<ul><li>There are always underlining assumptions and biases behind every decision or recommendation.</li><li>Get to know the political landscape, the key stakeholders, shakers and movers.</li><li>Don’t rely too heavily on analytical tools or frameworks when assessing complex problems.</li><li>You will never have perfect information.</li><li>Communicate so that there are no surprises. Keep key people informed of progress.</li></ul>

Five Key Takeaways

The five forces framework does a great job of helping to identify the competitive threats in an industry. But using this tool to estimate the overall attractiveness of an industry is usually not that helpful.The five forces are kind of like the wind, the direction that competition within an industry is moving. Strategy is about positioning the firm relative to the prevailing winds and a way to make sure that the firm gets to where wants to go, no matter what direction the wind is blowing

The Five Forces Framework

<ul><li>Be aware of the politics of the situation and work them into your strategy.</li><li>Preview leaders ahead of time. No surprises.</li><li>Try to anticipate questions members of the top management team might have about your process or your recommendations.</li><li>Keep key players and clients informed of progress.</li><li>Always address the group, not the screen when giving presentations.</li></ul>

Tips For Your Career

<ul>
<li>Different assumptions lead to different outcomes. The real question is, where do those differences come from in the first place?</li>
<li>Know who the critical stakeholders are. Know who can implement the recommendations, and even more important, who can stop them from being implemented.</li>
<li>Have a good sense of the political landscape long before you make your final presentation.</li>
<li>Use both analysis and change management to transform those likely to resist your recommendations into supporters.</li>
<li>Even sophisticated financial analysis can be easily swayed by individual biases or corporate politics.</li>
</ul>

How Strategy Works: Important Points

There are a number of reasons why it may be difficult for one firm to imitate the strategy of another, such as…<ul><li>Team-based skills</li><li>Legal restrictions on imitation</li><li>Reputation or brand</li><li>Switching costs</li><li>Search costs</li><li>Application experience</li></ul>

Imitating A Strategy

<ul><li>Keep in mind whenever you see someone apply one of these analytical tools, whether it’s the five forces framework or net present value analysis or whatever, they are just tools. It’s the skills, interests, and motives of the person using the tool that determine whether the outcome of the analysis is reasonable.</li><li>When managers present a point of view, assume their point of view reflects some combination of how things actually are and how they want things to be.</li><li>Many managers do an analysis to reaffirm what they already believe.</li></ul>

What The Manager Already Believes

<ul>
<li>Value: Is the strategy valuable? Does it increase a firm’s revenues or reduce its cost compared to not pursuing the strategy?</li>
<li>Rarity: Does a firm possess unusual skills or other assets that the strategy would utilize?</li>
<li>Imitate: How long will it take other firms to imitate your strategy? Strategies that are hard to imitate – assuming they are also valuable and rare – are more likely to be a source of long-lasting competitive advantages.</li>
<li>Organization: Is a firm organized to execute and protect its sources of advantage?</li>
</ul>

The VRIO framework To Test A Strategy

Core competencies are activities in the value chain that create economic value, that are rare among a firm’s competitors, and that competitors find difficult to imitate.Technologies by themselves are not core competencies. But actions firms take to exploit these technologies can be core competencies. And they can sometimes be a source of sustained advantage.

Core Competencies

<ul><li>Ability to evaluate business alternatives independently and subjectively</li><li>Working with a team of extremely smart people who can get access to a great deal of good information</li><li>The time to focus on the future of the company rather than being caught up in the day to day responsibilities of running it</li><li>Be well rounded but figure out where your unique area of strength is. Every successful consultant I know has a world-class spike of experience in some area.</li></ul>

The Value Of A Consultant

<ul><li>Have a list of questions prepared before you enter your interview.</li><li>Make it clear that you need to work through your protocol (list of questions) and then just keep going back to it. I usually send mine ahead of the interviewee, along with a summary report of what we know and what we need to know.</li><li>A brief bio and engagement summary prepared in advance will help interviews go better.</li><li>Always ask for names of other people that you should follow up with after the interview is over.</li><li>Always ask for more information sources when you send a thank you note to the people you interview.</li></ul>

Taking An Interview: Strategy Points

Three things to think about when considering cooperating with other businesses within a firm to gain synergies:<ul><li>Will it be good for business? Will it increase revenue or cut costs?</li><li>Could we achieve cost or quality advantages on our own without cooperation?</li><li>Could we realize these advantages by working with an outside provider?</li></ul>

Gaining Synergies

The Five Forces model is widely used to analyze the industry structure of a company as well as its corporate strategy. Porter identified five undeniable forces that play a part in shaping every market and industry in the world, with some caveats. The five forces are frequently used to measure the competition intensity, attractiveness, and profitability of an industry or market.Porter's five forces are:1. Competition in the industry2. Potential of new entrants into the industry3. Power of suppliers4. Power of customers5. Threat of substitute products

In Brief: The Five Forces Model

All of the theories, frameworks, and tactics you learn in business school have their limitations. This is a book about how strategic decisions are made in the real world

What I Didn't Learn in Business School is a compelling read---whether you're a recent business school grad struggling to apply your new knowledge or an experienced leader who already knows that no strategy is created in a vacuum. --Book Jacket.

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Leadership & Management

Meet Justin Campbell. He's a new MBA graduate who's landed a job with a strategy consultancy. His engagement team is on a mission: help HGS Inc., a specialty chemicals firm, define and execute a strategy for exploiting a textile technology the company developed. Justin and his team deploy state-of-the-art strategy tools to analyze the attractiveness of potential markets for the technology. But they soon realize the tools don't help them grapple with the human side of strategy--including political forces swirling within HGS. Everyone involved in the engagement is biased and insecure, brilliant and hardworking, selfish and lazy, loyal and dedicated. Justin and his cohorts aren't "real"--What I Didn't Learn in Business School is a business novel. But they're realistic: they're just like us. Their story reveals the limitations of strategy tools and demonstrates tactics for navigating the messy, human dynamics that can make or break a company's strategy efforts. This engaging book uses the power of story to present potent lessons for anyone seeking to excel at strategy management. It's a compelling read--whether you're an MBA grad struggling to apply what you learned or in the fray and eager to see what MBAs get wrong when they land in the real world.

Gaining Synergies

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Risks of Ignoring The Opportunity Cost

6 of the largest decision-making blunders

Unstoppable