The essence of strategic economic zones. Use of strategic economic centers Strategic economic zones and strategic economic centers

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Demand and Technology Life Cycles

During the first three decades of this century, most SZH had relatively stable growth rates, disrupted by periodic crises, after which they again recovered to the pre-crisis level.

Therefore, firms compared industries in terms of their growth rates and predicted the future by extrapolating current trends.

As already mentioned in Ch. 1.1, the growth pattern began to change since the 1930s. It is important to note that some industries continued to thrive, while in others their growth rates slowed down and some firms experienced declining sales in a number of their SZHs.

At the time when these phenomena first appeared, deviations from the general upward trend were perceived as anomalies, and their reasons were not clearly understood. But the anomalies became more and more, and by the mid-1970s a new understanding of economic growth began to take shape.

This understanding was based on what economists have called the Gompart growth curve for many years. In practical application, it is called the life cycle of demand and technology. This cycle is shown in Fig. 2.2.2

Figure No. 2.2.2. Life Cycles of Demand, Technology and Product

The upper curve in the figure - the life cycle of demand - shows how the typical development of demand takes place from the day when a public need that was not previously met (for example, the need for an individual vehicle, receiving television images at home, amplifying weak electrical signals). began to be satisfied with goods or services.

As you can see in both parts of the figure, the demand cycle can be divided into several completely different periods (phases):

Inception(E) - a turbulent period of the formation of the industry, when several firms, striving to seize leadership, compete with each other
Accelerating growth(G 1 ) is the period when competitors who remain in the market reap the fruits of their victory. During this period, demand usually grows, outstripping supply
Slowdown in growth(G 2 ) when the first signs of demand saturation appear and supply begins to outstrip demand.
Maturity(M) when demand saturation is reached and there is significant excess capacity
Attenuation(D) - a decrease in the volume of demand (sometimes to zero), predetermined by long-term demographic and economic conditions (such as the growth rate of the gross national product or population) and the rate of obsolescence or decrease in the consumption of the product.

From the standpoint of the life cycle of demand, slowdown in growth and maturity are not distortions, but inevitable consequences of economic development. The question is not whether the development of the strategic economic zone will reach a point above G 1 , but in exactly when ϶ᴛᴏ will happen, in other words, what will be the duration of the demand life cycle from the inception to the beginning of saturation.

The material given in 1.2.1 suggests that the life cycle of industries is shrinking, primarily as a result of progressive innovations in management and increasing the efficiency of firms, accelerating development new products, better marketing and sales organization.

This apparent reduction in the life expectancy of the strategic economic zone from inception to saturation of demand poses several new and very large-scale tasks for managers.

In the first half of the century, the manager could expect that the period G 1 enough for the entire duration of his personal career. In the second half of the century, the manager sees many of the firm's activities being born, growing, reaching maturity and declining. I think if a firm wants to support its expansion, its management must constantly be concerned about adding new activities to the set of activities and cutting off those that no longer align with the firm's growth targets... This is the first of the major challenges, and, as we will see later, it will be key in terms of managing a strategic set of industries.

The second problem is related to the fact that as the cycle develops, from phase to phase, traditional strategies of competition usually lose their effectiveness.

This is shown in Fig. 2.2.3, which shows how the main factors of success in SBA change as demand moves into a new phase. For example, the onset of phase G 2 in the automotive industry (it fell on the 30s) led to the fact that the production of homogeneous products and price competition was replaced by product differentiation based on consumer demands. Figure no. 2.2.3 also shows that in phases E and G 1 the firm will be most successful by focusing on their markets domestically. But as soon as growth begins to slow down, foreign markets, which are still in phases E and G, will become more attractive. 1 .

Therefore, the second challenge facing managers is to anticipate the changing phases of the demand cycle and revise the firm's strategy in the face of changing competitive conditions.

But back to fig. 2.2.2. At its top, two other life cycles are shown (denoted as T 1 and T 2 ), describing the dynamics of demand for goods (services), which are produced on the basis of a certain technology.

For example, in the 40s, the need for amplifiers of weak electrical signals was still at the beginning of phase G 1 and increased rapidly. By the way, this need, starting from 1910, was satisfied by vacuum tubes (we denote them as T 1 ) By the end of the 40s, lamps began to be replaced by transistors (technology T 2 ) Firms holding on to the old, lamp technology, began to lose their position in the market. Ironically, the transition to semiconductor technology has not been made by the leading firms. As a result, the demand for amplifiers of weak electrical signals has been intercepted by new firms such as Note That Tex Instruments, Fairchild and Transitron.

It is important to note that one of the reasons for this "change of scenery" is shown at the bottom of Fig. 2.2.2, where the line of the cycle of demand and technology is limited to several consecutive life cycles of goods produced on the basis of the technology that was originally developed to meet demand.

If the technology is capable of producing a series of products (see Ch. 2.4), the main condition for success will be the organization of R&D for the development of products (P 1 , P 2 , R 3 etc.) on the basis of further improvement and refinement of the 1st technology. As a result, technology turns into a leading force and the firm finds itself in a position of "technology-driven" (see Ch. 2.4): the entire course of its strategic development is predetermined by those developments that are offered by the R&D department.

Figure No. 2.2.3. Typical evolution of competition strategy

But as soon as the value of the originally proposed technology begins to decline (see Fig. 2.2.2), it turns out that the "leading force of technology" exclusively replicates products that have already lost their competitiveness in the market. Therefore, in the conditions of unstable technology, the company's management must recognize the earliest signs of technological obsolescence of products and ensure that the R&D function does not seek to replicate technically obsolete products.

Allocation of strategic economic zones

Experience has proven time and again that segmentation of the firm's environment in defining the strategic area of management is a difficult task for managers. The reasons for the difficulties are, firstly, that it is not easy for many people to change their point of view: they are used to seeing the external environment from the standpoint of the traditional set of products manufactured by their company, and they have to look at the environment as a sphere of birth of new needs that can attract any competitor.

The author of this book has found that it is useful from a practical standpoint to advise managers that they do not use the traditional names or characteristics of the products of the firm when identifying a strategic area of management.

