In the early stages, strategy development began with determining “in which industry the company operates.” What was meant was the generally accepted idea of ​​the boundaries that isolated the firm and marked the outer limits to the growth and diversification to which it could aspire. For example, T. Levitt, who in the 60s condemned railway and oil companies for failing to determine the content of their business activities, suggested that they declare their industry affiliation - the first to transport, the second to energy.

In the eyes of early strategy makers, defining “the industry in which we operate” and identifying the firm's strengths and weaknesses was tantamount to drawing the boundaries of attention to traditional business areas.

By the beginning of the 60s, most medium-sized firms and all large ones, without exception, had turned into complexes that united the production of diverse products and entered numerous product markets with them. And if in the first half of the century most of these markets grew quickly and retained their attractiveness, then by the beginning of the 60s the prospects for their evolution turned out to be very different - from boom to decline. This discrepancy arose due to differences in the degree of demand saturation, local economic, political and social conditions, competition, and the pace of technology update.

It became increasingly clear that moving into new industries would in no way help the company solve all its strategic problems or take advantage of all opportunities, since new problems arose precisely in the area of ​​its traditional activities.
Therefore, when analyzing strategies, the focus increasingly turned to the prospects of the set of industries in which the company was already involved. Consequently, the first step of the analysis was no longer “defining the industry in which the company operates,” but developing ideas about the totality of those numerous types of activities in which it is engaged.

This required managers to radically change their perspective. By the middle of the century, we had to learn to see the company’s prospects as if “from the inside,” perceiving its future through the eyes of various organizational divisions and from the position of traditional groups of goods produced by the company. Prospects were usually determined by extrapolating the performance of the firm's divisions. However, by the early 70s, each division usually served a whole group of markets with very different prospects, and, at the same time, several divisions could work in the same area of ​​​​demand. Extrapolation of previous performance results lost its reliability and, most importantly, did not allow us to assess possible changes in environmental conditions in all their diversity. Therefore, I had to learn to “look from the outside,” to study the company’s environment from the position of individual trends, dangers, and opportunities that arise from the state of that environment.

The unit of such analysis will be the strategic management zone (SZH) - a separate segment of the environment to which the company has (or wants to gain) access. The first step in strategy analysis is to identify the core areas and explore them without regard to the structure of the company or its current products. The result of such an analysis will be an assessment of the perspective that opens to anyone in this area. A sufficiently experienced competitor in terms of growth, profit margins, stability and technology at the next stage needs this information in order to decide exactly how the firm is going to compete with other firms in the current field.

Assessing the prospect from the perspective of the external environment was first undertaken in the US Department of Defense by R. McNamara and J. Hitch, who developed the principle of separate combat missions - the military equivalent of the concept of strategic management zones.

In the business world, the instigator was the American company General Electric, which, in addition to this concept, proposed the idea of ​​a strategic economic center (SCC), an in-house organizational unit responsible for developing the company’s strategic positions in one or more business areas.

The relationship between the concepts of strategic economic zone and strategic economic center is shown in Fig. 2.2.1. The upper part of the figure shows that the agricultural sector is characterized by both a certain type of demand (needs) and a certain technology. For example, until 1950, the need to amplify weak electrical signals was met through vacuum tube technology. Invented in 1948, the transistor became the basis of competition in semiconductor technology.

The need for amplification of weak signals, together with semiconductor technology, constitutes one SZH, the prospects for which began to fade after 1950. The same need plus transistor technology - another area extremely promising at the time.

As this example shows, as soon as one technology is replaced by another, the problem of their relationship becomes a matter of the most important strategic choice for the company: to maintain (and for how long) traditional technology or to switch to a new one, due to which a certain part of the products produced by the company turns out to be outdated. There are many examples of how firms that do not take advantage of the development of a strategic business area retain their previous products even after they are already outdated.

Figure No. 2.2.1. Strategic economic zones and strategic economic centers

As the bottom part of Fig. 2.2.1, after choosing a strategic business area, the company must develop a specific product range. Responsibility for choosing areas of activity, developing competitive products and marketing strategies lies with SCC. Once the product range is developed, the responsibility for realizing profits falls on the day-to-day business units. The material was published on http://site

When a company first turns to this concept, it must decide for itself an important question about the nature of the relationship between divisions - strategic and commercial. For example, McNamara, as he began developing the concept, discovered that the major tactical forces—Army, Navy, Air Force, and Marines—were interfering with and often conflicting in their separate combat missions of strategic deterrence, air defense of the United States, limited military operations, and etc. McNamara's solution was to create new divisions that deal with strategic planning of separate tasks. The strategic decisions they develop are transferred “across the road” - to the relevant departments for implementation. Based on all of the above, we come to the conclusion that according to McNamara’s plan, strategic divisions were responsible only for the development of the planned strategy, and departments were responsible for its implementation. This division caused inconsistency and loss of coordination, in particular due to the fact that certain departments often performed the duties of strategic units. For example, both the navy and military aviation were simultaneously responsible for the development of individual functions of strategic deterrence.

