy formulation.Conduct some independent research to identify strategies (not explained in the required readings or the module materials) that may hold promise for your focus organisation.
Step 2: Postthe following to the LEO5002 Collaborative board in Miro:
The name and a brief description of 12 additional promising strategies you found through your independent research. Be sure to include accurate referencing so that your peers can share in your discovery.
A 50100 word description of the strategic formulation you propose for your focus organisation. Your strategic formulation should demonstrate your engagement with the strategies covered in this module and integrate your independent research for additional strategic directions.
Step 3: Readthe posts of your peers and reply to at least two posts, providing constructive critical comments on the merit of the strategy formation they've put forward.
Aim to contribute to this discussion by the end of the week.
Module 5
In this module, you will engage with the imperative of strategic implementation, addressing the challenge of realising the organisations deliberate formulated strategy. With a clear understanding of the importance of strategy implementation, you will be introduced to a variety of frameworks that improve the translation of strategy across the formulation-implementation divide. The primary focus will then turn to application of the frameworks in practice, setting yourself up to complete the second assignment.
In this module, you will:
gain an appreciation of the imperative of implementation and the barriers to bridging the strategy formulation implementation dividedevelop an understanding of several approaches to realise deliberate strategy and how these can be applied in practice.
5.1 Provocation
Dr Nell Kimberley and Caroline Sanz discuss strategy implementation in the following video. This focuses on the switch from formulation to implementation along with the actions that can be taken to ensure that your strategy will succeed.
5.2The implementation imperative
Through your engagement in the strategy formulation activities of Module 4, you should now have the beginnings of a deliberate strategy for your focus organisation. You might think youre ready to develop implementation plans that will bring that deliberate strategy to life, but take a moment to recognise the scope of this challenge. Think back to where we began this unit in Module 1, specifically the discussion that distinguished between a firms deliberate strategy and the strategy a firm actually realises:not all deliberate strategy is realised and not all realised strategy is deliberate.
In a compelling HBR article, Peter Drucker, a prolific and influential management theorist, extends Mintzbergs definition of strategy asperspectiveby explaining why deliberate strategy is so seldom realised. Drucker (1994) argues that managers tend to conduct strategic analysis and formulate strategy that aligns with their theory of the organisation: a shared collection of unchecked assumptions about the organisations competitive environment competitors, customers, purpose, products, capabilities, resources, etc. As a result of not recognising, much less challenging, their assumptions, managers create deliberate strategy that is little more than a sharedtheory, so it rarely finds its way into practice. As Benjamin Brewster observed over a century ago, 'in theory there is no difference between theory and practice, while in practice there is' (Brewster 1882, p. 202).
Tying this notion to the strategy formulation-implementation divide, Bergman says:
However hard it is to devise a smart strategy, its ten times harder to get people to execute on that strategy. And a poorly executed strategy, no matter how clever, is worthless. In other words, your organizations biggest strategic challenge isnt strategic thinking its strategic acting. (Bergman 2017, p2)
Leaders can use frameworks and tools, even use communication and narratives as the key driver of strategy formulation, but strategy implementation is about action. The gap between what people know and what they do can be huge.
INCLUDEPICTURE "https://learning.monash.edu/pluginfile.php/2441597/mod_label/intro/Reflect.svg" * MERGEFORMATINET Reflect
Think about a moment (a project, a team presentation, a coordinated social event) at work when people seemed to be going in different directions, even when they intended to be working together in coordinated action towards a common goal.Make some notes about what you remember from this moment:
Who did what?
What seemed to drive each person's unique direction?
How and when did people realise they were not coordinating well? What did they do about it?
Was the common goal achieved?
Reflecting on this experience,develop a brief set of lessons you take from the experience that will inform your practice to facilitate coordinated action in the future.
5.3
5.3Strategy implementation
Make your way through each of the chapters ofStrategy implementation, using the following links, to dive deeper into different strategic frameworks, cycles for strategic implementation and how to frame strategy implementation. Progress through these learning materials and small-scale activities throughout the week.