A second source of difficulty is that SZH is described by many variables. Before adopting the concept, the firm assessed its environment by the growth rates of the industries in which it operates. SZH should be described using the following parameters:

Growth prospects, which should be expressed not only by the growth rate, but also by the characteristics of the demand life cycle.
Profitability prospects that do not align with the profit prospects (the huge growth of the 64K chip market gave an example of prosperity without profit)
Expected level of instability, at which perspectives lose their certainty and can change.
The main factors for successful competition in the future, which determine the success in the SZH.

In order to make sufficiently rational decisions about the allocation of resources to ensure competitiveness and maintain a development strategy, managers must go through a large number of combinations of factors (1 ... 4), which differ significantly from each other, in the process of market segmentation. In this case, it is extremely important to select a sufficiently narrow circle of the strategic economic zone, otherwise decisions on them will lose their completeness and feasibility.

In practice, in large firms, you can find from 30 to 50 SZH. Of course, the same number may appear in small firms if their diversification is wide.

The procedure for identifying a strategic economic zone is shown in Fig. 2.2.4. As you can see from the left side of the figure, this process begins by identifying the needs that need to be met, then moves on to the question of technology and to the analysis of customer types. Different categories of clients (end users, industrialists, people of popular professions, government agencies) are usually considered as different SZH. The next classification is according to the geography of needs. On the right side of the figure is a list of factors that can be completely different within two countries. Within the same country, regional differences are possible, which should be taken into account through further market segmentation.

With all this, if it turns out that the parameters and prospects are almost the same in two or more countries, they can be considered as a single SBA.

Strategic resource zones

Systematic strategic planning was born in an environment of abundant resources. The planners were concerned only with selecting the most attractive markets, technologies, geographic areas and product mixes for the firm. It should be said that in order to implement the strategy, they determined the needs for monetary, human and material resources, hoping that the heads of financial, personnel and procurement services would satisfy these needs without difficulty.

The events of recent years raise doubts that such conditions will continue in the future. First and foremost, the research of the Club of Rome gave the world a common understanding of how limited natural resources are. The oil crisis then demonstrated how skyrocketing resource prices can undermine and completely negate the product-market strategy of any firm. Finally, global stagflation has led to a shortage of monetary resources and has stalled the growth of many firms.

In the future, shortages and limited access to resources should be expected, both due to their physical shortage and for political reasons.

A new problem is whether to broaden the strategic perspective of the firm so that resources can be taken into account along with market perspectives. Resource constraints place increasingly stringent limits on what a firm can achieve in commodity markets... In many firms experiencing these constraints, planning is actually carried out using the cost-to-output method: first, it is determined what resources the firm can have, and then, based on these data, the firm determines its product-market strategy.

From the standpoint of the planning procedure, this two-way connection between resource and product-market strategies somewhat complicates the work, but it does not pose insurmountable barriers. Perhaps the most difficult thing is to accept the new procedure for managers. In the industrial era, the horizons of growth expanded infinitely and benchmarks were set only to the extent of the aggressiveness of managers, their propensity for business adventures. In a postindustrial world with limited resources, managers have to balance what they want to do with what they can do. The matter does not necessarily mean passive acceptance of resource constraints. There is as much room for creativity in developing entrepreneurial resource strategies as it is in developing product, market, and technology strategies.

When a firm is faced with problems in providing strategic resources, the allocation of strategic resource zones in the firm's resource needs is an important step in formulating the firm's resource strategy.

Groups influencing strategy formation

In addition to limited resources, the firm is increasingly experiencing the influence of legal frameworks, social pressure, interference in decision making and actions on the part of various groups, both inside and outside the firm, not involved in the management process.

As early as 20 years ago, it was believed that ϶ᴛᴏ is a secondary problem that is outside the main interests of corporate managers. Her solution seemed simple. The pressure on business was explained by the fact that the government and the general public “do not understand” what benefits the company brings to society and how important the non-intervention of society is if it brings these benefits. The solution consisted in educational work, in order to explain to the general public the spirit of cheerful entrepreneurship, as well as to seek parliamentary support for business positions. And these positions consisted in constant and firm resistance to any form of restriction of managerial boda. To paraphrase President Ford, the solution was for the government to "leave business alone."

But over the past 20 years, the number of restrictions in one form or another has increased. The average consumer ceased to exist as a modest and obscure customer - he was transformed, becoming a demanding, picky critic; governments, especially European ones, began to make policy decisions; the general public became increasingly disenchanted with the firm.

Based on all of the above, we come to the conclusion that relations with society cease to be a secondary problem and turn into one of the key ones. In addition to market and resource strategies, firms will increasingly have to deal with the development of strategies for relations with society. The first step in formulating such strategies is to sort out the disparate socio-political influences and sort them into separate, strictly defined groups of strategic influence. (The problem of firm strategy in relation to society is discussed in Chapter 2.5.)

Summing up the last three paragraphs, it should be said that the vitality and successful activity a firm in the 80s and 90s will be determined by how much it is able to abandon the usual "look inside", directed to traditional markets and types of products, in favor of a "look in external world»Future trends, dangers and new opportunities. The concepts of the strategic economic zone, strategic resources and strategic influence groups can be useful for such a reorientation, since they help to reduce complex phenomena to simple ones.

Boston Advisory Group Matrix

The matrix proposed by the Boston Advisory Group (BCG), shown in Fig. 2.2.5 is a convenient way to compare the various SZHs in which the firm operates.

Figure No. 2.2.5. Matrix proposed by the Boston Advisory Group

BCG suggested using a single indicator to determine the prospects (see Fig. 2.2.4) - the growth in the volume of demand. It is worth noting that it sets the vertical size of the matrix. Horizontal size is the ratio of the firm's market share to its leading competitor's market share. According to BCG, the ratio determines the comparative competitive position of the firm in the future.

For each strategic area of management, an assessment of future growth rates is made, market shares are calculated and the data obtained fit into the following cells (see Fig. 2.2.5)

For convenience, each SZH can be depicted as a circle, the diameter of which will be proportional to the expected demand. The shaded segment inside the circle denotes the market share that the firm is going to capture. Alongside, you can write down additional information: the expected share of this strategic area of management in the volume of sales and the amount of profits of the company. It is worth saying - you get a scatter diagram, which will allow you to get a fairly complete picture of the affairs of the company.