To avoid this double strategic liability, General Electric found another solution. She did a hard job - she distributed the departments of current commercial activities (groups of factories, design bureaus, sales offices, etc. - Scientific editor's note) between the SCCs so that the latter were responsible not only for planning and implementing the strategy, but also for the end result - making a profit.

This approach made it possible to get rid of the transfer of strategy “over the road” and made SCC responsible for both profits and losses. It is important to note that, however, with all this, as General Electric and other companies have discovered, the existing organizational structure does not fully support the newly created SCC, due to which it is not possible to divide responsibilities clearly and unambiguously.

The third solution option is to reorganize the company on the basis of the SCC so that each of them would have one division of current commercial activity. The material was published on http://site
This option, at first glance so simple, has its own difficulties, since the main criterion for the formation of an SCC within an organization - the effectiveness of development in this strategic direction - will be only one of the determining parameters of the organizational structure as a whole. There are others: effective use of technology and high levels of profitability. The material was published on http://site
Reorganization based on the SCC, while maximizing the effectiveness of strategic behavior, can at the same time reduce the profitability of the company or simply turn out to be an impossible task due to some reasons related to technology (in Chapter 4.3 we will look at the problem of coordinating strategic developments with current activities in within the organizational structure)

From the above it is clear that the problem of distributing responsibility between the company's storage centers is by no means simple and its solution may be different each time. It is important to note that, however, with all this, it is already quite well known from experience that the concept of SZH and SHC is a necessary tool that provides the company with a clear idea of ​​what its environment may become in the future, which is extremely important for making effective strategic decisions.

Demand and technology life cycles

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

Therefore, firms compared industries based on their growth rates and predicted the future by extrapolating existing trends.

As already mentioned in Chap. 1.1, starting from the 30s, the nature of growth began to change. It is important to note that some industries continued to prosper, while in others growth rates decreased and some firms experienced a decline in sales in a number of their agricultural sectors.

At the time when these phenomena first appeared, deviations from the general growth trend were perceived as anomalies, and there was no clear understanding of their causes. But the anomalies became more and more numerous, and by the mid-70s a new understanding of economic growth began to emerge.

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

Figure No. 2.2.2. Life cycles of demand, technology and product

The top curve in the figure, the demand life cycle, shows how demand typically develops from the day when a previously unsatisfied social need (for example, the need for personal transportation, home television reception, amplification of weak electrical signals) began to be satisfied with goods or services.

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

1. Origin(E) - a turbulent period of industry formation, when several firms, seeking to seize leadership, compete with each other
2. Accelerating growth(G 1 ) - the period when competitors remaining in the market reap the benefits of its victory. During this period, demand usually grows, outstripping supply
3. Growth slowdown(G 2 ), when the first signs of demand saturation appear and supply begins to outstrip demand.
4. Maturity(M) when demand saturation has been reached and there is significant excess capacity
5. 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 consumption of the product.

From a demand life cycle perspective, slowdown 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 when exactly this will happen, in other words, what will be the duration of the life cycle of demand from its inception to the beginning of saturation.

The material presented in 1.2.1 gives reason to assume that the life cycle of industries is decreasing, primarily as a result of progressive innovations in management and increasing the efficiency of firms, accelerating the development of new products, and better organization of marketing and sales.

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

In the first half of the century, the manager could count on 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 emerge, grow, reach maturity, and decline. Because If a firm wants to support its expansion, its management must constantly be concerned with adding new activities to the mix of activities and eliminating those that are no longer consistent with the firm's growth guidelines.. This is the first of the major tasks, and, as we will see later, it will be key from the perspective of managing a strategic set of industries.

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

This is shown in Fig. 2.2.3, from which one can see how the main success factors in the agricultural sector change as demand moves into a new phase. For example, the onset of phase G 2 in the automotive industry (it occurred in the 30s) led to the fact that the production of homogeneous products and price competition was replaced by product differentiation based on consumer needs. Figure No. 2.2.3 also shows that in phases E and G 1 A firm will achieve its greatest success by focusing its attention on its domestic markets. But as soon as growth begins to slow down, foreign markets, still in phases E and G, will become more attractive 1 .

