The Mind of the StrategistThe Art of Japanese Business1982A Book by Kenichi Ohmae

Presented by Lakan Bautista

The Author ”Mr. Strategy”

Adviser to top management, Author, Speaker

Senior design engineer for Hitachi

Director of McKinsey

Co-founder of McKinsey’s strategic management practice

5 books on strategy, 25 articles

BS in Waseda University

MS Tokyo Institute of Technology

PhD in Nuclear Engineering MIT

Vital Stats

283 Pages

Copywright 1982

3 Parts, 17 ChaptersPart 1 The Art of Strategic Thinking (1-7)

Part 2 Building Successful Strategies (8-12)

Part 3 Modern Strategic Realities (13-17)

3C's Model

The 3C’s model points out that a strategist should focus on three key factors for success. In the construction of a business strategy, three main players must be taken into account: The Corporation The Customer The Competitors

Also called the strategic triangle

The Customer

Clients are the base of any strategy Segmenting by objectives

Different ways that various customers use a product. Segmenting by customer coverage

Trade-off study of marketing costs versus market coverage. To optimize its range of market coverage, geographically and/ or

channel wise. Segmenting the market once more

It is useful to pick a small group of customers and reexamine what it is that they are really looking for.

A change in market segment means that the allocation of corporate resources must be shifted and/ or the absolute level of resources committed in the business must be changed.

The Competitors Competitor based strategies can be constructed by looking at possible

sources of differentiation in functions such as: purchasing, design, engineering, sales and servicing. The following aspects show ways in order to achieve this differentiation:

Power of image Image may be the only source of positive differentiation.

Capitalizing on profit- and cost structure differences The difference in source of profit might be exploited, from new products

sales etc. A difference in the ratio of fixed costs and variable costs might also be

exploited strategically. A company with lower fixed cost ratio can lower prices in a sluggish market

and hence gain market share.

The Corporation

Selectivity and sequencing It can gain decisive edge in one key function, it will eventually be able

to improve its other functions which are now average. Make or buy

It subcontract a major share of its assembly operations Cost-effectiveness

Reduce basic costs Exercise greater selectivity (orders accepted, products offered,

functions performed) share certain key functions with a corporation’s other businesses or

even other companies.

KO Update

Next Global Stage: The: Challenges and Opportunities in Our Borderless WorldCopyright 2005

Kenichi Ohmae School of BusinessEstablished 2005MBA through Distance Education

Summary (Ohmae)

Successful business strategies result not from rigourous analysis but from a particular state of mind. In what I call the mind of the strategist, insight and a consequent drive for achievement, often amounting to a sense of mission, fuel a thought process which is basically creative and intuitive rather than rational.

The mind of the strategist has intellectual elasticity

Limits for Business Strategists

RealityBe aware of the 3Cs (customers, competitors,

corporation) Ripeness

Timing Resources

Capacity for diversification

Examples

(Reality) Matsushita, Hitachi, and Toshiba are hurting because they were able to produce better TVs.

(Ripeness) American and European manufacturers lost their edge since they resisted automation early on.

(Resources) EMI developed the first CT scanner, but did not have resources so GE, Philips, and Siemens used R&D resources to improve the technology

Summary (LB)

The mind of the strategist is an intuitive, creative, and passionate mind.

The strategist is someone who asks why and doesn’t stop asking.

Framework:

?Ask why

The End