Guy Harley

1

• Guy Harley
• Bachelor of Law (University of Adelaide 1978)
• Barrister and Solicitor in Adelaide for 18 years
• Master of Business (eBusiness) (University of SA
  2001)
• Contact Information
• [phone]
• guy_at_harley.net.au

2

• Dates for 2nd Semester
• Classes start 14 July
• Tutorials start 21 July
• Classes finish 29 September
• Exams 9 to 16 October

3

• Course Assessment
• Exam 70
• Internal assessment 30
• Essay plan 18th August 2004 - 5
• Essay 8th September 2004- 25
• To pass subject, students must
• 40 or more in exam, and
• 50 or more overall

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• Course Assessment (cont.)
• Penalty for late submission of assessments is 5
  per day off maximum possible mark
• Extension are only granted for serious medical or
  personal events.
• Requests for an extension must be made in advance
  and must be accompanied with medical or other
  evidence.
• Students who miss assessments because of illness
  must provide a medical certificate within 72
  hours.
• Students must complete an assessment cover sheet
  (lecturer must sign it).

5

• Plagiarism
• Copying the work of someone else and passing it
  off as your own
• Failing to acknowledge the source of information
  you have used
• Plagiarism is STEALING
• You will receive a mark of zero for a
  substantially plagiarised assignment
• If you plagiarise more than twice you may have
  your enrolment cancelled

6

• Text Book
• Hanson Dowling, 2003, Strategic Management
  Competitiveness Globalisation A Pacific Rim
  Focus, Thomas Nelson, Australia

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• Resources
• www.harley.net.au
• Lecture slides
• Tutorial exercises
• Notices
• Course outline including assessment
• Links
• Writing guides

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• Resources (cont.)
• La Trobe IT web site
• http//ironbark.bendigo.latrobe.edu.au/courses/sub
  jects/Subjects.html
• A.C.N. Website
• http//resource.auscampus.net
• Libraries
• LaTrobe Online
• UTS

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• Academic Support
• Thursdays 12.00pm 2.00pm help with planning
  assignments, study skills, reading writing
• Essay writing for exams Mon 29 March 5 April,
  4.30pm 6.30pm
• Answering multiple choice questions Mon 3 May
  4.30pm 6.30pm
• Answering short answer questions Mon 17 May
  4.30pm 6.30pm

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• What is required of you?
• Spend the same amount of time in private study as
  you do in class
• Read textbook and notes every week
• Attend lectures and TAKE NOTES
• Prepare for tutorials in advance
• Be prepared to ask and answer questions
• Complete all assessments on time
• Participate fully in all group activities

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• Do you want to pass this subject?
• In an Australian university learning is YOUR
  responsibility. It is up to you to be self-
  disciplined and keep up to date
• Begin reading your textbook TODAY
• Attend free classes on essay writing
• Ask your lecturer to explain if you dont
  understand something.
• Give priority to your study over part time work

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Strategic Management Competitiveness

• Hanson Dowling Chapter 1

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• Strategic Competitiveness
• Where a firm formulates and implements a value
  creating strategy
• Sustainable Competitive Advantage
• A value creating strategy that other firms
  cannot easily duplicate
• Strategic Management Process
• The set of commitments, decisions and actions
  required for a firm to achieve strategic
  competitiveness

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External Environment
Internal Environment
Strategic Intent Strategic Mission
Strategy Formulation
Strategy Implementation
Strategic Competitiveness
Above Average Returns
Feedback Loop
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• Strategy - A Continual Challenge
• 30 of companies in Australias top 100 drop off
  every 10 years.
• Andrew Grove - Intels former CEO
• Only paranoid companies survive
• Anticipate the unexpected

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• 21st Century Competitive Landscape
• Convergence
• The Global Economy
• Globalisation
• Technology

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• Convergence
• Industries
• Technologies
• The Global Economy
• Goods, services, people, skills ideas move
  freely across geographical borders
• Europe has replaced USA as worlds largest single
  market
• Countries pursue a national competitive advantage

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• Globalisation
• The spread of economic innovations, together with
  political cultural adjustments, around the
  world
• Encourages international integration
• Global corporations
• Global standards
• Emerging economies
• Challenges
• Managing diversified operations
• New skill sets for foreign environments
• Maintaining concentration on domestic market