1. The Big Arrow2. The cycle for strategic implementation3. The strategy consultants' framework4. Framing strategy implementation INCLUDEPICTURE "https://learning.monash.edu/pluginfile.php/2441599/mod_label/intro/AL.svg" * MERGEFORMATINET Apply your learningTake a moment to read Johnson et al's (2010) claim that successful strategy implementation is achieved through hidden coalitions who take advantage of happy accidents. Identify a list of reasons an organisation would or would not engage in this approach to strategy implementation. Consider:
What are the merits of this approach?
What are the risks or downsides of the approach?
Reflecting on the practical aspect of following this approach, and construct a set of structural and cultural implications that this approach would need for your focal organisation to employ it.
Based upon your exploration, what reasoned position have you developed about this approach? Is it a useful strategy implication for your focal organisation?
5.4
INCLUDEPICTURE "https://learning.monash.edu/pluginfile.php/2441602/mod_label/intro/Pen.svg" * MERGEFORMATINET 5.4 Activity:Jarrett on strategy implementation
You will use apersonalMiro board to complete this taskPurpose
For this activity, you will look at ways to successfully implement strategy and reflect on the frameworks you will implement forAssessment 2: Strategic plan and roadmap.
This activity supportsunit learning outcomes 1, 2 and 3.
This should take approximately 30 minutes to complete.
Task
Step 1: WatchtheGetting strategy execution right(Harvard Business Review 2012). Pay close attention to the elements Michael Jarrett includes and the way he frames them when arriving at his final four-point typology.
Step 2: Comparethe three tools discussed in this module(The Big Arrow, Virtuous Cycle, and Consultants Framework). What, in his typologies, was redundant and what stood out as unique to his approach?
Step 3: Constructan explanation of how Jarrett's framing is different from that of the other three tools discussed. What about Jarrett's approach, if anything, particularly resonates with you. How will you integrate his ideas intoAssessment 2: Strategic plan and roadmap?
Postyour ideas to your LEO5002 Personal board in Miro.
5.5
INCLUDEPICTURE "https://learning.monash.edu/pluginfile.php/2441604/mod_label/intro/Discussion%20icon.svg" * MERGEFORMATINET 5.5 Discussion:Framing a plan for strategy implementationYou will use acollaborativeMiro board to complete this taskPurpose
The purpose of this discussion activity is for you to engage in independent research to take agency for your implementation strategy. You will need to identify alternative framings for strategic plans.
This discussion supportsunit learning outcomes 1, 2 and 3.
This should take approximately 60 minutes to complete.
Task
Step 1:Conductsome independent research to identify a range of strategic plans available online. Specifically, search for worked examples that take very different forms. For instance, you might find a detailed plan presented in a project management framing, such as the OnStrategy's example ofAcme corporation (PDF 34 KB)(n.d.) coupled with a broad conceptual plan presented in an enterprise architectural framing, such as the following image.
Step 2:Identifyat least two examples that resonated with you, perhaps because one or both are relevant to your focus organisation.
Step 3:In the LEO5002 Collaborative board in Miro,postan explanation to the discussion forum for each example you have found (50 words each). Indicate whether you anticipate using the framing for Assessment 2. Be sure to include a reference so that your peers can share in your discovery.
Note:Create your post using one of the orange sticky notes provided and include your name where it reads 'Student name'.
Step 4: Readthe posts of your peers, andreplyto two posts. Provide constructive critical comments on the merit of the framework they have put forward.
Aim to contribute to this discussion by the end of the week.
Module 6
In this module, the last of the unit, you will focus on organisation responses to environmental disruption and strategic drift. Specifically, the module provides a number of tools and models for strategic renewal, strategic adaptation, and organisational agility. With each set of tools, you will have the opportunity to apply your learning to your focus organisation. By doing so, you will not only deepen your learning and advance your ability as a strategic leader, but you will inform the interplay and interdependency between strategy formation, implementation, and adaptation.