The BCG diagram offers the following set of decisions about the future activities of the firm in the given economic zones:

To protect and strengthen "stars";
if possible, get rid of "dogs" if there is no compelling reason to keep them;
for "cash cows" it is necessary to tightly control capital investments and transfer excess cash proceeds under the control of the top management of the company;
"Wild cats" are subject to special study in order to establish whether they will not be able to turn into "stars" with certain investments.

The dotted line shows that "wild cats" can become "stars", and "stars" in the future, with the advent of inevitable maturity, will turn into "dogs". The solid line shows the redistribution of funds from cash cows.

Based on the above, we come to the conclusion that the matrix helps to perform two functions: making decisions about the intended market positions and the distribution of strategic funds between SZH in the future. The practice of using the BCG matrix has shown that it is very useful in choosing between different economic zones, determining strategic positions, as well as for the distribution of strategic resources in the near future. But experience has also shown that the BCG matrix is only applicable under very specific conditions.

The future prospects of all SZH, developed by the firm, should be commensurate using the indicator of growth rates. This is true for those cases when it can be expected that this SZH will remain in the same phase of the life cycle in the foreseeable future, and the expected level of instability is low, in other words, the growth process will not be distorted due to some unforeseen processes. But in the case when a change in the phases of the life cycle and (or) significant destabilization of conditions is expected in the foreseeable future, measuring the prospects using only the growth rate alone gives results that are not only inaccurate, but also dangerous.
Within a given strategic economic zone, the development of competition should proceed in such a way that only one indicator - the relative market share - would be sufficient to determine the strength of the firm's position as a competitor. This is true for phase G 2 under the conditions that the technology is stable, the demand grows faster than the supply and the competition is not too fierce. But when these conditions are absent and (or) the given area of activity is in phases G 2 or M, successful competition should be conducted based not on market share, but mainly on other factors. A recent example is the loss of market dominance by General Motors as a result of the move to small car technology.

The conclusion drawn from the above remarks is that before referring to the BCG matrix, it is important to ensure that growth in business volume can be a reliable measure of prospects and that a firm's relative position in competition can be determined by its market share. If these conditions are met, then the Boston matrix is good for its simplicity and is convenient as a tool for analyzing the set of activities that a firm has.

If the prospects and conditions of competition are more complicated, then the two-dimensional matrix should be supplemented with more complex assessment tools. Note that the growth rate should be replaced by the concept of the attractiveness of the strategic area of management, and instead of the relative market share, you will have to use the concept of future competitive positions of the firm. We will show you how to make these new types of assessments in the next paragraph, and then use them in a more complex version of this matrix.

Assessment of the attractiveness of the strategic economic zone

In unstable conditions, when the duration of the phases of the life cycles of demand and technology becomes shorter than the time horizon of intra-firm planning, the prospects for the strategic zone of management should be measured according to several criteria.

To account for the potential life cycle impacts, two growth estimates are needed: one for the unreached portion of the current phase, and the other for the next phase.
Due to the possibility of changes in the development of competition, one should not make assumptions that the profitability inherent in a given strategic economic zone will remain unchanged or will be positively dependent on further growth. Therefore, we need two independent assessments of profitability: short-term and long-term.
In connection with possible changes in social, political, economic, technological conditions, when assessing the degree of attractiveness, the level of future instability should be taken into account. Material published on http: // site

Based on all of the above, we conclude that instead of one indicator of volume growth used in the Boston matrix, assessing the attractiveness of a strategic business area requires a complex combination of factors.

Industrial firms and management consulting firms have developed various techniques for assessing the attractiveness of a strategic business area. It is important to note that one of them is briefly described in this paragraph.

The principles of this approach are shown in Fig. 2.2.6.

Table 2.2.1. Assessment of changes in the projected growth of the strategic economic zone

An estimate of future attractiveness can be derived using the following formula.

The attractiveness of the strategic economic zone = αG + βР + γO - σТ, where α, β, γ, σ are coefficients that are given by managers to indicate the relative contribution of each factor and add up to 1. These coefficients indicate the comparative attractiveness of benchmarks for the firm (see . 2.3.7)

It is necessary to develop two independent evaluations: short-term and long-term. The first is needed for use in the BCG matrix instead of the volume growth indicator. The second is used for long-term management of a set of activities. Material published on http: // site

Assessing the attractiveness of a strategic business area, while being significantly more complex than a simple comparison of growth rates according to the Boston matrix, nevertheless, provides a much more realistic basis for comparing complex and intertwining factors that determine the relative attractiveness of a strategic business area for a firm.

Table 2.2.2 Assessment of changes in profitability of strategic economic zones

* In case the previous characteristics remain in the future.
It is worth noting that leave the mark in the middle of the scale (0)

Assessment of the level of strategic investments

Let us now turn to another size of the matrix, in order to move from the indicator of relative market share to a broader measure, which would give an idea of what the competitive status of the firm in the SZH would look like. It is worth noting that it will be the result of the interaction of three factors:

1) relative level of strategic investment firms in a particular economic zone, ensuring a competitive status based on the effect of the scale of output certain types products, as well as the effect of the scale of the firm as a whole;

2) competitive strategy. It allows you to distinguish between the positions of the firm and its competitors;

3) mobilization capabilities of the firm. It is worth noting that they consist in the fact that the strategy is provided with effective support at the levels of planning and implementation of plans, as well as support in the form of well-established operational work after the strategy is adopted.

How economic theory, and common sense suggests that the profitability of the SZH bathroom company will be proportional to the capital investments made in this area. It is pertinent to note that experience has shown that profitability describes a curve similar to that shown in Fig. 7, where the full amount of resources spent in a given SZH is deposited horizontally: not only investments in buildings, structures and equipment, but also the costs of product development, ensuring market positions, as well as support - management, production, market, sales and etc.

As shown in fig. 7, each SZH has a minimum level of capital investment - a critical volume point - at the border of profits and losses. No matter how brilliantly the firm's strategy is developed, no matter how high its mobilization capabilities are, strategic capital investments below the critical point of volume will not give a return.

