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AllenWeb
Strategic Planning and Strategic
Management
Preparing for the Future while Surviving the Present
Some latest "buzz words" from an article on Strategic Planning in Business Week, and other comments and observations on Strategic Planning, plus knowledge-based information on select important strategic management aspects in business processes.
Jun
98
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The utlimate purpose in developing highly efficient operations is to grow the business and capture a larger market share. But what market? And do we truly understand opportunities that may exist? The last decade or so has been filled with re-engineering efforts and many new productivity approaches discussed in other PSAllen pages. The buzz word "value migration" comes to mind. In some industries, market "growth" is stagnant. This is even a more severe situation where this buzz word has significant application in a company's survival. By definition, value migration is "the movement of growth and profit opportunities from one industry player to another". We have witnessed this in the transportation industry for decades.
Strategic Partnering is the recent trend with the purpose of reducing costs
and increasing market share. This is all part of the strategic planning
and management that any company must do to remain a viable cost-effective
entitity in the current environment. But there is a new wave of thinking
out that embraces competitors and suggests an opportunity for growth that
may be walking on the fringe of legal review (reference to working with
competitors due to possible pricing colussion). This
"co-evolution" theory is "the notion that by working with direct
competitors, customers, and suppliers, a company can create new businesses,
markets, and industries". We have witnessed this in the VSA (vessel
sharing agreements) among shipping companies and the ocean freight conferences
as they have joined together in the past to develop new opportunities but
more often it was to survive downturns in markets and/or be more cost-effective
in the face of depressed freight rates.
One of the phenomenon witnessed over the last couple of decades has been the "diversification" by quite a few major corporation into everything and anything beyond core competencies. This is not to be confused with vertical and horizontal integration that appears rational based on the core business. Another new buzz word is out. It is "white space opportunity" which suggests there are "new areas of growth possibilites that fall between the cracks because they don't naturally match the skills of existing business units". If corporate America has learned anything, it has been to stay out of areas where it doesn't have the skill sets. So how does one pursue these cracks, how does one develop profitable diversification in developing these "unnatural" opportunites? Planning and appropriate training as well as acquisition of those with the right skills to manage the opportunity.
Strategic Intent - a reasoning taught in any strategic management course and defined as "a tangible corporate goal or destiny that represents a stretch for the organization. It also implies a point of view about the competitive position a company hopes to build over the coming decade."
The essence of all the above suggests a "business eco-system." After all, without customers (the market) to "buy" and without capabilities (companies' products, production, or services) to "sell", there is no transaction. Without transactions there will be no business conducted. A business eco-system is a "system in which companies work cooperatively and competitively to support new products, satisfy customers, and create the next round of innovation in key market segments." An example is posed by the question..."who buys buggy whips today?" We should all be happy that innovation is the driving force that brought us the automobile, the airpland and yes,... computers and the internet!
End of excerpts from article in Business Week on Strategic Planning.
Innovation must take place in transportation terminals and distribution centers. While some innovation has taken place there remains a great deal more to do. For example, the maritime industry is an industry that has generally been reluctant to change or accept change view their efforts to stay with the status quo. Some will reach beyond this stagnant thinking. A service company, Federal Express for example, that has continuously improved its delivering the service (delivery of the goods) in a dependable and timely manner. The maritime industry must improve its abilities by demanding shoreside facilities efficiencies in expediting the goods (and the vessels). This must be done to meet growing demands of time and dependability in the supply chain. Companies are spending fortunes to reduce time to market by hours, not just days!!
Automation Strategic Planning - is the ...