In this module, you will:
develop an understanding of viable responses to environmental disruption and strategic driftdeepen your understanding of the capabilities and capacities required for people and organisations to engage in strategic agilityreflect upon and make note of your learning throughout this module.
6.1 Provocation
Dr Nell Kimberley and Caroline Sanz wrap up this unit with a discussion about strategy adaptation in the following video.
6.2 Strategy realisation
The strategic health of an organisation can be evaluated by the degree to which the firm fits within and is adapted to its competitive environment. The use of phrases such as being adapted to the environment can be reasonably considered as deliberate references to Darwins theory of natural selection.
Make your way through each of the chapters ofStrategy realisation, using the following links, to dive deeper into strategic renewal methods, the strategy process trap and organisational agility. Progress through these learning materials and small-scale activities throughout the week.
1. Population ecology and environmental disruption2. Method for strategic renewal3. The strategy process trap4. Organisational agility6.3 Activity: Strategic adaptation deliberate emergence
You will use apersonalMiro board to complete this taskPurpose
For this activity, you will look at applying the concepts of strategic adaption and deliberately emergent strategy to your focus organisation forAssessment 2: Strategic plan and roadmap.
This activity supportsunit learning outcomes 1, 2 and 3.
This should take approximately 30 minutes to complete.
Task
Step 1: Completethe following interactive activity. This activity will prompt you to rate a series of statements in order to evaluate the strategic formulation of your focal organisation. Be sure to export your final score to PDF in order to save your answers.
6.3 Strategic adaptation Deliberate emergence
Instructions
For the following 6 statements, rank your focal organisation on a scale of 110, where 1 is 'never true' and 10 is 'always true'.
The following six prompts are extracted and adapted from a broader instrument developed by Bailey et al (2000).
Statement 1 of 6
Our strategy develops through a process of ongoing engagement, learning, and adjustment.
Statement 2 of 6
Our strategy is continually adjusted as changes occur in the marketplace.
Statement 3 of 6
To keep in line with our business environment we make continual small-scale changes to strategy.
Statement 4 of 6
Our strategies emerge as we respond to the need to change.
Statement 5 of 6
We keep early commitment to a strategy, deliberate or emergent, tentative and subject to review.
Statement 6 of 6
We tend to develop strategy by experimenting and trying new approaches in themarket place.
Step 2: Evaluateyour results.A high score on the six prompts would suggest the focus organisation practices strategic adaptation.
Step 3:Based on this evaluation,reflecton the strategic process of your focus organisation.
Is the process more formal or informal?
Do the elements of analysis, formulation and implementation stand as distinct processes, or are they integrated or even blurred and interactive?
Postyour reflections to your LEO5002 Personal board in Miro.
6.4 Discussion: Unit reflection and wrap
You will use acollaborativeMiro board to complete this taskPurpose
Thank you for your contributions to the learning community and for your good work throughout the six weeks of this unit. This discussion activity is an opportunity for you to reflect on your learning throughout this unit and trace your learning journey.
This should take approximately 30 minutes to complete.
Task
Step 1:Take a moment to return to Module 1 and the post you made for1.6 Discussion 2: Identifying the organisationin the LEO5002 Collaborative board in Miro where you identified your focus organisation and described its strategy. Read your post and re-read the comments offered by your peers.
Step 2:Without thinking about it too much,make some notesabout the way you described the organisations strategy and identify some differences in how you would describe the organisations strategy today. What have you learned that informs the way you identify and describe an organisations strategy? You may find it useful to scroll through the modules and open a few of the readings.
Step 3:In theLEO5002 Collaborative board in Miro,posttwo points of learning that you have identified and will take away from this unit. Be sure to note how these points of learning will influence your practice going forward.
Step 4: Replyto a peer's post and comment on your shared experience. If you want, take the time to say goodbye to your peers and your OLA.
Aim to contribute to the discussion board by the end of the week.