Therefore, the second task facing managers is to anticipate changing phases of the demand cycle and revise the company's strategy in line with changing competitive conditions.

But let's return to Fig. 2.2.2. Its upper part shows two other life cycles (labeled T 1 and T 2 ), describing the dynamics of demand for goods (services) that 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 grew 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 (T technology 2 ) Firms that clung to the old lamp technology began to lose their position in the market. Oddly enough, the transition to semiconductor technology was not made by leading firms. As a result, the demand for weak electrical signal amplifiers was captured by new firms such as Texas Instruments, Fairchild, and Transitron.

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

If the technology is capable of producing a series of products (see Chapter 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 this technology. As a result, technology turns into a leading force and the company finds itself in the position of “driven by technology” (see Chapter 2.4): the entire course of its strategic development is predetermined by the developments that the R&D department offers.

Figure No. 2.2.3. Typical evolution of competitive strategy

But as soon as the value of the initially 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 conditions of unstable technology, company management must recognize the earliest signs of technological obsolescence of products and ensure that the R&D function does not lead to the replication of technically obsolete products.

Identification of strategic management zones

Experience has repeatedly proven that segmenting a company's environment when determining a strategic business area is a difficult task for managers. The reasons for the difficulties are, firstly, that many people find it difficult to change their point of view: they are accustomed to seeing the external environment from the standpoint of the traditional set of products produced by their company, and they have to look at the environment as the sphere of the birth of new needs that can attract any competitor.

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

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

1. Growth prospects, which should be expressed not only by growth rates, but also by the characteristics of the demand life cycle.
2. Profitability prospects, which do not coincide with profit prospects (the enormous growth of the market for chips with a memory capacity of 64 kilobits provided an example of prosperity without profit)
3. Expected level of instability, in which prospects lose certainty and may change.
4. The main factors for successful competition in the futureᴏᴛᴏᴩwhich determine success in SZH.

In order to make sufficiently rational decisions regarding 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) that differ significantly from each other in the process of market segmentation. In this case, it is extremely important to select a fairly narrow circle of the strategic management zone, otherwise decisions on them will lose completeness and feasibility.

In practice, in large firms you can find from 30 to 50 SZH. Of course, the same number may end up in smaller firms if their diversification is broad.

The procedure for identifying a strategic management zone is shown in Fig. 2.2.4. As you can see from the left side of the figure, this process begins with identifying the needs that need to be satisfied, then moves on to the issue of technology and to analyzing the types of customers. Different categories of clients (end consumers, industrialists, people in the private professions, government agencies) are usually considered as different SZH. The next classification is based on 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 one 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. Planners focused only on selecting the most attractive markets, technologies, geographic areas, and product mixes for the firm. It is worth saying that to implement the strategy, they determined the needs for financial, human and material resources, expecting that the heads of financial, personnel and supply services would satisfy these needs without difficulty.

Events in recent years cast doubt on whether such conditions will continue in the future. First of all, the research of the Club of Rome gave the world a general understanding of how limited natural resources are. Then the oil crisis demonstrated how skyrocketing resource prices can undermine and completely overwhelm any firm's product-market strategy. Finally, global stagflation has led to a shortage of monetary resources and has slowed the growth of many firms.

In the future, we should expect shortages and limited access to resources, both due to physical scarcity and political reasons.

The new challenge is to broaden the firm's strategic perspective so that resources can also be taken into account along with market perspectives. Resource constraints place ever tighter limits on what a firm can achieve in product markets. In many firms experiencing these restrictions, planning is actually carried out using the input-to-output method: first, it is established what resources the firm can have, and then, based on these data, the firm determines its product-market strategy.

From the perspective 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 for managers to accept is a new procedure. In the industrial era, growth horizons expanded indefinitely and benchmarks were set only to the extent of the aggressiveness of managers and their propensity for business adventures. In the world of a post-industrial economy, with limited resources, managers have to balance what they would like to do with what they can do. This does not necessarily lead to passive acceptance of resource limitations. There is as much room for creativity in developing entrepreneurial resource strategies as there is in developing product, market, and technology strategies.

When a firm faces problems in securing strategic resources, identifying strategic resource zones within the firm's resource needs is an important step in formulating the firm's resource strategy.

Groups influencing strategy formation

In addition to resource constraints, the firm is increasingly experiencing the influence of legislative frameworks, social pressure, interference in decision-making and actions from various groups both inside and outside the firm that are not involved in the management process.