The critical volume point is difficult to assess, and until recently it has not been the focus of managers. As a result, best-intentioned attempts to enter new SZHs have often failed, simply because the firm has traditionally belatedly discovered that it is unable to commit funds for capital expenditures above the tipping point.

Figure No. 2.2.7. The firm's competitive status and strategic investment

An example is the automotive industry, where most of the competing firms are smaller than in scale and will be extremely important in the next 5-10 years in order to successfully compete in the global market.

The curve shown in Fig. 7, shows that there is also a point of optimal volume - that level of investment, when exceeding which, the return begins to decrease both due to the slow response of a large organization and the force of bureaucratization of a large firm.

As a yardstick for determining the position of a firm in competition, we use the ratio between the expected profitability of a firm in SZH and the optimal level of possible profitability in the future.

Based on all of the above, we conclude that we can assess the future competitive status of the firm (CSF) to the extent that it is conditioned by strategic capital investments, using the following formula:

where I F- the level of strategic investment of the firm; I K- critical point of volume; I 0 - point of optimal volume. The right side of the equation will be called the level of strategic investment. By the way, this formula means that, provided that the strategy and mobilization capabilities of the company are optimized, its competitive status will be determined by the ratio of its investments in this SZH to the level that is needed for optimal profitability. Material published on http: // site
But very often the strategy and mobilization capabilities of the firm are not optimal. In this case, when determining the competitive status, an amendment should be made for factor a, which will be discussed below.

As already noted, the understanding of the importance of the level of strategic capital investment has developed relatively recently. Therefore, satisfactory methods for assessing the 1st level have not yet been developed. Their development should begin by determining which categories of costs are included in the capital investment. When assessing the level of strategic investments in the area of management, which the company is making at the present time, as well as the optimal mass of these investments, it is extremely important to take into account the following categories of costs.

Investment in power. This is the cost of buildings and equipment to provide the required capacity of production facilities, sales network, marketing, R&D.
Investment in strategy. This includes the costs of strategic planning, market research, development of new products, and the launch of new products into serial production.
Investments in the potential of the company, that is, hiring and training personnel, purchasing technology, the cost of creating functional services.

Consequently, the first step to assessing the future competitive status of a firm in the SZH will be to determine its relative investment positions in the future, namely: an assessment of the strategic capital investments that the firm is making and planning at the present time; assessment of the critical point of volume and the point of optimal volume in the future; determining the ratio of the firm's investments with optimal investments according to the formula above.

Determining the future effectiveness of the current strategy

The factor α mentioned in the previous paragraph is partly determined by the competitive strategy that the firm has chosen for a given SZH. Competitive strategy can be roughly described using the following characteristics: product differentiation (sometimes called "product niche"), which determines the characteristics of a given firm's products; market differentiation ("market niche"), which determines the characteristics of a firm's position in the market.

The main feature of both product and market differentiation will be that perception of the company and its products, which develops among consumers. Another sign is the methods by which the firm provides itself with advantages over competitors. These signs are listed in table. 2.2.3, in which four main parameters of differentiation are given: a general idea of the company, characteristics of products, market share and patent or trademark. Based on the above, we conclude that it is clear that differentiation through market will, shown in the Boston Matrix, will be exclusively one of its four ways by which a firm can secure a competitive advantage. Third sign competitive strategy- chosen by the firm ways to ensure growth Seven possible ways are shown in Fig. 2.2.8. The figure also shows numerous options for product and market differentiation.

Table 2.2.3. Methods for differentiating strategies. Strategy components

A model of a particular competitive strategy can be built using Fig. 2.2.8., Choosing more or less compatible components for each of the more particular substratages. The first of the possible models is indicated by a double line of communication: ϶ᴛᴏ the classical strategy of success, prescribed by the theory of the firm As you can see, it is aimed at seizing a dominant position in the market and offering undifferentiated products at the lowest price. As mentioned above, this strategy "works" in stable conditions, in the growth phase G 1 life cycle.

Another model, depicted by single lines, is ϶ᴛᴏ a strategy similar to that of Rolls-Royce) to segment the market, to dominate that segment, to offer additional finishes and after-sales service, to ensure reliability - in short, create a sustainable the idea of its product as an item of luxury, comfort, designed for the snobbery of buyers) It is interesting to note that Rolls-Royce does not act as pioneers in the development of technical innovations in the automotive industry, preferring to follow the leaders.

These two examples illustrate the important point that the effectiveness of the strategy as a whole can be ensured only if the particular substratages are mutually compatible and support each other. For example, a firm cannot rely on a dominant position in the market if it pursues a passive growth policy following the general expansion of the market Another example: it is difficult, almost impossible to simultaneously conduct market differentiation, minimizing prices, and product differentiation through the development of new products.

Table 2.2.4 Determination of the future effectiveness of the current strategy

The chances of the future success of the strategy that the firm is pursuing today can be estimated as follows.

It is worth saying - using the table. 2.2.1, 2.2.2 and 2.2.4, determine which factors will bring success in the next 5-7 years (underline them or circle them) It is worth saying that the complete list of competition factors obtained in this way will be called the success factors of the future strategy in SZH ... Enter them in the first column of the table. 2.2.4.
It is worth saying - using rice. 8, determine which factors best characterize the current strategy of the firm, and write them in the second column of table. 2.2.4.
There are usually several possible successful strategies, and in each there is a logical connection between the policy of growth, product and market differentiation. For example, in phase G 3 some firms achieve dominance in the market as a result of segmentation of demand and renewal of the product range, while others remain among many competitors, maintaining the growth rate in parallel with the dynamics of the market, and build a reputation for themselves as suppliers of high-end goods without developing new products.
It is worth saying - using the result obtained in stage 2, draw up models of two or more sequential strategies for success and enter them in Table. 2.2.4.
Compare the results of stages 1 and 3 and determine the success strategy model that has the most in common with the current strategy of the firm. We will call this the optimal strategy for the company in the future.
Compare each factor of the optimal model with the factors of particular sub-strategies in the current strategy of the firm, in order to determine how the current strategy is optimal. This can be done by assessing by points (on a scale from 0 to 1) the degree to which the factors of the current strategy match the factors of the optimal one.

