Global Strategic Market Management (GSM)

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Global Strategic Market Management (GSM)

• Malin Brännback

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Course Outline

• W. 49 Dec 2, Introduction. The Global Business
  Environment what is taking place, management of
  discontinuities, transformation of industries,
  New Technlogies, Culture
• Questions for w. 50
• W.50 Dec.9, What is strategy, strategic
  management, and strategic market management and
  what is culture
• Hand-out of GR-1 assignment to be prepared in
  pairs and to be handed in on January 20

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Course Outline

• W. 3 Guest Lecture 14.1., Kei Heikkilä-Stenvik,
  Schering, Mirena
• Culture cont.
• Question for w. 4
• W. 4 Jan. 20, Global Branding, Positioning and
  Market Communications
• Questions for w. 5

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Course Outline

• W. 5 Jan. 27, Growth strategy
• Questions for w. 6
• W. 6 Feb. 3,
• Questions for w. 7
• W. 7 Feb. 10, Go West presentations and
  discussion
• Individual assignment to be handed in W.9 Friday
  at 15.00
• NO EXAM!

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Global Large Individual Assignment

• What is global the emerging market perspective
• What do you know of emerging markets?
• which are they?
• who is the emerging middle-class market in these
  countires, what kind of business model will
  effectively serve their needs?
• what are the key characteristics of the
  distribution networks in these markets, and how
  are the networks evolving?

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Large Individual Assignment

• Use
• the Businessweek text on India
• PrahaladLieberthal The End of Corporate
  Imperialism (HBR, Aug., 2003)
• Describe China, India and Brazil
• What kind of Finnish business has their business
  here?
• In what ways will these markets present Finnish
  firms with opportunities and/or threats?
• What strategic choices will be necessary?
• What are the implications for market management?

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The Next Society - Demographics

• Changes in demographics
• The population will drastically shrink in the
  industrial countries birth rate is going down in
  all industrial countries, Today Italy and Japan
  have a pop. Of 60 and 125 million resp. Est. for
  2075 is 20-22 and 55 million!

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The Next Society - Demographics

• The domestic policies for the next 25 yrs. Will
  be to support older retirement age up to 75-80
  yrs!
• How to learn to work and manage a workforce which
  is not full-time employees
• After 2010 we will have people who have never
  worked with their hands!

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The Next Society - Society

• Domestic policies will be very turbulent.
• There will be no clear majority to support the
  new issues because the issues are all new.
• The share of disposable income is going up for
  the first time during this century - implications
  for infrastructure, capital goods and
  manufacturing.

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The Next Society - Labour

• do not depend on cheap labour, labour is not that
  important a cost factor - unskilled labour IS A
  COST FACTOR
• Learn to continue to learn, learn to forget,
  abandon the old, exploit your success. BUILD ON
  IMPROVEMENT
• COMPETE IN MANAGEMENT AND QUALITY

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The Next Society - Labour

• Change in workforce.
• due to demographic changes we will have
  increasing part-timers, external contractors,
  tele-work, etc.
• companies will have to rethink their compensation
  and reward system very soon.
• STAY AHEAD OF CHANGE.
• What information and knowledge do I need to do my
  work?

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The Next Society - Education

• Education will become even more important
• life-long learning
• what should be thought at colleague and to
  under-graduates
• students are no longer full-time white men under
  25yrs (US) they are women, part-time and over 30

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The Next Society - Collaboration

• Make the right alliances, find the right partners
• political disintegration and economic integration
  is escalating
• political boundaries will become enforced
• extreme currency fluctuation and very unstable
  currencies
• BUILD world-wide through alliances and partners
• One company cannot expect to own all
  technological resources

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Major Discontinuities Ahead

• More than just becoming
• good (TQM)
• fast (cycle time)
• lean (agile)
• These attributes are necessary but not adequate
• Recognition and learning to innovate are becoming
  real challenges

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Global

• Global - what does global mean?
• Not only global competition
• Increasingly global customers
• geographical asymmetries in growth patterns
• China and India grow by 7-10, Western Europe by
  less than 2
• dramatic shifts in resources within MNCs

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Global

• By 2010 most Western MNCs have their assets in
  Asia
• By 2010 we will have a workforce which has never
  worked with their hands!
• How will products be developed?
• How will HR be managed?
• How will top management be composed?
• How, what else?

