Management Consulting/strategic managent


Can you please answer the below questions:

1. Explain how the concept of leverage stretch and fit positions the firm in the market. Illustrate your answer with the help of examples.

2. What are ‘Strategic groups’? Explain how the strategic groups help the
organizations in understanding the competition within the industry.

3. Discuss the additional consideration for using experience curve effect.

4. Chose an organization of your choice, which is expanding. Explain which type of intensification strategy the organization is following and why.

5. Explain as to how the quality strategic decisions are affected with the change in leadership. Illustrate your answer with the help of a real world example.


I  will send  the balance  asap.

1. Explain how the concept of leverage stretch and fit positions the firm in the market. Illustrate your answer with the help of examples.

Today’s business landscape has changed, fundamentally… tomorrow’s environment will be different, but none the less–rich in possibilities for those who are prepared–strategic thinking is the new normal.
Strategic thinking is about focusing on higher level business strategies by finding, and subsequently, developing opportunities to create value. It’s a way to focus on and understand the fundamental drivers of your business and continuously challenge the conventional thinking about those drivers. Another way to view strategic thinking is brainstorming and applying ‘possibility thinking’ with the goal of developing a direction and ‘strategic’ goals; it’s a way of thinking that has well-defined, and specific purpose, characteristics.
the most sought after executive skill by corporation was strategic thinking, but that few people have that knowledge and skill set…; strategic thinking involves making a series of decisions about the actions the company intends to take to become more successful. At the heart of strategic thinking is the ability to anticipate major shifts in the competitive marketplace, identify emerging opportunities, and dealing also with limited resources; money, people, time… Strategic thinking is a mindset for change and having plans to deal with it… the ability to embrace the total enterprise by; spotting trends, understanding the competitive landscape, visualizing where the business needs to go, and provide leadership into the future. Thinking strategically is about challenging assumptions about the business– why you do what you do– finding and developing unique opportunities to create value, and breakthrough thinking about the future. However, before strategic thinking; first, there must be a strong foundation of critical thinking– understanding the fundamental drivers that affect your organization and rigorously challenge conventional thinking…
Strategic Fit– is the degree to which an organization is matching its resources and capabilities with its opportunities. The matching takes place through strategy, and it’s vital that the company have the actual resources and capabilities to execute and support the strategy. Strategic fit is related to the resource-based view of the firm which suggests that the key to profitability is, not only through positioning and industry selection, but rather through internal focus which seeks to utilize the unique characteristics of the company’s resources and capabilities. Strategic fit can also be used to evaluate specific opportunities; alliances, partnerships, joint ventures, M&A… For example; strategic fit for M&A refers to how well the potential business acquisition fits with the planned strategy of the acquiring company. A survey conducted by ‘Bain & Company’ showed that 94% of interviewed CEO’s considered the strategic fit as vital for the success or failure of an acquisition…
Strategic Alignment– is the process and result of linking business strategy and objectives with business units, functions, and employees– it’s more than just a top down process. Strategic alignment is the positioning of a business function in relation to other functions, such that the arrangement can lead to an optimum relationship between the functions or parts. With strategic alignment, it’s possible to improve performance results and gain a competitive advantage. Aligning the organization to external environment requires forethought and proactive actions. Aligning employees’ performance to the strategic direction requires leadership and monitoring. Aligning different functions and resources across the organization requires integration and diplomatic handling of personalities on a variety of levels.
Strategic Intent– is the high-level statement of means by which your organization will achieve its vision. It’s a statement of design for creating a desirable future (stated in present terms).
Strategic intent– simply put, is your company’s vision of what it wants to achieve in the long-term: Strategy must be a stretchexercise, not a fit exercise. The strategic intent must convey a significant stretch for the company; sense of direction, discovery, and opportunity that can be communicated as worthwhile to all employees. A strategic intent creates a picture of the customer’s daily life and describes discontinuities and anticipated changes from the world of today. It describes future customer’s needs and success factors required for meeting these needs.To achieve great things, you need ambitious visions… It does not matter that vision cannot be laid out in details, right now… it’s the direction that counts.
Strategic Stretch– is a goal that cannot be achieved with– what is known, today. Strategic stretch pushes the boundaries of what is assumed to be impossible to strive for… Only when you aim for impossible, something that cannot be achieved with existing practices, is there pressure to come up with radical new ideas, instead of just work harder. According to ‘Frank Buytendijk’; strategic stretch is very much like working with an elastic band. If you only pull it from one side, the other side will move in the same direction. You can only stretch it if you pull from both sides. And the harder you pull in multiple directions at the same time, the more space you create, which is the objective of strategic management. The metaphor of elastic band is very appropriate because it implies that you can’t stop pulling, otherwise it goes back to its neutral position. It’s the same with strategy; you need to keep working on creating strategic stretch, otherwise, the organization will fall back to average results.