Please enter scores in the last column of the table. 4, add up the scores and divide by the number of factors being evaluated. You will get an index with a value between 0 and 1. Let's call it the strategic standard.

We received a partial explanation of the meaning of the corrective factor a, which figured in the equation given in the previous paragraph: the future competitive status of a firm (CSF) in the SZH is determined not only by the relative level of capital investment, but also by the strategic standard.

The equation at the end of the previous section can be written differently:

CSF = ((I F-I K) / (I 0 -I K)) * S F/ S 0 * b,

where the second factor is the aforementioned strategic standard, and the meaning of the residual factor b will be explained in the next paragraph.

Summing up this section, we must take the next step in assessing the future competitive status of the firm: determine the strategic standard (S F/ S 0 )

Assessment of the future competitive status

To explain the residual factor b, let us turn to the third condition that determines competitive position: the firm's potential in implementing strategy. A detailed list of factors affecting the potential of the company is given in table. 2.2.5.

As we will see, the tasks of general and financial management, Marketing and R&D can be performed in a wide variety of ways. Considering the characteristics of the potential capabilities of a firm, we must proceed from the completely obvious position that the success of a strategy depends on the extent to which the firm itself has the necessary capabilities to implement the strategy.

So, for the success of the firm's strategy shown in Fig. 8, five conditions are essential, of which the management capabilities of the company are made up and which are listed in table. 2.2.5. These are the following conditions:

Just as in the analysis of the strategy, tab. 2.2.5 can be used first to find out the current potential of the firm, then to determine the optimal opportunities and, finally, to establish the standard of opportunities. Table 2 also serves this purpose. 2.2.6.

Firm's competitive status = Investment level X Strategic standard X Opportunity standard = (I F-I K) / (I 0 -I K) * S K/ S 0 * C F/ C 0

If each of the three indicators turns out to be equal to one, then the company will be able to ensure itself an exceptionally strong competitive status and will be one of the most effective in this SZH. If at least one of the indicators is equal to zero, the firm will not receive profit.

For readers without mathematical background, we point out that in the above formula, the scale from 0 to 1 is non-linear, since the formula is a product of numbers. To express the values of these numbers in the form of matrix elements, you can use two techniques.

I. Count the series of products of three numbers and label them with the elements that characterize the competitive status: "good", "average", "weak".

0, 8 * 0, 8 * 0, 8 = 0, 512 or higher - "good" status;

0.5 * 0.5 * 0.5 = 0.125 or higher - "medium" status;

0.25 * 0.25 * 0.25 = 0.016 or lower - "weak" status.

II. Alternatively, use a formula for the CFR that gives you a linear scale:

CSF = 1/3 ((I F-I K) / (I 0 -I K)) * S F/ S 0 )

In the ϶ᴛᴏth case, the weak position is from 0 to 0.4; medium - from 0.5 to 0.7; strong - from 0.7 to 1.0.

General Electric Matrix - McKinsey

The results obtained in the two previous paragraphs give us the opportunity to construct for the strategic economic zone such a variant of the matrix, which will be devoid of the most significant drawback noted in the BCG matrix, namely, the fact that the elements of its vertical and horizontal construction are too simplified. In the matrix shown in table. 2.2.7, instead of an indicator of growth in volume (see Boston matrix), the parameter of attractiveness of the strategic area of management was used, and instead of a relative market share, the future competitive status. The method of recording the data used in the BCG matrix is also suitable for the new matrix, which we named after the company "McKinsey", which carried out its development. As you can see from the new matrix, it is suitable for making decisions of the same type as the previous one.

Table 2.2.7 Matrix "General Electric" - "McKinsey"

Unlike the BCG matrix, the new matrix is applicable in all phases of the demand and technology cycles and under a wide variety of competitive conditions. (Cases of inapplicability of the ith matrix are considered in 2.2.14) But, as follows from the previous sections, it can be used only after a series of time-consuming operations. Therefore, the Boston matrix retains its value as a simplified analytical method for those C3X who continue to grow at a steady pace and in stable conditions and in which the strength of the competitive status of a firm is measured by its relative market share.

Initial versions of both matrices have been criticized for oversimplifying the complexity of the real structure of activity, in the form of a table, lined with four cells. This drawback was easily overcome by firms such as Shell and others, who used the 3X3 and even 4X4 format.

A matrix of this type is presented in the upper part of the table. 2.2.8. As follows from the table, with a more fractional division, it is not possible to preserve the nature of unconditional prescriptions, which is present in the three elements of the four-cell 2X2 matrix (“optimize”, “take full advantage”, “withdraw the invested funds”) It is important to note that at the same time a completely legal the question of what the guidelines are based on and how decisions should be made if the perspective is not so clear.

Table 2.2.8. Rules for making decisions about choosing a position. Typical situation

The assessment of the future competitive status is based on the assumption that there will be no changes in the current planned investment, as well as in the strategy and capabilities of the firm. If the future competitive status is extremely strong and the attractiveness of the strategic economic zone is great, then, as shown in table. 8, managers must decide whether to increase investment in a given SBA or try to maintain this advantageous position.

But the “star” rank by itself may not be sufficient to allocate new capital investments - either because investments are already at the optimal level and additional funds will not increase, but will reduce profitability (see Fig. 2.2.7), or because, that there are other SZHs more worthy of the firm's investment.

If the attractiveness of the strategic economic zone is low, but the position of the firm in the competition is extremely strong, the Boston Matrix recommends taking everything possible from the th zone. True, the “bad” market prospects, in principle, may turn out to be so bad in fact that even the leadership of a firm in the zone will give little more than the unprofitable positions of other firms, in other words, there will be nothing to “take”. For example, as experience shows, in phase of "mature growth" and in the presence of large excess capacity, it happens that no one, including even the strongest competitor, can earn anything in this SZH. Based on all of the above, we come to the conclusion that when a strong competitive status is combined with poor prospects, a firm may face a choice: “take” everything possible from the zone or leave it.