Even 20 years ago it was believed that this was a secondary problem, 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 a company brings to society and how important it is for society to not interfere in order for it to bring these benefits. The solution was educational work, to explain to the general public the spirit of free entrepreneurship, and also to achieve parliamentary support for business positions. And these positions consisted of constant and firm resistance to any form of restriction of managerial freedom. 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 ordinary consumer ceased to exist as a modest and unknown buyer - he was transformed, becoming a demanding, picky critic; governments, especially European ones, began to make policy decisions; the general public became increasingly disillusioned with the company.

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 develop strategies for relations with society. The first step in formulating such strategies is to understand the heterogeneous socio-political influences and sort them into separate, strictly defined groups of strategic influence. (The problem of a company's strategy in relation to society is discussed in Chapter 2.5.)

To summarize the last three paragraphs, the viability and success of a company in the 80s and 90s will be determined by the extent to which it is able to abandon the usual “look inward”, facing traditional markets and types of products, in favor of “ a look into the outside world” of future trends, dangers and new opportunities. The concepts of the strategic zone of management, strategic resources and strategic influence groups can be useful for such reorientation, as 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 method of comparing the various SZHs in which the company operates.

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

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

For each strategic business area, an assessment of future growth rates is made, market shares are calculated and the data obtained is entered into the corresponding 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 size of demand. The shaded segment inside the circle denotes the market share that the company is going to capture. Nearby you can write down additional information: the expected share of this strategic business area in the volume of sales and the amount of profits of the company. It is worth saying that you will get a scatter diagram, which will allow you to get a fairly complete picture of the company’s affairs.

The BCG diagram offers the following set of decisions about the further activities of the company in the current economic zones:

• “stars” to protect and strengthen;
• if possible, get rid of “dogs” if there are no compelling reasons to keep them;
• “cash cows” require strict control of capital investments and the transfer of excess cash proceeds under the control of the company’s top management;
• “wild cats” are subject to special study in order to establish whether, with certain investments, they cannot turn into “stars”.

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

1. The future prospects of all SZH developed by the company should be comparable using the growth rate indicator. This is true for those cases when it can be expected that a given agricultural sector 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 where a change in the phases of the life cycle and (or) significant destabilization of conditions is expected in the foreseeable future, measuring prospects using only the growth indicator gives results that are not only inaccurate, but also dangerous.
2. Within a given strategic economic zone, the development of competition should proceed in such a way that to determine the strength of the firm’s position as a competitor, one indicator is sufficient - the relative market share. This is true for phase G 2 provided that the technology is stable, demand grows faster than supply and competition is not too intense. But when these conditions are absent and (or) this area of ​​activity is in phases G 2 or M, successful competition should be based not on market share, but primarily on other factors. An example from recent practice is the loss of General Motors' dominant position in the market as a result of the transition to small car technology.

The conclusion to be drawn from the above observations is that before resorting to the BCG matrix, it is important to ensure that business growth can be a reliable measure of prospects and that a firm's relative competitive position 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 the company has.

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

Assessing the attractiveness of a strategic management zone

In unstable conditions, when the duration of the demand and technology life cycle phases becomes shorter than the time horizon of intra-company planning, the prospects for a strategic business area should be measured according to several criteria.

1. To account for possible life cycle impacts, two growth estimates are needed: one for the unexpired portion of the current phase, and one for the next phase.
2. Because of the possibility of changes in competitive developments, it should not be assumed that the profitability inherent in a given strategic business area will remain unchanged or be positively related to further growth. Therefore, two independent assessments of profitability are needed: short-term and long-term.
3. In connection with possible changes in social, political, economic, and technological conditions, when assessing the degree of attractiveness, the level of future instability should be taken into account. The material was published on http://site

Based on all of the above, we come to the conclusion that instead of a single indicator of volume growth used in the Boston matrix, assessing the attractiveness of a strategic management area requires a complex combination of factors.

Industrial firms and management consulting firms have developed various techniques for assessing the attractiveness of a strategic management 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. Assessing changes in the projected growth of the strategic management area

The assessment of future attractiveness can be derived using the following formula.

Attractiveness of the strategic business area = αG + βР + γO - σТ, where α, β, γ, σ are the coefficients given by managers to indicate the relative contribution of each factor and add up to 1. These coefficients indicate the comparative attractiveness of the guidelines for the company (see 2.3.7)

Two independent assessments need to be developed: 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. The material was published on http://site

Assessing the attractiveness of a strategic business area, being significantly more complex than simply measuring growth rates using the Boston matrix, nevertheless provides a much more realistic basis for comparing the complex and intertwined factors that determine the relative attractiveness of a strategic business area for a company.

