The Strategic Analysis course is part of a demanding business program offered at Greystone College, Vancouver. We asked our instructor, Pierre Lapointe, what happens in a Strategic Analysis course?
This is a very practical course that uses business case methodology. The first thing we do in the morning is read business news. We look, for example of companies’ business strategies that are current and relevant to the material covered in the course. Most of the time we read about success stories, but we also learn from failures like the current implosion of Blackberry. In addition to Canadian news, students are asked to look for relevant business news from their own country. We leverage the unique international nature of the Greystone College student body to make the course very interesting.
This business news review is part of what is called “environmental scanning”. It is a step in what is referred to as the Diamond-E Framework. We are looking for opportunities, risks, and lessons from the business environment. The purpose of the Diamond-E framework Strategic Analysis is to get clear answers to three questions 1) what do we need to do? 2) what can we do? 3) what do we want to do? We apply analysis models to each of these questions. Models give us processes to reduce the risk of errors when we answer these questions. We value intuition, but we learn to test our “gut feel” with deductive analysis.
What do we need to do?
While being subject to the rules of society, businesses aim to deliver products or services that customers value enough to pay a price that includes a fair profit for the investors in the company. Our strategic models help us identify the opportunities to serve customers better, or serve more customers, or create new products or services. Different models help us look for the risks involved as we consider the economy including our competitors. For example, we study Harvard Professor Michael Porter’s Five Forces Model and apply it to leading companies like Amazon or LinkedIn.
What can we do?
With this second question, we look at what is possible for us to do given the resources (finances, people, knowledge, etc.) we have available. When we examine potential strategies we look at the resources required to execute a strategy and compare them with the resources currently available. This helps us identify “gaps”, areas where we lack the required resources. We then ask two questions: 1) Can we acquire the missing resources? and 2) Does the cost of acquiring these resources invalidate our proposed strategy? Amongst the authors, we study for this question are Jim Collins (author of several books about enduring great companies), and Eric Ries (author of The Lean Start-up, who extracted important lessons from his technology entrepreneurship experiences).
What do we want to do?
This last question examines “management preferences” in choosing business strategies. There are three leverage points when executing business strategy. Does your organization structure match the needs of the strategy? Are the management processes consistent with the needs of the strategy? And the most important leverage point is leadership behaviour. This leads us to examine business leaders. In the course we just completed, students researched and presented about remarkable leaders like Indra K. Nooyi, the Chairperson and CEO of PepsiCo, and Elon Musk, creator of the most successful electric car, the Tesla.
Implementing the chosen strategy
Once strategic proposals have been examined and tested, one of several strategies will be chosen for implementation. Business leaders must then implement the changes required to execute the strategy. So we end the course by examining the change process of corporations. This process is influenced by whether the business can anticipate the change, are reacting to change or are facing a crisis. We study leaders in each of these situations. For example, Jack Welsh who transformed GE in the early 80’s, Alan Mullaly, who re-positioned Ford recently, and for crisis management we studied Steve Jobs and the turnaround of Apple.
The wide breadth of topics covered makes for an interesting but demanding course. Students leave better equipped to contribute to, or lead the strategic decisions of the businesses and organizations they will work for when they return home.