Long-term success comes from consistency of effort generated by focused and shared intent throughout the organization: Strategic intent is not just wild ambition. According to ‘Gary Hamel'; ‘strategic intent encompasses an active management process that includes: Focusing the organization’s attention on the essence of winning; motivating people by communicating the value of the target; leaving room for individual and team contributions; sustaining enthusiasm by providing new operational definitions as circumstances change; and using ‘intent’ consistently to guide resource allocation.’ Once strategic intent is established resources can be leveraged by focusing them on key goals, acquiring them efficiently, combining one with another to add value, carefully conserving them, and recycling them in the shortest possible time. Hamel is not alone in thinking strategic planning has failed because companies trim ambition to match available resources. ‘Peter Senge’, talking about the importance of maintaining visionary goals, says‘… the dynamics of eroding goals… lies at the heart of the demise… of many U.S. manufacturing industries….’  Companies who trim ambition find themselves at the mercy of circumstances, and without leverage. Senge draws heavily on the work of ‘Robert Fritz’ who has developed an approach to creating high-level results that bears a remarkable similarity to strategic intent, which Senge says ‘forms the cornerstone to help leaders and managers deal productively with complexity and change.’
Global competition is not just product-versus-product or company-versus-company. It’s mindset-versus-mindset. Driven to understand the dynamics of competition, we have learned a lot about what makes one company more successful than another. But to find the ‘root of competitiveness’– to understand why some companies create new forms of competitive advantage, while others watch and follow– we must look at the strategic mindsets. For many managers, being strategic means pursuing opportunities that fit the company’s resources. This approach is not wrong, but it obscures an approach in which ‘stretch’supplements ‘fit’, which means creating chasm between ambition and resource… and where leverage complements the strategic allocation of resources. Managers at competitive companies can get a bigger-bang-for-the-buck in five basic ways: Concentrate resources around strategic goals; accumulate resources more efficiently; complement one kind of resource with another; conserve resources whenever they can; and recover resources from the market-place as quickly as possible…
“Stretch– How Great Companies Grow in Good Times and Bad” by Graeme Deans writes:  Only a few companies in the world are able to stretch their business and capabilities along several dimensions simultaneously to achieve growth… Most business build their growth strategy based on solid; operations, organization, and strategic growth initiatives, however, there are places in business where a stretch growth idea might take root. For example, you can  look at your product offerings to see if you have opportunities to stretch your customer base, your customer service levels, or level of convenience and customization you provide. You might stretch your value chain or business model, your geographic reach, or your partnership and risk-sharing approach to improve growth. You might stretch the way you go-to-market through your distribution channel strategy, or branding. You might look to new technologies to stretch your entire company. Or, you might try to stretch in several directions at once and find the ideal combination of growth
ideas that will boost your company to the next level of performance. The path to getting there isn’t flashy or quick, but with flawless execution and unwavering focus, sustainable, superior growth is a goal that any company can reach.
Traditional strategic development is a process that involves auditing a business’ current markets, competitors, resources… followed by strategic formulation and implementation. However, ‘Hamel and Prahalad’ proposed a broader view of strategic formulation, calledstrategic intent, focusing instead on; business capabilities, collaboration, and innovation to achieve revolutionary improvement. According to ‘Gadi Ben-Yehuda'; organizational decisions in companies that employ strategic intent differ from traditional strategy planning methods: They communicate a supportable goal, establish criterion to measure progress, and create active management processes. For example; Toyota’s hoshin kanri system has successful incorporated the  strategic intent principles. According to ‘Eton Lawrence'; strategic thinking … is not only critical to the survival of the organization in these times of rapid and accelerating change, but more importantly, can be effectively accommodated within a progressive strategy-making regime to support strategic planning … strategic planning and strategic thinking work in tandem, rather than when strategic planning impedes the flourishing of strategic thinking. As ‘Jeanne Liedtka’ suggests;strategic thinking is about disrupting alignment to create a view of a preferred future, while strategic planning is about creating alignment and dealing with current realities. As ‘Loizos Heracleous’ suggests; the purpose of strategic thinking is to discover novel, imaginative strategies which can re-write the rules of the competitive game; and to envision potential futures, significantly different from the present. Bottom line: The goal for strategic thinking is to develop strategies that align an organization’s future direction (or vision) with the future environment to gain competitive advantage.
Think of strategic thinking as the ‘what you want’ component and strategic planning as the ‘how can I get what I want’ factor.