Table 2.2.2 Assessment of changes in the profitability of strategic management zones

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

Assessing the level of strategic investments

Let us now turn to another dimension of the matrix in order to move from an indicator of relative market share to a broader measure that would give an idea of ​​​​what the competitive status of a company in the agricultural sector will 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 one or another economic zone, ensuring a competitive status based on the effect of scale in the production of certain types of products, as well as the effect of scale in the activity of the company as a whole;

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

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

Both economic theory and common sense suggest that the profitability of a bathroom SZH firm will be proportional to the capital investments made in this area. It is appropriate to note that experience shows that profitability describes a curve similar to the one shown in Fig. 2.2.7, where the full amount of resources spent in a given agricultural sector is laid out horizontally: not only investments in buildings, structures and equipment, but also costs for product development, ensuring market positions, as well as support - managerial, production, market, sales and etc.

As shown in Fig. 2.2.7, in each agricultural sector there is a minimum level of capital investment - a critical point of volume - on the profit-loss border. No matter how brilliantly the company's strategy is developed, no matter how high its mobilization capabilities are, strategic investments below the critical point of volume will not yield a return.

The volume critical point is difficult to assess, and until recently it was not the focus of management attention. As a result, well-intentioned attempts to enter new SZHs often failed, simply because the firm traditionally discovered belatedly that it was unable to allocate funds for capital expenditures above a critical volume point.

Figure No. 2.2.7. Firm's competitive status and strategic investments

An example is the automotive industry, where the majority of competing firms are smaller in scale than ϶ᴛᴏ will be extremely important in the next 5-10 years in order to successfully withstand competition in the global market.

The curve shown in Fig. 2.2.7 shows that there is also a point of optimal volume - that level of capital investment, above which the return begins to decrease both due to the slow reaction of a large organization and the force of bureaucratization of a large company.

As a measure for determining a company's position in competition, we use the ratio between the expected profitability of the company's operation in the agricultural sector and the optimal level of possible profitability in the future.

Based on all of the above, we come to the conclusion that we can assess the future competitive status of the company (FCS) to the extent that it is determined by strategic investments, using the following formula:

where I F-the level of strategic investment of the company; I K- critical point of volume; I 0 - point of optimal volume. We will call the right side of the equation the level of strategic investment. By the way, this formula means that, provided that the company’s strategy and mobilization capabilities are optimal, its competitive status will be determined by the ratio of its investments in a given agricultural sector to the level required for optimal profitability. The material was published on http://site
But very often the company’s strategy and mobilization capabilities are not optimal. In this case, when determining competitive status, an adjustment should be made for factor a, which will be discussed below.

As already noted, understanding of the importance of strategic investment levels is relatively recent. Therefore, satisfactory methods for assessing this level have not yet been developed. Their development should begin with determining which categories of costs are included in capital investments. When assessing the level of strategic investments in the business area that the company is currently making, as well as the optimal mass of these investments, it is extremely important to take into account the following categories of costs.

1. Investments in capacity. This is the cost of buildings and equipment to provide the required capacity of production facilities, sales network, marketing, and R&D.
2. Investments in strategy. This includes costs for strategic planning, market research, new product development, and launching new products into mass production.
3. Investments in the potential of the company, i.e. hiring and training of personnel, acquisition of technology, costs of creating functional services.

Consequently, the first step to assessing the future competitive status of a company in the agricultural sector will be to determine its relative investment positions in the future, namely: assessing the strategic investments that the company 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 company's capital investments with optimal investments according to the formula given above.

Determining the future effectiveness of the current strategy

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

The main sign of both product and market differentiation will be the image that consumers have of the company and its products. Another sign is those techniques by which the company provides itself with advantages over its competitors. These signs are listed in table. 2.2.3, which lists the four main parameters of differentiation: a general idea of ​​the company, product characteristics, market share and patent or trademark. Based on all of the above, we come to the conclusion that it is obvious that differentiation through the will of the market, shown in the Boston Matrix, will be exclusively one of its four ways in which a firm can secure competitive advantages. The third sign of a competitive strategy is the methods chosen by the company to ensure growth. Seven possible methods are shown in Fig. 2.2.8. The figure also presents numerous options for product and market differentiation.