If the competitive status is weak, and the zone is attractive, that is, there is a “wild cat” situation, then it is quite clear here what should be done. The Matrix proposes to enter the “star” position. But it may happen that the company does not have the resources to carry out the optimal volume of strategic capital investments, or there are resources, but time has already been lost so that it could catch up with other competitors entrenched in the ϶ᴛᴏm market.

Finally, with a weak competitive status and unimportant prospects ("dog"), it is not necessary to leave this zone, since its synergistic links with other SZH may require that it be preserved even with low efficiency. Or it may happen that at the end of the “maturity” phase or in the “decline” phase, a firm that has invested small funds in this SZH and has never received high profits in it, it is better to wait until its leaders leave the ϶ᴛᴏ zone.

When they leave, this firm will be able to capture the market share of the former leaders and become profitable. It is pertinent to note that experience has shown that, taking advantage of this situation, some firms thrive as “heirs” in markets that have long been mature and even declining.

Statement of a strategic task

Based on all of the above, we come to the conclusion that a closer acquaintance with the matrices shows that the terms "star", "cash cow", "dog", etc. are eloquent but not accurate. Moreover, they do not provide sufficient information on how the new position can be achieved: what revisions should be made to the direction of investment, strategy and management potential of the firm. Therefore, more detailed analytical work is required to determine both the future competitive status of the firm and the ways to ensure it.

Analyzing the prospects and competitive status of a firm using the McKinsey matrix is considered to be too difficult and time-consuming work. At the same time, this work gives the firm not only a more realistic view of its own future, but also the data necessary to justify the preferred strategic position of the firm.

This is the procedure shown in Fig. 2.2.9. The results of the preliminary analysis are recorded at the top of the figure and for reasons that will be explained below, the optimal position is replaced by the concept preferred position.

If the optimal approach “passes” all the feasibility tests, the next step will be to solve the problem that economists call the “cost optimization problem”: is the investment in this SZH justified if the firm has other needs in the use of strategic resources? By the way, this problem is discussed in the next section.

Analysis of a set of strategic economic zones

A comprehensive, balanced analysis of the set of strategic economic zones of interest to the firm assumes that all zones are compared with each other. This is possible only if all SZH firms are evaluated in terms of the choice of strategic positions. Methods for such analysis have been developed in the specialized literature on investment.

Rank SZH by the size of the expected return on investment, provided that the firm chooses strategic objectives, backed by a resource of time.
Determine the total amount of strategic investment resources that the firm will have in the next 5-7 years. This will include funds received (except for the needs of operating and replacing funds) from retained earnings, through loans and the issuance of securities on the market.
Starting at the top level of return on investment, allocate investment resources across the SBAs to the optimal level (or adjusted for timing) until all funds are spent.

It is this kind of mechanical resource allocation procedure that leads to unfeasible options and unwanted distortions:

a) with it, some SZH will almost certainly be withdrawn from financing, namely those located at the end of the list, since in the near future the return on investment in them will be low or even negative. It is important to note that, however, with all this, it is likely that SZH data are still at the beginning of their life cycles and in the more distant future they will become important sources of profit. To correct this inaccuracy, the above procedure should be supplemented with lifecycle balancing, which will be discussed in the next chapter;

b) it can be concluded that some SZH should be preserved and used to the end. But firms very often see that capable and qualified managers are employed in such zones, and this resource is always scarce and can be used by the firm more productively. Sometimes it is even profitable to sell the “cash cow” to another company and transfer the most talented manager to another SZH.

To avoid such distortions, it is extremely important to complement the above procedure with the following steps:

If an important part of the general company expenses falls on the SZH group, which includes a "dog", then an in-house check of the synergistic effect is necessary in order to determine whether the effect of eliminating the unprofitable "dog" will not be accompanied by a decrease in the profitability of the remaining SZH;

It may turn out that additional capital investments in some SZHs are not as attractive as the potential for diversification that opens up during the period covered by capital budgets. To accommodate this possibility, the firm has two options:

Install minimum rate of return on investment, below which SZH financing is not allowed. Use the same factor to test potential diversification results.
Create strategic reserve To finance the potential for diversification in the future, an integrated approach to the allocation of strategic capital investments requires that all SBAs be analyzed in advance. But many firms are forced to make decisions on a number of SZHs early in the development of the plan, before the analysis of all zones is complete. In this case, the aforementioned minimum return on investment ratio will be a good tool. It is worth noting that it allows you to make a decision on one SZH without looking back at the others.

After the investment portfolio is already balanced, changes may occur in one of the SZHs, which in themselves do not justify the time-consuming work - revising the entire set. And here the coefficient of minimum return on investment will help to correctly relate to the problem that has arisen.

As follows from the above, the optimal approach to SZH can be chosen in two ways. It is important to note that one is to reevaluate the entire set, the other is to check acceptability. this approach to a certain zone according to the coefficient of minimum return on investment.

It should be said that a complete revision of the entire set is a very difficult and time-consuming procedure if it is performed manually. Referring to the dialogue model using a computer can significantly reduce labor and time costs. But regardless of the method of calculations, manually or by machine, a complete revision of the set every time a new SZH is opened or abrupt changes occur in any of the old ones, will destabilize the entire strategic work of the company. Therefore, a full portfolio review should be resorted to in the following cases:

as a periodic event (every 3-5 years);
when the need for revision is caused by a general change in the situation;
when in any of the SZH there are dangerous or, conversely, favorable trends affecting the entire investment portfolio as a whole.

Outside of these situations, for the analysis of individual strategic areas of management, you should use the minimum rate of return on investment. As can be seen from Fig. 9, in both cases, a decision must be made either to revise the optimal setting of tasks, or to plan, finance and perform the newly assigned task.

The scope of the "McKinsey" matrix

Analysis and selection of competitive status using a matrix of the type described above ("McKinsey") is performed under a wider range of conditions than the analysis based on the Boston matrix. But it also has limitations. Here are three of them, the most important.