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Global

• Taiwan produces more than 50 of all computer
  monitors, 72 of all mouse and about 60 of all
  motherboards
• Globalisation will have an impact on both the
  resources and skills configuration of the MNC

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Global

• What mix of local and global leadership is
  required to foster business opportunities?

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Deregulation and privatisation

• Unstoppable trend towards deregulation and
  privatisation
• telecommunications, airlines, financial services,
  health care are being deregulated
• race to extract value out of inefficiencies

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Privatisation

• Trend obvious world-wide
• producing social disruption
• Most local industries will become regional,
  national, and global
• the economies of these businesses will change
  dramatically

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Volatility

• A tremendous need for scaling up and down
• volatility and seasonality create a new set of
  demands on management

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Convergence

• Convergence of multiple technologies
• e.g. computing, communications and consumer
  electronics, and entertainment
• personal care products shampoo and face creams
• soybeans, corn, potatoes and plant genetics

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Convergence

• Chemical and electronic technologies
• digital cameras, printers, and copiers are
  combinations of material science, chemistry,
  electronics and software
• digitalisation has had a profound impact on most
  industries

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Intermediate Industry Boundaries

• What is the dividing line between PCs and TVs
• No clear identifiable competitor
• migration paths become sources of competition

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Standards

• New industries produce new standards
• what are the standards for security in E-commerce
• communication standards
• competitors collaborate to establish standards
• multiple standards may co-exist

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Disintermediation

• Distance between producer and consumer is
  shrinking
• the role of the producer and consumer is blurred
• outcome consumption becomes process consumption
• prosumption

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Eco-sensitivity

• Firms will move towards a business-opportunity
  oriented perspective from a compliance-oriented
  perspective

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Assessing changes in global market

• What kinds of data sources would you use?
• Are the sources reliable?

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Strategy, strategic management
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(No Transcript)
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Strateginen sekamelska..(Prof. Juha Näsi, JYU,
1992, p. 2, Liikejohto ja johtajuus, esseitä
asioiden ja ihmisten johtamisesta)
Yksi sankari tulee ja kirjoittaa, että liikeidea
on se suuri salaisuus, seuratkaa siis minua!
Toinen saapuu paikalle ja yliviivaa
liikeideakeskustelun ja väittää, että mission
ja creed ne vasta avainsanoja ovatkin.
Ilmestyy kolmas kurssittaja, joka nauraa ja
kertoo, että pojat puhuvat puutaheinää se jokin
on johtajan aivoissa ja se jokin on visio eikä
mikään tuuri. Kunnes lopulta lavalle änkeää
viimeisin saarnamies. Hän arvelee, että
visiomies on periaatteessa oikeassa, mutta
käytännössä väärässä avain on kyllä aivoissa,
mutta ei sen nimi mikään visio ole, vaan agenda
se on ja sillä siisti!
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Onko strategia siis kielipeliä?

• Puhuvatko veijarit samoista asioista eri nimillä
  vai tietenkin hieman eri asioista samoilla
  nimillä??
• Valitettavasti epäselvyydet eläävät paljon
  syvemmällä
• Peruskäsite eli strategia ja käsitteen luonnetta
  ja olomuotoa - strategian idea - koskevat
  käsitykset voivat olla peräti erilaisia.
• Seuraavaksi yksi lääke, jossa on kaksi osaa.

