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Management and Organizational Studies
Management and Organizational Studies 4410A/B
Raymond Leduc

5/31/2013 10:56:00 AM The Secret Origins of Corporate Strategy  Walter Kiechel  Consulting/academic backgrounds  Thought leaders misunderstood  Business leaders should be able to recognize patterns  Secret intellectual history o Most people don’t know about the role of management consultants o People don’t know about what consultants do o Most people haven’t heard of the heroes in the book (i.e. Bruce Henderson)  Haven’t companies always had strategies? o No o Strategy is a framework that was developed in the 60s and 70s o For the first time, companies had a systematic and integrative way of thinking about their costs, customers, and competitors  Bruce Henderson  founded Boston Consulting Group  All companies have strategies now o Strategies become installed o Concepts developed further o “So common it’s like speaking prose”  Bruce Henderson’s best salesman  Bill Bang  Greater Tailorism o Looking at all their costs, competitors, and customer information in a detailed way  Strategy in the 90s o Process engineering o Re-engineering o Thinking systematically about globalization  Where is strategy today? o Some companies don’t do strategic planning o Make strategy adaptive  gather information from everyone in the organization and feed it back o Strategy and the people dimension are being combined  Fred Glauch o Fred born in Brooklyn neighbourhood o Became rocket scientist o Wouldn’t assign to consulting assignments  Consultants o Great at pattern recognition o Great at digging for evidence 5/31/2013 10:56:00 AM Five Forces  Michael Porter  How competitive forces shape strategy  Notion that competition is often looked at too narrowly by managers  Says that you’re directing with direct competitors but you are also in a fight for profits with a broader extended set of competitors  Holistic way of looking at any industry  Threat of substitutes  can’t over charge  Threat of new entrants  can’t over charge  What’s causing profitability?  How would you apply this analysis to the airline industry? o Airlines bottom on profitability chart o Nature of rivalry is intense o Hard to differentiate and wait the customer to wait for another flight o Low barriers to entry  constant stream of airlines coming into the industry o Can rent a plane, lease a gate, etc. o Substitute of driving car, train, etc.  Soft drinks industry o 5 star industry o All forces attractive  Application of ideas in the real world of business o Concepts can be applied to any industry o Helps you avoid getting trapped by the latest trend or technological sensation o Allows you to focus on underlying fundamentals  Internet o People saw the Internet as a force rather than an enabling technology that might or might not impact the underlying structure of the industry  Framework is robust  There’s a lot of confusion in applying the framework in actual practice  Rivalry o How do we understand when it is positive sum? Zero sum?  Positive sum competition o Companies can compete on different attributes that’s relevant to particular groups of customers o Companies are competing on different things in order to meet the needs of different segments  Zero sum competition o Consumer gets low price but no choice  Industry analysis is the starting basic discipline in any strategy formulation process  Figure out what your industry is  Identify what the industry structure is in your industry  5 forces give you the tools for understanding dynamics  How do you position yourself to find the spot within the industry to command a good profit  If every company finds a unique need that it can set up to meet, multiple rivals can be successful  5 forces that shape strategy has been around for 30 years Biggest Threat to U.S. Competitiveness  Combination of public education system and immigration policy o 2000000 unfilled, high paying manufacturing jobs in the U.S. due to lack of locationally trained or technically competent workers  Universities attract the best students from around the world, yet upon completion of their studies we do little to keep them in the U.S. and sometimes do a lot to encourage them to leave  Macro set of issues; how the government works o Falling behind other countries  Debt o Nation borrow too much, saves too little o People borrow too much, save too little o Hurting national security  Rest of the world is catching up o Some of the things that were unique to America are now being replicated in other parts of the world  K-12 education system o Relative performance of U.S. students vs. the rest of the world o Significant gaps between subgroups of students by racial and economic factors o Quality of cognitive skills is a blocker to long-term competitiveness  We need to see, from the government, a long-term fiscal plan o Remove uncertainty  Tax reform o Tax structure is rendering American companies non- competitive o Complex and dense tax structure o Cost of U.S. capital is more expensive than overseas  Long-term failure to invest adequately i
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