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The strategy gap lavaraging thechnology to execute winning strategies - Goveney M.

Goveney M. The strategy gap lavaraging thechnology to execute winning strategies - Wiley & sons , 2003. - 242 p.
ISBN 0-471-21450-7
Download (direct link): thestrategygapleveraging2003.pdf
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Hugh Courtney makes a distinction among four levels of uncertainty:
Level 1. Clear enough future. The path forward is clear enough to predict the future with a high degree of probability. Companies with stable brands or companies in industries with stable regulations, low rates of technical innovation, and high barriers to entry often face this level of uncertainty. For example, Microsoft probably can predict with a high degree of certainty the nearterm demand for its Office products. Similarly, a food manu-
28
Strategy in the Next Economy
facturer like Kellogg probably can predict the overall market for a large number of its product lines.
Level 2. Alternative futures. The path forward consists of a number of mutually exclusive and exhaustive possibilities, one of which is likely to be chosen or win. This sort of uncertainty is often seen in the world of technology standards. Examples include VHS or Betamax in the world of VCRs, Windows PCs or the Macs in the realm of desktop computers, 2.5G or 3G in the cellular world, and 802.11a versus 802.11b and 802.11g in the wireless world. In each of these cases there was or is no way to predict the eventual winner at the outset, although the alternative possibilities were or are pretty clearly delineated. This sort of uncertainty also arises with pending regulatory and statutory changes. For example, there may be a number of pending legislative alternatives before a regulatory body pertaining to a particular issue (prescription drugs for the elderly, e.g.). There is no way to predict with certainty the outcome of the legislation.
Level 3. Range of futures. The path forward consists of a range of alternatives rather than a set of point outcomes. Uncertain product demand is often of this sort. In the future, how much demand by the airlines will there be for “superjumbo” jets? Over the next few years, how many subscribers will sign up for cable Internet connections? While market research and other types of survey information may help provide a range of estimated demand, they cannot pinpoint the specific demand with any accuracy. Unpredictable macroeconomic conditions play a key role in creating this level of uncertainty.
Level 4. Limited set of future outcomes. The path forward is unknown and unknowable. The range of possibilities appears limitless. Nascent markets like the early days of e-commerce or the current state of m-commerce (e-commerce via mobile devices) are of this sort. This level also characterizes entry into markets after major political, technological, and social upheavals—such as the changes in Eastern Europe during the 1990s—and markets where the time frames are extremely long—such as projecting demand for renewable energy sources decades out.8
From a binary perspective, the world appears to consist of Level 1 and Level 4 uncertainties. From this perspective, there is also a tendency to treat whole industries as if they were one of these two levels. For a given organization, however, uncertainty is issue based, not industry
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The Strategy Gap
based. For a telecommunications company like AT&T, there is likely greater uncertainty in its broadband and cellular divisions than in its long-distance division. Similarly, most of the strategic decisions faced by managers have Level 2 or Level 3 uncertainties. The potential alternatives or range of alternatives are known. The difficulty is in selecting among the alternatives or narrowing the range in a timely fashion. Over time all situations shift from higher levels of uncertainty to lower levels. The unknown becomes known, potential alternatives surface among the range of possibilities, and winners appear from the range of possibilities. If the organization waits too long, the opportunity may pass it by. If it commits too soon, another alternative may come to the forefront.
With uncertainty, timing is not the only issue that makes strategy formulation and implementation difficult. Other questions also arise: Should the organization simply adapt to the changes over time, or should it attempt proactively to shape the market? Should it focus on a particular alternative, or should it address a portfolio of alternatives? Finally, should the enterprise stick with traditional strategic planning tools and frameworks, or should it adopt a newer framework such as real options, real-time systems, or complex adaptive systems? A book cannot answer these questions. The answers really depend on the specific issues facing each organization and the organization’s specific capabilities. However, this book can make the case for sticking with a more traditional system that helps organizations define the strategic issues and determine the level of uncertainty, define the possible alternatives, analyze and select among the alternatives, and monitor and update strategic choices over time.
STRATEGY DEFINED
Given the amount of commentary on the subject, it should be no surprise that the term “strategy” has many definitions. To compound the confusion, the term also is used in combination with a variety of other terms, including corporate strategy, business strategy, functional strategy, strategic thinking, strategic vision, strategic issues, strategic decisions, strategic choices, strategic analysis, strategic planning, and strategic management to name just a few. The common thread running through all the definitions and combinations is the idea that strategy involves a change in the direction and scope of the organization over the long term. It answers the question: Where do we want to go in the future?
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