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Soitamme siis strategian vellikelloa ja paikalle
saapuu 4 ritaria..
1. Edustaa suurta kansianvälistynyttä
monialayhtymää, napauttaa paksua mappia ja
toteaa, että siinäpä se - strategia. Mapissa on
457 sivua, se on siisti, täsmällinen ja
vakuuttava. Mietimme hetken ja tajuamme, että
tämä strategiaidea on eräänlainen tiivistetty
kaiku joka toistaa perinteisen amerikkalaisen
strategiakäsitteen Yrityksen strategia on
määritelty kokonaisuus, joka esittelee yrityksen
toiminta-ajatuksen, päämäärät ja tavoitteet,
paljastaa yrityksen toimintaperiaatteet ja
suuntaviivat edellisten saavutta- miseksi,
hahmottaa välttämättömän organisaation sekä
nimeää yrityksen eri intressenteilleen tuottaman
tuloksen Strategia tarkoittaa siis suunnitelmaa
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• 2. Tulee toinen ja tokaisee
• Meille koko asia on hyvin yksinkertainen. Me
• myymme X-maasta tuotuja kodinkoneita
  Pirkanmaalla.
• Kuulumme vapaehtoiseen Y-markkinointiketjuun.
• Tuotteemme ovat pikkuisen yli keskitason
  laadultaan
• ja hinta taas pikkuisen alle. Siinä kaikki.
• liikeidean käsite, tuote-markkina-ajattelu ja
  yksinker-
• taisuuden ylistys
• Strategia on yhtä kuin reviiri

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3. Kolmas on menestynyt yrittäjä, erittäin
kokenut teolli- suusneuvos, joka on valtakuntansa
omin käsin rakentanut, kunnioitettu ja
pelättykin. Hän haluaa neuvoa Ei meillä
koskaan mitään strategiaa ole ollut, eikä tulla
tarvitsemaankaanKaikki mitä on tehty, on
mietitty tämän tukan alla..On meinaan ollut
riittävän kapea tuotesektori.. Ja se osattu
viimeisen päälle..Rautainen työnjohto ja
luottoyhteydet avainammattimiehiini..Pari hyvää
myyntitykkiä aina ja hyvät suhteet
viranomaisiin. Hänen strategia on ollut
jonkinlainen visio, näkemys tai
käsitys Strategia on ohjaava maailmankuva
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4. No strategia on siis sellainen kokonaishahmo
yrityksen toiminnasta, siinä on niinku ajatusta,
tilannetta ja toimintaa.. Se siis niinku muuttuu
tilanteen mukaanVoitais ajatella, että se on
niinku kanoottimies joellakoskia ja
suvantoja tyyntä ja vuolastasuoraa ja
mutkitteluaohjaaminen riippuu siitä, mitä on
välittömästi edessä ja mitä näkyy sitten vähän
kauempanasiis ihan seuraavan mutkaan
asti Strategia on toimintamallina päätösten
jatkuvassa virrassa. Härmäläisittäin soveltaen
Mintzbergiläisiä ajatuksia
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Lets add and divide with four
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Strateginen johtaminen vastaavasti pyrkimystä
tuon toiminnan juonen ja punaisen langan
käsissäpitämiseen. Monisovitteinen määritelmä
se sopii päätöksentekijän strategiaan, kun
mietitään mitä halutaan ja mitä pitää tehdä
yrityksen tulevaisuudessa ja sopiihan se
myös historijoitsijan strategiaan, kun
selvitetään jälkikäteen, mitä todella on
tapahtunut.
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Näsin strateginen kolmio

• Tiede
• miten ja miksi
• yleisesti ottaen
• on?

• Käytäntö
• miten juuri
• nyt ja tässä on
• ja/tai pitäisi olla?

Strategointi

• Oppi
• mitenkä strategiat yleisesti
• pitäisi rakentaa ja valita?

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Strategy, tactics, and operations
Strategy 5 yrs Tactics 1-3
yrs Operations NOW
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Mission, Objectives, Strategies, and
Tactics/Policies
Mission Top managements view of what the
organisation seeks to do and become over the
long term
Objectives Specific performance targets in each
of the areas covered by a firms mission
Strategies Means through which firms accomplish
mission and objectives
Tactics/Policies Actions that firms undertake to
implement their strategies
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Levels of analysis
Corporate Level of Mgmt Mission and
Objectives Business Division Level
Strategies of Mgmt Functional Level of
Mgmt Tactics and Policies Within Business
Divisions
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Vision, mission, strategy
Vision

• What are the assessments
• about the future?
• For the industry, the com-
• pany, competitors?
• Which discontinuities lie
• ahead?

Mission
With respect to the visions, what is the mission
of our company within the next 5-10 years?
Strategy
Is about the direction of organisations, most
often, business firms. It includes selection of
goals, choice of products, choice of scope and
diversity, positioning decisions, design of org.
structure and work, etc. Choices with critical
influence on success and failure.
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Vision

• Visions from a particular industry are linked
  with global visions.
• An industry does not exist in a kind of social
  vacuum
• What are global visions and how will they affect
  the drug industry?