Table 2.2.3. Ways to differentiate strategies. Components of strategy

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 specific substrategies. The first of the possible models is indicated by a double line of communication: the classical strategy for success, prescribed by the theory of the firm. As can be seen, it is aimed at capturing 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 of communication, is a strategy similar to that followed by Rolls-Royce) to segment the market, dominate the segment, offer additional finishing and after-sales service, ensure reliability - in short, create a sustainable the idea of ​​this product as an item of luxury, comfort, designed for the snobbery of buyers) It is interesting to note that the Rolls-Royce company is not a pioneer 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 only be ensured if the individual substrategies are mutually compatible and support each other. For example, a company cannot count 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 maintain market differentiation by minimizing prices and product differentiation by developing new products.

Table 2.2.4 Determining the future effectiveness of the current strategy

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

1. 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 we will call the complete list of competitive factors obtained in this way the success factors of the future strategy in the agricultural sector . Enter them in the first column of the table. 2.2.4.
2. It is worth saying - using fig. 2.2.8, determine which factors best characterize the company’s current strategy and enter them in the second column of the table. 2.2.4.
3. There are usually several possible successful strategies, each with a logical connection between growth policies, product differentiation and market differentiation. For example, in phase G 3 Some firms achieve a dominant position in the market as a result of segmenting demand and updating the product range, while others remain among many competitors, maintaining a growth rate parallel to market dynamics, and create a reputation for themselves as suppliers of high-class goods without developing new products.

   It’s worth saying - using the result obtained at stage 2, create models of two or more sequential success strategies and enter them in the table. 2.2.4.

4. Compare the results of stages 1 and 3 and determine the model of success strategy that has the most in common with the company's current strategy. We will call this the optimal strategy for the firm in the future.
5. Compare each factor of the optimal model with the relevant factors of private substrategies within the current strategy of the company to determine whether the current strategy is optimal. This can be done by assessing with points (on a scale from 0 to 1) the degree to which the factors of the current strategy compare with the factors of the optimal one.

Enter your scores in the last column of the table. 2.2.4, add up the scores and divide them by the number of factors being assessed. You will receive an index with a value from 0 to 1. Let's call it a strategic standard.

We have received a partial explanation of the meaning of the adjustment factor a, which appeared in the equation given in the previous paragraph: the future competitive status of the firm (FCS) in the agricultural sector is determined not only by the relative level of capital investment, but also by the strategic standard.

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

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

where the second factor represents the above-mentioned strategic standard, and the meaning of the residual factor b will be revealed in the next paragraph.

To summarize this paragraph, we must take the next step in assessing the future competitive status of the company: determine the strategic standard (S F/S 0 )

Assessing future competitive status

To explain the residual factor b, we turn to the third condition that determines competitive positions: the firm's potential to implement the strategy. A detailed list of factors influencing the potential of a 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 carried out in a variety of ways. When considering the characteristics of a company's potential capabilities, we must proceed from the completely obvious position that the success of a strategy depends on the extent to which the company itself has the necessary capabilities to implement the strategy.

Thus, for the success of the firm's strategy shown in Fig. 2.2.8, five conditions are essential, of which the possibilities of managing a company are made up and which are listed in table. 2.2.5. These are the following conditions:

In the same way as in the strategy analysis, Table. 2.2.5 can be used first to determine the firm's current potential, then to determine optimal capabilities, and finally to establish a capability standard. Table also serves this purpose. 2.2.6.

Competitive status of the company = Level of capital investment X Strategic standard X Capability 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 secure an exceptionally strong competitive status and will be one of the most efficient in this agricultural sector. If at least one of the indicators is zero, the company will not make a profit.

For readers who do not have a 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. Calculate a series of products of three numbers and designate with them the elements characterizing 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 - “average” status;

0.25*0.25*0.25 =0.016 or lower - “weak” status.

II. Another option: use the formula to determine the CSF, which gives a linear scale:

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

In this case, the weak position is from 0 to 0.4; average - from 0.5 to 0.7; strong - from 0.7 to 1.0.

Matrix "General Electric" - "McKinsey"

The results obtained in the two previous paragraphs give us the opportunity to construct for the strategic economic zone a version of the matrix that will be devoid of the most significant drawback noted in the BCG matrix, namely, that the elements of its vertical and horizontal construction are too simplified. In the matrix shown in table. 2.2.7, instead of the volume growth indicator (see Boston matrix), the attractiveness parameter of the strategic economic zone was used, and instead of the relative market share, the future competitive status was used. The method of recording ϲᴏᴏᴛʙᴇᴛϲᴛʙ, used in the BCG matrix, is also suitable for the new matrix, which we named after the McKinsey company that developed it. As can be seen 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 demand and technology cycles and under a wide variety of competitive conditions. (Cases of inapplicability of this matrix are discussed in 2.2.14) But, as follows from the previous paragraphs, it can be used only after a number of labor-intensive operations. Therefore, the Boston Matrix retains its value as a simplified analytical method for those C3X that continue to grow at a steady pace and under stable conditions and in which the strength of a firm's competitive status is measured by its relative market share.

