Teaching Strategy with TOPSIM-Going Global Prof. Dr. Ralf Dillerup Hochschule Heilbronn

Transcription

1 Teaching Strategy with TOPSIM-Going Global Hochschule Heilbronn

2 Agenda 1. Didactic Concepts for strategy coursees 2. TOPSIM Going Global 3. Integration of the simulation in the strategic concepts 4. Conclusion Seite 2

4 Strategies are integrated in a Business Management System are about to exploit existing and explore new potential success. normative strategic operative Personnel planning & control organization Seite 4

5 Strategy are action plans striving for potential success by positioning a company in its competitive environment and configuring resources. target position with competitive advantage future potential success Corporate Business today today s success Functions environment resources strategic situation Seite 5

6 Planned Strategies result out of rational process. corporate objectives mission objectives normative management strategic monitoring monitoring of assumptions monitoring of implementation - result check environmental analysis company analysis alternative strategic options evaluation of strategic options selection of strategic options planning measures and actions budgeting and organization implement actions strategic analysis strategy formulation/ strategic planning strategy implementation strategic management operative management Seite 6

7 Didactic Concept of a Master Strategy course Theory World Reading Materials Almost Perfect World Going Global Close to Reality World Case Studies Real Business World Board Intros Strategic Analysis Strategic Options Strategy Implementation Seite 7

8 Syllabus Master Corporate Strategy Learning outcomes Teaching methods Course contents Specialities Literatur advanced understanding of differences and specific approaches of strategy critical evaluation of roles and responsibilities of senior management analysis of the functional areas of the business to strategy development observation and comment on the role and task of strategy from a broad business perspective researching and sourcing information to support strategic decision-making. diagnose the core problems of a business and develop proposals to deal with these issues work in interdisciplinary and intercultural teams students must be prepared to read widely outside the subject computer simulation methods such as System Dynamics or TOPSIM The Nature of Strategy Strategic management in different contexts The levels of strategy Understanding strategy development The strategic management process Industry and Competitive Analysis Strategic Analysis of industry structure Porters competitive forces and Rivalry analysis Strategic Capability - Internal analysis SWOT analysis Capabilities and Core competencies Strategic Choices on corporate and business level Strategic decision making and Strategy implementation Lectured every winter semester as joint module with students from our Irish partner university Dundalk Institute of Technology (DKIT) and our students co-teached with staff from both institutions including staff and student mobility Dillerup, R./Stoi, R.: Unternehmensführung, 3. Aufl., München 2011 Seite 8

9 Master Strategy course Impressions Seite 9

11 The WashTech Ltd. Mission Vision Goal We lead with our product FlexWash in our domestic market We want to be the global leader in washing machines Our success is demonstrated by the long term maximization of the XYZ (e.g. Share Price). CEO Region Division Manager Europe Region Division Manager N. America Region Division Manager Asia 1 Region Division Manager Asia 2 Region Division Manager S. America Seite 11

12 World market perspective Produktion Vertrieb Produktion Vertr. Koop. Prod. Koop. Vertrieb Vertrieb Produktion Produktion Produktion Vertrieb Vertrieb Vertrieb Produktion Produktion Produktion Vertr. Koop. Vertr. Koop. Vertrieb Seite 12

13 Initial Situation (Period 0) REGION 1 REGION 2 REGION 3 REGION 4 REGION 5 Europe North America South America Asia 1 Asia 2 Competitors (# in Remaining Market) Market Volume P0 (EUR) ,220,000,000 1,030,000, ,000, ,000, ,000,000 Sales P0 (Unit) 392, , , , ,000 Market Share P0 (in % of Sales) ~ 17 % ~ 19 % ~ 18 % ~ 25 % ~ 22 % Price P0 (EUR) Net Income P0 (MEUR) Seite 13

14 TOPSIM Going Global 7.1 More gaming dynamics with the new market model Corporate Social Responsibility as an influencing factor Re-production of market barriers Global-sourcing strategies Focus on expansion strategies Strategic initiatives: Projects and features Competitiveness-Index reflects the market entry process Market research as an information source New logic for manufacturing and logistic processes Seite 14

