Video instructions and help with filling out and completing Will Form 5495 Strategies

Instructions and Help about Will Form 5495 Strategies

Since this is a strategy course it seems only natural to start with a discussion of what strategy is and what it isn't first consider the following strategy statements drawn from actual documents and announcements from well-respected companies our strategy is to be the low-cost provider we are pursuing a global strategy the company's strategy is to integrate a set of regional acquisitions strategy is to provide unrivaled customer service chick intent is to always be the first mover our strategy is to move from defense to industrial applications what do these strategy statements all have in common well first of all none of them are actually strategies they represent tactics goals objectives and descriptions but not strategies they are mere strategic threads small components of overall strategies the problem is that in recent years strategy has become something of a buzzword whenever we want to sound smart and demonstrate our business acumen we just make sure the word strategy shows up in our ideas the result is that we now refer to many mundane and uninteresting aspects of the business as being strategic when there are really only small pieces of the overall business strategy so then what is the strategy being clear about what a strategy is will help us understand more clearly what a strategy is not well the word strategy originally comes from the Greek word Strategos meaning the art of the general in other words the origin of strategy comes from the art of war and specifically the role of the general in a war in fact there's a famous treatise entitled the art of war that is said to have been authored by its son sue a legendary Chinese general around the 2nd century BC strategists consider the art of war to be one of the great masterpieces on strategy in the art of war the goal is to win winning is good and losing is very very bad can you imagine the great Hannibal saying something like our strategy is to beat Rome No Hannibal's goal was to defeat Rome his strategy was to bring hidden strengths against the weaknesses of his enemy at the point of attack to achieve that goal such as crossing the Alps when the enemies did not believe he could the general is responsible for multiple units that must work together to win the battle and the war the way the general adds value to the battle is by providing high-level orchestration and vision that is he can see what the field commanders cannot great generals think about the whole and they work to coordinate all the necessary pieces even sacrificing some pieces when necessary in order to ensure that the overall goal is achieved we sometimes think of businesses modern-day war but the casualties are more frequently investor pocketbooks rather than human lives the challenge of the executive is similar to the challenge of the ancient general the modern-day executive needs to develop a set of complex tactics and activities that lead to a victory so how do we know what our strategy is or if we do not have a strategy how do we formulate one strategy provides clear and concise answers to four key questions first where do we compete other words what competitive arenas or markets will we be active in we define markets as industries product markets within those industries and geographic markets second what unique value do we bring to win in those markets in other words why do our customers choose our products and services when they could have chosen the products and services of any competitor out there our unique value could be cost or differentiation which includes image customization styling reliability etc third what resources and capabilities do we utilize to deliver that value do we have exceptional human capital superior technology unrivaled network connections or a unique reputation resources generally refer to the things we have in our toolbox these things can be tangible such as a diamond mind or an oil field or they can be intangible such as a reputation capabilities generally refer to the things that we can do or our ability to use the things in our toolbox fourth how do we sustain our ability to provide that unique value are there barriers to imitation are there factors that keep our competitors from being willing or able to replicate the value we create for our customers this last question focuses on understanding what factors allow us to continue to win over time so one example of a clearly-defined strategy comes from IKEA IKEA sells relatively inexpensive contemporary Scandinavian style furniture and home furnishings to primarily young white-collar customers all over the world by being the first furniture retailer to put stores in every major country IKEA has greater scale than local competitors the choice of markets has helped IKEA offer their unique value propositions of inexpensive fashionable furniture IKEA sells this furniture in a fun and low-pressure showroom where order fulfillment is usually immediate IKEA is able to sell inexpensive stylish furniture because they've developed excellent design capabilities for inexpensive Scandinavian design but perhaps even more important is the fact that products are designed to be manufactured by suppliers using mass production techniques and then shipped in flat boxes the flat boxes require that final assembly is done by the final customer but this dramatically drops shipping costs because shipping costs are so low IKEA suppliers can manufacture furniture and high volumes and ship it around the globe the complex interdependence of IKEA strategy makes it difficult for competitors to imitate because they don't design their own furniture and their suppliers don't manufacture furniture and high volumes and ship from flat boxes to imitate IKEA they would have to completely change the way they design manufacture and ship their furniture note that we learn what IKEA does but we also learned what IKEA does not do IKEA does not compete in the high-end