The original versions of both matrices were criticized for the fact that they simplified the complexity of the real structure of activity, in the form of a table divided into four cells. This drawback was easily overcome by companies such as Shell and others, who used the 3X3 and even 4X4 format.

A matrix of this type is presented at the top 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 the unconditional instructions that is present in the three elements of the four-cell 2X2 matrix (“optimize”, “reap the full benefit”, “withdraw the invested funds”) It is important to note that at the same time a completely legitimate The question is what these instructions are based on and how decisions should be made if the prospects are not so clear.

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

The assessment of future competitive status is made on the assumption that there will be no changes in the firm's currently planned capital expenditures, strategy and capabilities. If the future competitive status is extremely strong and the attractiveness of the strategic economic zone is great, then, as shown in Table. 2.2.8, managers must decide whether to increase investments in a given agricultural sector or try to maintain this advantageous position.

But the “star” rank in itself may not be sufficient to allocate new capital investments - either for the reason that capital 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 that are more worthy of the company investing in them.

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

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

Finally, with a weak competitive status and unimportant prospects (“dog”), one should not necessarily leave this zone, since its synergistic connections with other agricultural sectors 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 company that has invested small funds in this SZH and has never received high income in it, it is better to wait until its leaders leave the zone.

When they leave, this company will be able to capture the market share of the previous leaders and become profitable. It is appropriate to note that experience has shown that, taking advantage of such a situation, some firms flourish as “successors” in markets that have long been mature and even declining.

Setting a strategic goal

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 about how a new position can be achieved: how the firm's investment direction, strategy and management capabilities must be revised. Therefore, to determine both the future competitive status of the company and ways to ensure it, more detailed analytical work is required.

Analyzing the prospects and competitive status of a company using the McKinsey matrix is ​​considered to be too complex and time-consuming work. In doing so, this work gives the firm not only a more realistic view of its own future, but also the data necessary to justify the firm's preferred strategic position.

This is exactly the procedure shown in Fig. 2.2.9. The results of the preliminary analysis are written 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, which economists call the “cost optimization problem”: is investment in this SZH justified if the company has other needs for the use of strategic resources? By the way, this problem is discussed in the next paragraph.

Analysis of a set of strategic management zones

A comprehensive, balanced analysis of a set of strategic business zones of interest to the company assumes that all zones are compared with each other. This is only possible if all SZH of the company are assessed from the standpoint of choosing strategic positions. Methods for such analysis have been developed in the specialized literature on capital investments.

1. Rank SZH by the size of the expected return on investment, provided that the company chooses strategic tasks that are backed by time resources.
2. Determine the total volume of strategic investment resources that the company will have at its disposal over 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 issuing securities on the market.
3. Starting from the upper level of return on investment, distribute investment resources among the existing agricultural agricultural sector to the optimal level (or adjusted for timing) until all funds have been spent.

It is precisely this mechanical procedure for allocating resources that leads to unfeasible options and unwanted distortions:

a) in this case, certain SZHs 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 these SZHs 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 by balancing life cycles, 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 such areas are occupied by capable and qualified managers, and this resource is always scarce and can be used more productively by the firm. Sometimes it is even profitable to sell your “cash cow” to another company and transfer the most talented manager to another agricultural enterprise.

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

If an important part of company-wide expenses falls on a group of agricultural enterprises, which includes a “dog”, then an internal check of the synergistic effect is necessary in order to determine whether the effect of eliminating the unprofitable “dog” will be accompanied by a decrease in the profitability of the remaining agricultural enterprises;

It may turn out that additional capital investment in certain agricultural sectors is not as attractive as the potential diversification opportunities that open up during the period covered by capital budgets. To take this possibility into account, the company has two ways:

1. Install minimum return on investment, below which financing of SZH is not allowed. Use the same ratio to test the potential results of diversification.
2. Create strategic reserve To finance potential future diversification opportunities, a comprehensive approach to the allocation of strategic investments requires that an analysis of all agricultural assets be carried out in advance. But many firms are forced to make decisions on a number of agricultural zones in the early stages of plan development, before the analysis of all zones is completed. In this case, the minimum return on investment coefficient mentioned above will be a good tool. It is worth noting that it allows you to make a decision on one SZH without looking at the others.