15 The "Going Global" Process Market Entry Process 1. Market Selection Which sources of information about market selection are available? 2. Form of Market Entry Which forms of market entry are available? 3. Market Development How can the tools be used to develop the market? Purchasing and Logistics Personnel Finances Seite 15

16 1. Market Selection Market Selection Market Entry Market Development What sources of information about market selection are available? Regional Fact Sheets Business News Market Research Reports Seite 16

17 2. Market Entry Market Selection Market Entry Market Development What forms of market entry are available? Expansion Investment in your own Sales department Investment in your own Production Cooperation Cooperation in Sales Cooperation in Production When, how, and in which region should I invest or cooperate in? Seite 17

18 3. Market Development Market Selection Market Entry Market Development How can the tools be used to develop the market? The Market Model Technology and Ecology Company Image Price Market Knowledge Competitiveness Index Marketing-Mix (4P) Advertising Market Barriers Market Share Sales The Competitiveness Index and the Marketing Mix determine the potential sales for that region. Seite 18

19 The Challenges of the Global Market Block New Competitors and Defend Markets Competitiveness Index Market Barriers Company Image Market Knowledge Seite 19

20 Competitiveness Index Competitiveness Index Market Knowledge Company Image Market Barriers Market Research Awareness Local Production Sales CSR Index Local Suppliers Projects Domestic Region Projects Projects Seite 20

21 Market Research 3 detail degrees Free choice each period Incurs costs Market information, the competition (Remaining market and direct competitors) Essential information for market entry (e.g. Pricing, Competitiveness Assessment, etc.) Seite 21

22 Strategic Positioning Global R&D Global development of technology Global development of ecology Corporate Identity Expenses for Corporate Identity Prioritizing the Markets Prioritizing regions for the automatic redistribution of finsihed goods during supply shortages Seite 22

23 Research and Development Study the technology and ecology central Global technology and ecology level Each possible jumps (max +2 per Period) Fixed Costs (one time) when developing a new level Variable costs (for each unit sold), depending on the current tech and eco level Downgrading (up to 2 levels) in each region possible ( reducing variable costs) Seite 23

24 Logistics and Transport Costs Seite 24

25 Example of a Global Production Strategy World Market Domestic Region Region X Region Y Plant 1 (1 period lead time) Plant 1 (1 period lead time) Production Cooperation (immediately available) Plant 2 (1 period lead time) Seite 25

26 Different Plants Have Different Features Seite 26

27 Projects Region-specific projects are first offered in Period 3 Projects incur fixed costs for 1 3 periods Implementing regional projects can: Reduce market barriers Build up market knowledge Improve corporate image Depending on the project, it can have short or long-term effects The Executive Summary gives concrete information about the current effects and fixed costs Seite 27

28 Learning Goals and Processes Period 1 Period 2 Period 3 Period 4 Period 5 Identification of suitable markets for expansion + Management of the domestic market Determining the expansion strategy Market Selection Competition analysis + Market development Strategy New Market: Africa (Market entry strategy) Competition in several markets Marketing-Mix Domestic Region Production Planning Market Research Analyse Market Research Expansion Decisions (Sales) Marketing-Mix for new markets Expansion Decisions (Production) Global Sourcing Delivery Priorities Market Barrier Projects Expansion Decisions regarding Africa Financial Decisions Plan Values CSR Project Marketing-Mix Africa Optimising the Global Supply Chain 28 Seite 28

30 Planned Strategies result out of rational process. corporate objectives mission objectives normative management strategic monitoring monitoring of assumptions monitoring of implementation - result check environmental analysis company analysis alternative strategic options evaluation of strategic options selection of strategic options planning measures and actions budgeting and organization implement actions strategic analysis strategy formulation/ strategic planning strategy implementation strategic management operative management Seite 30

31 Realized strategies include planned and emerging strategies. rejected strategies realized strategies Seite 31

32 Strategic Analysis Process industry analysis market analysis opportunities & threats customer analysis strategic situation competitor analysis competen ce analysis resource analysis business model strengths & weaknesses SWOT-Analysis competitive strategies Marktorientierte market based strategies Strategien market strategies customer strategies dynamic strategies Ressourcenorientierte resource based strategies Strategien competenc e strategies resource strategies business model strategies strategic options Seite 32