2. What are ‘Strategic groups’? Explain how the strategic groups help the organizations in understanding the competition within the industry.

A strategic group is a concept used in strategic management that groups companies within an industry that have similar business models or similar combinations of strategies.

A strategic group is defined as a group of corporations that employ the same or similar strategies in a particular industry. Hunt discovered that some companies follow very different strategies when compared with other companies in the same market and classified uniform industry sub-groups based on their value adding chain.
Those sub-groups, which display similar behaviour along key strategic dimensions, were called strategy groups. Porter discovered that individual strategic group members face similar threats and opportunities in the competitive market. Furthermore, similar resource configurations form protective barriers around the strategic groups.
The strategic behaviour and performance within a strategy group are very similar. The industry may consist of several or only one strategic group. A strategic group may consist of one or more members. (Müller-Stewens 2005
1 Foundation of Strategic Management
This first unit will review the central concepts in strategy like vision, mission, and company values. Classical External-Internal diagnosis will be discussed. Then the course will turn to more advanced methods and tools. It will analyse concepts and scope of business strategy including scenarios and options how to shape and assess strategy implementation in the course of actions. The course will critically review elements of strategic management to discuss the contexts in which they are best applied. Finally the course will address strategic options (specialisation, diversification, integration) and how to integrate analysis at the SME level.
Module Strategic Diagnosis
This module contains the following units:
2 The external Environment
This unit includes the study of the organizational environment to pinpoint environmental factors that can significantly influence operations. It will train the managers to understand what is happening both inside and outside their organization and how to integrate the environment in the strategies developed. In order to perform an environmental analysis, managers must understand how organizational environments are structured. The course will include contextual and transactual environment, Porters 5 forces model, Industry structure and strategic groups model. Competitive or technological threats are highlighted.
3 The internal Environment
The SME's strengths and weaknesses and areas of specialization are analyzed. Financial, strategic and operational factors and resources are considered and adequacy of cost is calculated. The opportunities open to the SME are diagnosed and its growth potential assessed. The critical information - business structure and operations, company history, major products and services, key skills, knowledge and abilities and executive biographies is updated. The SME's Strategy is checked of adequacy and is benchmarked in comparison with competitors. Finally a very short overview of motivation and leadership strategies is given.

