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Dynamic Strategic Alignment Essay

4052 words - 17 pages


Dynamic Strategic Alignment

This reference note was prepared by Professor Steven White to introduce basic concepts and a framework for discussing strategic management. Copyright © 2009 by CEIBS (China Europe International Business School). No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the permission of CEIBS
The CEIBS Case Centre is sponsored by McKinsey & Company.

Dynamic Strategic Alignment


Dynamic Strategic Alignment
This note introduces the concepts and frameworks that are commonly used in strategic ...view middle of the document...

They may state them as “stretch goals” that are far beyond the firm’s current abilities or resources, and that may require new structures, processes or even culture. A strategic plan, in that case, would not only state what goals and actions will be taken, but what changes to make in other features of the firm or environment so that there is adequate alignment. In the particular case of entry strategy, managers must assess the alignment between the firm’s existing internal conditions and the new environment, and then estimate the types of changes they must make to the firm’s internal conditions in order to succeed in the new environment. It may also be necessary to change some aspect of the new environment; for example, changing customers’ preferences or behavior so they will accept a new product or service, or influencing government bodies to change regulations or implement preferential policies.

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Dynamic Strategic Alignment


Resources & Capabilities Goals Businesses & Value Proposition



Structure Systems Culture


2. ENVIRONMENT Although some firms are able to change features of their environment (for example, by lobbying lawmakers for regulatory changes, or introducing innovations that create new markets or make existing competitor’s products obsolete), the environment exerts a strong pressure on most firms and their managers’ decisions. Diverse forces in the environment guide behavior (competitors, laws and regulations, norms of behavior, customer requirements, etc.) and, at the same time, also define the opportunities available to a firm. The key questions that must be answered in an environmental analysis are: What are the stable and changing features of the macro environment that have a significant impact on the firm’s strategic choices and ability to execute its strategy? Managers who are considering whether or not (and if so, how) to enter a new market must understand the features of that industry or business in that market. While there may be similarities, there could be critical differences with their home market or other markets with which they are familiar. Managers must recognize and test their assumptions about similarities, and incorporate knowledge of differences into their strategic entry planning. The additional questions relevant for new market entry are:

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Dynamic Strategic Alignment


How do these features differ from the environment(s) in which the firm currently operates? What are the implications for entry strategy options and execution? The “environment” may be divided into the macro-environment—the broad features of the national or regional environment—and the industry environment. The following sections introduce frameworks for describing key features of each.


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