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Mission

• Mission statement is a statement of the companys
  strategic intent in the future, fitted with the
  visions of the industry and the business
• Mission statement forms the basis of strategy,
  which is a more detailed declaration of the
  mission and the visions

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What is culture?

• se on sitä kun lauletaan ja soitetaan next
  door kid
• no teatteri kyllä on sitä, tai oli anakin ennen
  Oulua man in the street
• culture is science and art
• Icehockey is culture voice in the audience
• Rauman giäl onsupporter of Lukko
• handcarved boats..crafts teacher
• I believe that cultures begin with leaders who
  impose their own values and assumptions on a
  groupSchein

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Deciphering the concept of culture

• A climate and practices that organisations
  develop around their handling of people
• right kind of culture or a culture of quality
  - certain values
• there are better or worse cultures, stronger or
  weaker (Kotter)

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Shared or held in common

• Observed behavioural regularities when people
  interact the language, the customs, the rituals
• Group norms implicit standards and values that
  evolve
• Espoused values the articulated, publicly
  announced principles and values - product
  quality, price leadership

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Shared or held in common

• Embedded skills special competencies
• Habits of thinking, mental models, linguistic
  paradigms the shared cognitive frames guiding
  perception, thought and language used
• Shared meaning the emergent understandings
• Root metaphors or integrating symbols

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Deciphering culture

• Why not just norms, values, beliefs, behaviour
  patterns, rituals and traditions, etc.
• Culture has two more dimensions
• structural stability
• patterning
• Accumulated shared learning
• History of shared experience

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Culture defined

• A pattern of shared basic assumptions that the
  group learned as it solved its problems of
  external adaptation and internal integration,
  that has worked well enough to be considered
  valid and, therefore, to be taught to new members
  as the correct way to perceive, think, and feel
  in relation to those problems.

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Levels of culture
Visible structures and processes
Artefact
Strategies, goals, philosophies
Espoused Values
Unconscious, taken-for granted beliefs,
thoughts feelings, perceptions
Basic Underlying Assumptions
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The levels

• Artefacts all we see, hear, and feel, e.g.
  architecture, language, technology, products,
  artistic creations, style, emotional displays,
  manners, etc
• The problem is that symbols are ambiguous
• Ones interpretation will be projections of ones
  own feelings and reactions

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The levels

• Espoused values require joint action (social
  validation) enabling observation of outcome
• Requires a shared basis for determining what is
  factual and real
• Cognitive transformation shared value or belief
  shared assumption
• Espoused values can predict what people will say,
  it requires prior learning to predict what they
  will do

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The levels

• Basic assumptions something becomes treated as
  reality theories-in-use
• Thriving for cognitive stability
• psychological defence mechanism

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Questions for w. 50

• Look up 10 large companies 5 domestic and 5
  foreign and their website
• what is their vision of their business
• does it take into account any of the
  discontinuities mentioned here
• What is their mission statement?
• What is their strategy??
• Corporate values? Espoused values

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Porters five forces
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Strategic Choice
Environmental Analysis
Organisational Analysis
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SWOTgtTWOSgtTOWS

• More than just catchy acronyms
• Concerns competitive situation assessment
• External and internal factors
• External factors
• Threats and opportunities
• Internal factors
• strengths and weaknesses

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• Political/regulatory
• economic
• social
• technological

Environm.
External opportunities threats

• Market size and potential
• customer behaviour, segmentation
• benefits sought
• suppliers, distributors, substitutes
• potential entrants
• industry profit trends

Market/Industry environment

• Performance, capabilities
• strategies, intentions

Direct competitors
Internal strengths weaknesses

• Ability to conceive/design,
• source and produce,
• market and service,
• finance, manage

Skills and resources

• Description of strategy
• performance vs. objectives

Analysis of current strategy
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The External Environment
Macro-Environment
Industry Environment
Demographics
Economic
Competition
FIRM
Suppliers
Customers
Substitutes
Social
Global
Political/Leagal Technological
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Some Strategic Environmental Factors