Module Formulation of Strategy
This module contains the following units:
4 Business Level Strategy
A SME positions itself by leveraging its strengths. Michael Porter has argued that a firm's strengths fall into one of two categories: cost advantage or differentiation. By applying these strengths in either a broad or narrow scope, three generic strategies result: cost leadership, differentiation, and focus. These strategies are applied at SME level. Franchising is discussed as an option for SME´s.
5 Vertival Integration for SMEs
Vertical integration is the extent to which an SME controls its inputs and the distribution of its products and services. A SME's control of its inputs or supplies is known as backward integration. A SME´s control of its distribution is known as forward integration. Small scale vertical integration is commonly known as Supply Chain Optimization or also as Supply Chain Planning. This unit analyzes an SME's vertical integration strategy. Shows benefits, costs and risks of vertical integration and shows how vertical integration can be included in a SME's strategic management.
6 Internationalisation for SMEs
The central objective of this unit is to develop effective managerial and business leadership skills for dealing with those management issues that arise when firms do business across nations. The unit focus on SME's and the possibilities for going international. It will analyze costs and risks and shows how internationalization strategy can be included in an SME's strategic management.
7 Diversification for SMEs
Diversification strategies are used to expand firms' operations by adding markets, products, services, or stages of production to the existing business. The purpose of diversification is to allow the company to enter lines of business that are different from current operations. This unit focus on SME's and the possibilities for diversification. It will analyze portfolios and shows how they can be planned and managed.
8 Business Development
The Business Development Strategy is used to underpin your main Business Plan and essentially it sets out a standard approach for developing new opportunities, either from within existing accounts or by proactively targeting brand new potential accounts and then working to close them. The unit will analyze mergers, acquisitions and strategic alliances and will demonstrate how they can be included in strategic management of SME'S
Module Implementation of Strategy
This module contains the following units:
9 Strategy Implementation
This unit aims to turn strategies and plans into individual actions, necessary to produce a better business performance. Now that the SME's know their businesses, and the strategies required for success they translate the theory into action plans that will enable the strategy to be successfully implemented and sustained. The unit will demonstrate methods for effective strategic corporate implementation and detail a process-based approach. It will link performance factors with strategic initiatives and with policies designed to develop and optimise the SME.
10 Quality Control and Quality Assurance
The final unit discusses most important practical IT solutions and concepts like ERP. It will also demonstrate some of the most important quality assurance concepts suitable for SMEs including total quality management, six sigma, and BPR. Finally the unit will show how evaluation, monitoring and feedback cycles can be used for continuous improvement of the company.

How do I conduct a Strategic Group Analysis?
   To distinguish between strategic groups within a sector and to analyse the differences in their behaviour, the following criteria can be used :
•   Vertical and horizontal integration
•   Geographical market segmentation
•   Ownership structure
•   Company size
•   Capacity utilization
•   Cost structure
•   Sales channels
•   Marketing activities
•   Brand ownership
•   Product diversity
•   Product quality
•   R & D capability
In order to visualize the segmentation of strategic groups, it is useful to design a "map" :
•   For this purpose you have to determine two or more criteria which can help you classify the strategic groups. These criteria form the axis, where you can sketch the segmentation matrix. Make sure you use criteria, which are of high importance in terms of the behaviour of your competitors.
•   Thereafter the companies in the sector will be positioned on the map.
•   The last step is to divide the companies into strategic groups. The companies which are closest to each other form a strategic group. Additionally you can illustrate the market share of the strategic groups by the size of the circles. Such a map is outlined below (the size of the circles does not represent the market shares in this figure):
Click on the thumb nail to enlarge figure 3:Strategic groups within the automotive industry,).
After designing the map of strategic groups you can execute following analysis methods:
•   Analyse the attractiveness of each group by performing a "five forces" analysis on each group. Section 2.2 provides an outline of Porter´s Five Forces model.
•   Identify the mobility barriers that inhibit the movement of firms between strategic groups:
o   The "height" of entry barriers depends on the particular strategic group that the entrant seeks to join
o   Mobility barriers are group-specific entry barriers that restrict the shifting of strategic groups from one position to another
o   Mobility barriers prevent quick imitation of successful strategies
o   The most important aspect of any strategic group analysis is identifying the mobility barriers that impede movement between groups
o   There is no exhaustive list of mobility barriers
o   #############################  

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Leo Lingham


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