The process of strategic choice described above is essentially a proactive process in the sense that the firm foresees the prospects and factors of success and pre-plans for itself positions that will enable it to take advantage of them.
But entrepreneurial firms are not limited to anticipating the future. It is worth noting that they also create its future themselves: new demand, new products, new technologies. Methods for analyzing such new strategic economic zones are given in 2.4.8.
The second limitation on the application of the above method is of a different nature. It is worth noting that it follows from the interpretation of uncertainty and unpredictability. The above method is based on the assumption that the future state of the strategic economic zone can be predicted with sufficient accuracy, so that it could be indicated by a dot in one of the quadrants (or a circle, showing the scale of the market)
In the mathematical sense, ϶ᴛᴏ goes to a double assumption: a) that the assessment of the most probable prospects for competitive status is in principle possible; b) the probability of such an assessment is so high that other assessments can simply be ignored when developing decisions that determine the future status.
These assumptions are not groundless, provided that the expected level of instability in the SZH is not too high (within 1-3 points of the scale used in this book. We remind you that the scale was given in Ch. 1.2). But as the level increases instability, both assumptions become invalid. Above 3 points, in addition to the most probable alternative, there are other alternatives that are quite realistic (the probability distribution curve no longer rises to a peak in the area of the most probable result)
Above 4 points on the scale, there are already quite a lot of such relatively realistic alternatives, and the given alternatives themselves no longer lend themselves to such a precise description, if the company could make a justified choice.
Based on the foregoing, we come to the conclusion that with a high level of instability, the method of determining the future competitive status based on a single probabilistic assessment for each SZH is not only unrealizable, but also dangerous.
To solve the problem of choosing positions with a high level of volatility, it is extremely important to revise the selection method itself. By the way, this problem is solved in Ch. 5.5.
The third limitation is valid not only for the choice of strategic positions, but also for any logical analysis, the results of which are vital for the destinies of managers. It is worth noting that it is related to the fact that in real life rationality of decision-making is provided by three components: cognitive, based on logic and facts, behavioral, based on the perception and intuition of managers, and careerist, associated with their claims, the struggle for power, the desire to assert their authority.

In work such as determining competitive status, where all three are important, results can only partly rely on facts, logic and reasoning. For example, managers responsible for "dogs", seeing that their power, authority and even their work as such are being questioned, are unlikely to be able to impartially assess the prospects and competitive status of their branches in the future. The managers responsible for the cash cows in the areola recently achieved success they are unlikely to easily agree to the fact that their case would be doomed to subsequent curtailment. Insisting on their rights in the allocation of strategic capital investments, they usually argue that their SBA will grow again not today tomorrow. Note that those who are responsible for the "wild cats" have not yet won recognition and authority and therefore most often have weak positions in the allocation of resources, even if the SZHs under their control may soon turn into saving "stars" ...

Based on all of the above, we come to the conclusion that the limitation of a logically justified choice of strategic positions essentially lies in the fact that it can easily turn from analytical to paralytic, since the rationale for decisions is distorted under pressure, and their implementation is hampered by that circumstance. that they call into question both the habitual way of actions of the managers and the correlation of forces that has developed between them.

This does not mean that, as proponents of organic evolution hastily conclude, one should abandon the rational justification of decisions in favor of actions carried out without any plan and system. At the same time, a systematic and strictly justified choice of the company's strategic positions will bear fruit only if both the behavior of the managers and the conditions of a business career for each of them organically fit into it. By the way, this problem is discussed in part 6.

conclusions

As long as all the markets in which the firm operates grow and remain stable, it is possible to determine further prospects by extrapolating past trends. But when a firm does not have a clear and stable growth perspective, it is faced with the need for a differentiated assessment of the external conditions of activity - trends, problems, opportunities - by highlighting what we have called strategic economic zones. Then it becomes necessary to select within the firm the divisions responsible for the development strategy of those in the strategic economic zone. It is worth noting that they are called strategic economic centers.

Due to the complexity, uncertainty, instability of resource provision, technological development and socio-economic conditions, it may be desirable to allocate external environment firms include strategic resource zones, strategic technology zones, and strategic influence groups.

The next stage of strategic analysis is to determine the prospects of the firm in each of the strategic areas of management. They are determined, firstly, by the opportunities that open up in a given SZH, which is measured by estimates of the prospects for demand and profitability in a given zone, as well as the levels of economic, technological and socio-political instability. Material published on http: // site

Another factor that determines the prospects of a firm will be the competitive status that it chooses for itself in a given SZH. Here, the indicators are the ratio between the firm's investment and the optimal amount of capital investment for a given SZH, as well as the ratio between the firm's strategy and the optimal strategy, the managerial capabilities of the firm and what the strongest competitors in this SZH should have.

Having determined for itself further prospects, the firm can either accept them, or leave this SZH, or change the ϲʙᴏth choice of competitive status.

The choice is made in several stages. First of all, the optimal strategic positions (strategy, management capabilities, strategic investments) are determined, from which the company “starts”, achieving the position of the leading competitor in the given SZH.

Secondly, the margin of time is determined for the opportunity to make a temporal turn. In the third, a calculation is made of how much the optimal choice can improve the return on investment of the firm. If no improvements are foreseen, alternative solutions are considered: lowering the requirements for the optimum and reducing capital investments (“squeeze everything out”) or leaving the SZH.

Strategic economic zone, in which optimal choice improved return on investment, should be compared with other SZH. There are two ways to compare the analysis of the full set, or the application of the minimum rate of return, from which additional financing for development starts. If the overall ratio, composition and set of the strategic area of management are in question, the second method should be resorted to with caution.

The method of strategic choice, described in this chapter, has several limitations, it is not suitable for the creation of new SZH, leads to a distorted understanding of external conditions at high instability, does not take into account how the habitual way of actions of managers and the conditions for the development of their business career affect decision-making. These limitations will be discussed in subsequent parts of the book.

In recent years, in many large organizations, the functions of strategic planning have been transferred to departments, that is, there is a decentralization of internal planning. This process is carried out as follows.

The entire range of activities of the organization is divided into main segments - "strategic segmentation" occurs (the term was proposed by a well-known firm specializing in the analysis and developing strategies, - "Boston Consulting Group" - BCG).

There is a reallocation of strategic powers in favor of segment managers.

The top administration remains responsible for the general direction of the organization's development: the location and structure of investments, the total volume of production and profits. In addition, the central management determines resource (mainly financial) restrictions on the activities of lower levels.

Decentralization of the planning service is carried out - the number of the central department is reduced, planning departments in places.