21

• Technology
• Increasing rate of Change Diffusion
• Shorter product life cycles
• Promotes first mover advantage
• Reduces protection from patents
• Information Age
• Speed Reach of dissemination
• Networking
• eBusiness

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• Technology (cont.)
• Knowledge Management
• Capture
• Transform
• Distribute
• Exploit

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• Strategic Agility
• Ability to respond quickly to changes in the
  environment
• Requires organisational learning

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• Strategic Models
• Industrial Organisation Model
• Emphasises influence of external environment
• Resource Based Model
• Emphasises firms internal resources
• Research
• 20 of profitability comes from industry
• 36 from firms characteristics actions
• Use both together

25

• Industrial Organisation Model
• Challenges firms to
• find most attractive industry in which to compete
• then develop internal skills

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• Industrial Organisation Model (cont.)
• 4 underlying assumptions
• External environment imposes pressures
  constraints that determine strategy
• Firms in an industry have similar resources
  strategies
• Resources used to implement strategies are mobile
  across firms
• Organisational decision makers are rational

27

• The Industrial Organisation Model of Above
  Average Returns

Feedback Loop
Study External Environment
Select Attractive Industry
Above Average Returns
Strategy Formulation
Strategy Implementation
Acquire Assets Skills
28

• Industrial Organisation Model (cont.)
• Promotes strategies of
• Cost-leadership
• Differentiation
• Focus-differentiation
• Uses 5 forces model to analyse external
  environment

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Porters 5 forces
Substitute Products
New Entrants
Traditional Competitors
The firm
Suppliers
Customers
30

• Resource Based Model
• Assumes
• Each organisation is a collection of unique
  resources and capabilities
• Differences in firms performance are driven by
  differences in firms resources and capabilities
• Over time firms develop different resources and
  capabilities
• Not all firms in an industry possess the same
  resources and capabilities
• Resources may not be highly mobile across a firm

31

• The Resource Based Model of Above Average Returns

Feedback Loop
Resources
Capabilities
Above Average Returns
Competitive Advantage
Strategy
Attractive Industry
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• Resources
• 3 types
• Physical
• Human
• Organisational
• Capability
• The capacity for a set of resources to
  integratively perform a task

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• Dimensions

Task
Technology
People
Structure
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• Competitive Advantage
• Occurs when resources and capabilities are
• Valuable,
• Rare,
• Costly to imitate, and
• Non-substitutable
• They are valuable when they take advantage of
  opportunities or neutralise threats
• When all 4 criteria are met they become core
  competencies

35

• Strategic Intent
• The leveraging of a firms internal resources,
  capabilities and core competencies to accomplish
  the firms goals in a competitive environment
• Exists only when all levels of the firm are
  committed to a specific and significant
  performance criterion
• A firm must also identify its competitors
  strategic intent

36

• Strategic Mission
• A statement of a firms unique purpose and scope
  of operations in product and market terms
• Flows from Strategic Intent
• It is externally focused

37

• Stakeholders
• Individuals and groups that
• Affect or are affected by the strategic outcomes
  achieved, and
• Have enforceable claims on a firms performance
• Firms depend on stakeholders
• Stakeholders can influence a firms operations

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• Classification of Stakeholders
• Capital Market Stakeholders
• Shareholders
• Suppliers of capital (e.g. banks)
• Product Market Stakeholders
• Customers
• Suppliers
• Host communities
• Unions
• Organisational Stakeholders
• Employees
• Managers

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• Managing Stakeholders
• Firm must manage and prioritise competing
  stakeholder demands
• Societys standards influence the weightings
  allocated amongst the 3 stakeholder groups
• Different cultures have different weightings
• A Transnational firm must have a global mind-set

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• Strategy Success Factors
• Hard work
• Thorough analysis
• Brutally honest
• Common sense
• Speed Flexibility
• Acceptance of change innovation
• A desire for the firm and its people to
  accomplish more
• Encourage others to think and enquire what firm
  is doing and why

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• Strategy Pitfalls
• Changes in strategic assumptions
• Strategic mission may become a strategic blinder
• Operational routines create strategic inertia
• Established relationships prevent change
• Shared beliefs become dogmas that prevent a
  change in organisational culture

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• Organisational Culture
• Definition
• The complex set of ideologies, symbols and core
  values
• Shared throughout the firm
• That influences the way it conducts business
• Includes organisational ethics