33 Integration of Strategic Concepts PEST-Analysis Generic Competitive Strategies Strategic Planning Porter s Diamond Industry Structure Analysis: 5 Competitive Forces Prognosis of the Industry s Profitability Models of Internationalization Detailed Analysis of Competitive Advantage SWOT-Analysis Competition Analysis Strategic Groups Strategy Evaluation (e.g. via EVA) Reduction Strategy Integrated operation planning (business plan for individual regions) Seite 33

34 SWOT-Matrix listing of Strengths (S) listing of Weaknesses (W) Internal factors listing of Opportunities (O) listing of Threats (T) external factors S-O-Strategies expand S-T-Strategies secure W-O-Strategies overcome W-T-Strategies avoid Seite 34

35 Task Example SWOT Asses your results of test period 1a and define your lessons learnt (TOP 10 lessons summary) Redo period 1 (max. change of 3 decisions) Define your strategic situation using a SWOT with the top 5 strength weaknesses opportunities and strength. Please do not combine into SO strategies etc. but define 5 strategic challenges from the SWOT situation you need to solve in the future. Results: TOP 10 lessons learnt summary (max 1 page) Decisions for test period 1b (deadline 8pm) CEO nominated Deadline 24/03/14 latest 10pm Seite 35

36 Task Example Strategy formulation Define for the strategic option with target positions you are striving for. Market Segment Niche Market Characteristics in Size, Growth and Profitability and Risk Key Products and their position in the product lifecycle Customers portfolio and the selling point for the main customers Competitors and the competitive advantage against the main competitors Strength and Weaknesses profile Strategic Success Factors Risk situation Changes in the business model Seite 36

37 Marktstrategien Question marks Stars high low market growth?.? Poor dogs.?. Cash cows. relative market share low high YMP 2014 Learning Seite 37

38 Internationalization strategies high low globalization global international transnational multinational low localization high Seite 38

39 Task Example BSC Define your targeted competitive advantage and the key success factors enabling this target competitive advantage (analysis methods and theory on strategy may be helpful ). Summarize your strategy. Translate your strategy in a balanced scorecard: The BSC has to include a value based key performance indicator for sustainable growth measured with the Return on net asset (RONA) and a target level of 8%. Define the key figures in a Balanced Scorecard logic with a maximum of 20 (smart) targets and measurements covering all four scopes. Describe the measurements with absolute and relative points of reference (internal / external). Result: No presentation in the plenum Summarize strategy in 5 sentences Written description of the Strategy (1 page) Balanced Scorecard Deadline 17/11/ am Seite 39

40 Task Example Performance Reviews After outlining and implementing a strategy in your company its time to analyze the results. Therefore one part is to define your position in the market. Based on this result you should be able to determine the strategic and operative actions. To do this analysis you need to develop a market analysis tool including the result of the last periods and a forecast. Deadline xxxx Every Monday you have to elect another CEO for the Hot Chair Session. In this meeting the CEO has to illustrate the strategy work and defend the decision of the last period within 5 minutes. The schedule of the meetings will be published on Monday morning Seite 40

41 Task Example Press Conference Formal Aspects Presentation in the Plenum of min Every Team Member takes over one part of the presentation Q&A Session Total time per Team 30 min Content 1. Strategic Situation: SWOT & Strategic Challenges 2. Strategy with strategic targets using a Strategy Map 3. Internationalization Strategy: Market selection (portfolio) & entry form (creation cooperation) 4. Performance summary using the performance overview chart provided 5. CEO Speech on situation, strategic achievements and perspectives Seite 41

43 Conclusion DkIT student, Asif Ali I can hardly believe how much I have learned in such a short period of time. I have really learned how to prioritise and how to make complex strategic decisions. This experience is developing me as a person and boosting my self-confidence. Working with different nationalities makes me think we should celebrate diversity more. We all have so much to learn from each other. Heilbronn student, Max von Wirth I am so challenged by this I have moments where I hate it! As soon as I see the results I love it again! Heavens, I am learning! Seite 43

44 Teaching Strategy with TOPSIM-Going Global Hochschule Heilbronn