A strategic economic center (SCC) is being formed at the level of a separate subdivision. He is engaged in the development and implementation of his own strategic plans. Examples of companies that have created the SCC are the well-known American company General Electric, the British company Imperial Chemical Industries and some others.

Advantages of SCH:

SCC allows you to take into account the most accurate economic conditions at the level of individual large divisions, creates opportunities for more flexible adaptation of the division to consumers, to the external environment as a whole;

within the framework of the SCC, the time for passing basic information is reduced, decision-making is accelerated;

the existence of the SCC makes possible a wider participation of workers in the planning of their activities.

Disadvantages of SCH:

the information overload of the top management of the company increases sharply, since information is now generated simultaneously in several places;

there is a threat that the very strategy and tactics of the organization's actions will be buried under the avalanches of planned activities in the agricultural center and the central services of the company (an overabundance of planning);

there is a danger of blurring the general corporate goals and replacing them with a multitude of uncoordinated goals of the divisions.

If for large firms a pronounced tendency is the decentralization of planning activities, then small organizations, on the contrary, strive for greater centralization of planning, the creation and expansion of a central planning service.

Functions and structure of the planning team

What are the main activities of planners in an economic organization?

The planning service takes part in the development of the firm's strategy, clarification of its main goals. However, planners perform this function, acting as advisers, consultants. Often, the planner and the top manager discuss key issues of strategy in personal conversation and discussion. The final decisions related to strategy approval are made by senior management.

Planners, along with other specialists, analyze and assess the external and internal environment of the company. They often own the most valuable information about the company.

Together with managers, planners participate in making forecasts about the possible future of the company, and prepare the forecast part of the final plan.

Planners provide advice and advice on planning techniques and promote professional planning methods.

The Planning Service assists senior management in organizing and delivering the training needed to ensure that all those involved in planning are ready to innovate effectively in the process. Planners should strive to create a spirit of creativity among workers in planning their future, to teach people to interact with each other.

It is helpful for the organization to have a planning consultant.

Consultant planning in the course of this work helps with advice on the organization and content of planning. To give an objective assessment of planning, it must be neutral in relation to the goals of the organization and the results of its activities. A consultant can be both an internal member of the organization (employee, manager) and an external one. In any case, he must have a clear and deep knowledge of the theory and practice of intra-firm planning, to inspire respect and trust in order to be able to perform the function of an arbitrator in disputed cases. The internal consultant is distinguished by knowledge of various aspects of the life of the firm. The external consultant has a rich and varied planning experience, but the disadvantage of working with him is his limited time. The duties of a consultant include:

assistance in preparing planning decisions;

training and consulting senior management on planning issues;

advice in organizing planning meetings, help in summing up the results of meetings;

Composition and size of planning services in the organization depend on the type of organizational structure (centralized or decentralized), on the ideas about the management style. One of the most important factors in the design of a planning service is the size of the organization.

Many small firms do not need a full-time planner. Therefore, they often refuse his services altogether. This is unreasonable. It is more useful to attract an employee to part-time or invite a full-time planner, but for certain period time associated with making plans. The invitation justifies itself external consultant on planning issues.

It is common for mid-sized organizations to have one full-time full-time planner as a planner.

In large firms, the size of planning services ranges from one or two people, and sometimes to over-hyped planning units of 100 people. Large planning services include both professional planners and technical staff. To organize the work of large planning services, an administrator position is required who coordinates the planning process: establishes the procedure and monitors the preparation of planning documentation, organizes professional meetings, prepares and distributes the final documents of these meetings, etc.

Recently, in connection with the creation of strategic economic centers in large divisions of organizations and the general tendency towards decentralization of intra-firm planning, the reduction of the overly expanded central planning services to 20-25 people has become characteristic.

Organizational planning structures

The planning process involves:

First, the top management of the organization;

Second, the planning team;

Third, the heads and specialists of the departments.

The ideal, as already indicated, is such a situation when all employees of the organization are involved in the discussion and drawing up of plans.

How are responsibilities distributed among the participants in planned activities?

Top management is the architect of the planning process, defines its main phases and planning sequence.

Top management must make the planning process accessible and understandable for every employee of the organization, he must be able to involve his employees in it as much as possible.

Another function of senior management is to formulate the firm's strategy and make strategic planning decisions. The company's management determines the general goals of its development and the main ways to achieve them. Strategy development requires top management analytical skills and large-scale thinking.

Middle and lower management, as well as specialists divisions are engaged in the development of operational plans. The duties of specialists also include the analysis of the internal and external environment of the organization, making forecasts. Business leaders and staff members come together to evaluate alternative strategies proposed for the organization.

The functions of the planning team will be discussed separately in one of the following paragraphs.

In recent years, in many large organizations, the functions

strategic planning transferred to units, that is, there is decentralization intercompany planning.

This process is carried out as follows.

1. The entire range of activities of the organization is divided into main segments - there is a "strategic segmentation" (the term was proposed by a well-known firm specializing in the analysis and development of strategies - "Boston Consulting Group" - BCG).

2. There is a redistribution of strategic powers in favor of segment leaders.

Decentralization of the planning service is carried out - the number of the central department is reduced, planning departments are being created in the field.

3. A strategic economic center (SCC) is being formed at the level of a separate subdivision. He is engaged in the development and implementation of his own strategic plans. Examples of companies that have created the SCC are the well-known American company General Electric, the British company Imperial Chemical Industries and some others.

Advantages of SCC:

=> SCC allows the most accurate consideration of economic conditions at the level of individual large divisions, creates opportunities for more flexible adaptation of divisions to consumers, to the external environment as a whole;

=> within the framework of the SCC, the time for passing basic information is reduced, decision-making is accelerated;

=> the existence of the SCC makes possible a wider participation of workers in the planning of their activities.

Disadvantages of SCC:

=> information overload of the top management of the company increases sharply, since information is now generated simultaneously in several places; => there is a threat that the very strategy and tactics of the organization's actions will be buried under the avalanches of planned activities in the agricultural center and the central services of the company (oversupply of planning);

=> there is a danger of eroding corporate goals and replacing them with a multitude of uncoordinated goals of departments.