The foundations of our methodology are held together by the empirical definition of strategy ie strategy is taking a set of actions to create a defendable position in an industry to cope with environmental forces and change. The result of the same is a superior return on investment for the organization.
In a ground-breaking article, Michael Porter stated: "What turns a marketing concept into a strategic positioning is the tailored set of activities that make it work." In today's view, competitive advantage comes from the way the firm's activities fit together, reinforce one another, and optimize effort. According to current thinking, the components of strategy include the following:
- Strategy is what the organization does, where and how it competes. It is a set of actions;
- Competitive advantage is what the strategy exploits in the marketplace; and
- Economic value is the organization's profit in excess of what is required by its stakeholders.
- Choose a unique set of activities that build distinctive strengths, competencies, resources;
- Use these activities to create a unique customer or product/service position;
- Build fit: an integrated system of reinforcing activities that optimize overall efforts, not a collection of parts; and
- Provide leadership that communicates the organization's distinctiveness, resists blurring the strategy.
The methodology that we will apply to support the formulation and preparation of the Five-year Pioneer Corporate Strategic Plan is driven by the Pierce and Robinson Strategic Management Model, that is diagrammatically represented on the next page of this document.
This Model is an empirically proven, 360o, internationally recognized approach to the generation of a Grand Strategy, the splitting of the Grand Strategy into Operating strategies, and the institutionalization of the same to precipitate management's control of the Corporate Strategy implementation and their ability to effectively evaluate its implementation progress.
The Model is a typically a "top-down" approach that naturally begins with the definition of an organization's Vision, Mission, and Values. The organization is then critically assessed for its current internal state and key desired strategic initiatives. Analysis then moves to the external environment after which the organization would be in position to define its Long-term strategic objectives. The Model has a phenomenal method for the proper identification of the organization's Grand Strategy, that will be represented by a Strategy Map and translated into an organization Balanced Scorecard Base.
Annual objectives and strategies would then be extracted and appropriate policy actions and alignment agreed. Last, but by no means least, the Model will continue to define how the organization's strategy would be institutionalized, controlled, and evaluated.
Our Base Model will be complemented by the following strategic planning tools:
- PESTLE (Political, Economic, Social, Technological, Legal and Environmental) Analysis tool, for analyzing the general environment;
- Porter's 5 Forces Model (Supplier Power, Barriers to Entry, Buyer Power, Degree of Rivalry, Threat of Substitutes), for analyzing, specifically, the public transport environment;
- SWOT Analysis tool, for determining the company's Strengths, Weaknesses, Opportunities and Threats;
- Business Value Driver Sensitivity Matrix, to isolate the critical business value drivers around which the success of the company must be built;
- The Boston Consulting Group (BCG) Growth Share Matrix (GSM), in order to determine the appropriate Grand Strategy for the company;
- The Harvard Business School Balanced Scorecard
- The Harvard Business School Balanced Scorecard methodology (BSC) in order to construct the Grand Strategy and Operating Strategies Maps;
- The Performance Prism, to support the institutionalization and entrenchment of the company's strategy.
The preparation of a client's Corporate Strategic Plan will comply with the Massachusetts Institute of Technology (MIT) Business School's International Business Writing Code.
Our Strategic planning projects are typically split into five (5) phases, as follows:
- Strategic Planning Information Gathering and Synthesis.
- Strategic Planning Event Pre-Planning.
- Strategic Planning Event Execution.
- Strategic Plan Preparation.
- Strategic Plan Sign-off and Hand over.
We believe that the Strategic Planning Event should draw on client staff from all of the three strategic levels of the client organization, ie the Corporate, Business and Functional levels.
Our detailed planning for the actual Strategic planning project will be completed after having scoping and planning discussions and meetings with the client.