After the investment portfolio has already been balanced, changes may occur in one of the SZHs, which in themselves do not justify the time-consuming work of revising the entire set. And here the coefficient of minimum return on investment will help to correctly approach 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 re-evaluate the entire set, the other is to check the suitability of a given approach to a certain zone based on the minimum return on investment coefficient.

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

1. as a periodic event (every 3-5 years);
2. when the need for revision is caused by a general change in the situation;
3. when dangerous or, conversely, favorable trends arise in any agricultural sector that affect the entire investment portfolio as a whole.

Outside of these situations, to analyze individual strategic areas of management, you should use the minimum return on investment ratio. As can be seen from Fig. 2.2.9, in both cases a decision must be made either to revise the optimal formulation of the tasks, or to plan, finance and implement the newly set task.

Boundaries of application of the McKinsey matrix

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

1. The process of strategic choice described above is essentially a proactive process in the sense that the company anticipates prospects and success factors and outlines in advance positions for itself that will give it the opportunity to take advantage of them.

   But entrepreneurial firms do not stop at predicting the future. It is worth noting that they also create this future themselves: new demand, new products, new technologies. Methods for analyzing such new strategic management zones are given in 2.4.8.

2. The second limitation on the use of the above method is of a different nature. It is worth noting that it follows from the interpretation of uncertainty and unpredictability. The method described above is based on the assumption that the future state of the strategic economic zone can be predicted with sufficient accuracy so that it can be designated by a dot in one of the quadrants (or a circle, showing the scale of the market)

   In a mathematical sense, this leads to a double assumption: a) that the assessment of the most likely prospects for competitive status is in principle possible; b) the probability of such an assessment is so high that other assessments can simply not be taken into account when developing decisions that determine the future status.

   These assumptions are not without foundation, provided that the expected level of instability in the agricultural sector is not too high (within 1-3 points of the scale used in this book. We remind you that the scale was given in Chapter 1.2) But as the level increases instability, both assumptions become invalid. Above 3 points, in addition to the most probable alternative, other alternatives arise that are quite realistic (the probability distribution curve no longer rises to a peak in the region of the most probable outcome)

   Above 4 points on the scale, there are already quite a lot of such relatively real alternatives, and these alternatives themselves can no longer be described so precisely that a company could make a justified choice.

   Based on all of the above, we come to the conclusion that at a high level of instability, the method of determining the future competitive status based on a single probabilistic assessment for each agricultural sector is not only impracticable, but also dangerous.

   To solve the problem of position selection under high levels of volatility, it is critical to reconsider the selection method itself. By the way, this problem is solved in Chap. 5.5.

3. The third limitation applies not only to the choice of strategic positions, but also to any logical analysis, the results of which are vitally important for the fate of managers. It is worth noting that it is associated with the fact that in real life, the rationality of decision-making is ensured 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 establish this authority.

In a job such as determining competitive status, where all three components matter, the results can only be partially based on facts, logic and reason. 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. Managers responsible for “cash cows”, in the aura of recently achieved success, are unlikely to easily agree to their business being doomed to subsequent curtailment. Insisting on their rights in the distribution of strategic investments, they usually give the argument that their agricultural sector will not grow again today or tomorrow. Let us note that those who are responsible for the “wild cats” have not yet gained recognition and authority and therefore most often have weak positions in the distribution of resources, even if the agricultural agricultural enterprises under their jurisdiction may soon transform into saving “stars” .

Based on all of the above, we come to the conclusion that the limitations of a logically based choice of strategic positions essentially lie in the fact that it can easily turn from analytical to paralytic, since the rationale for decisions is distorted under forceful pressure, and their implementation is hampered by that circumstance , that they call into question both the usual way of acting of managers and the existing balance of power between them.

This does not mean that, as proponents of organic evolution hastily conclude, rational decision-making should be abandoned in favor of actions carried out without any plan or system. At the same time, a systematic and strictly justified choice of the company’s strategic positions will bear fruit only on the condition that both the mode of action of managers and the business career conditions for each of them will organically fit into it. By the way, this problem is discussed in Part 6.

conclusions

As long as all the markets in which the company operates are growing and remaining stable, future prospects can be determined by extrapolating past trends. But when a company does not have a clear and stable growth prospect, it is faced with the need for a differentiated assessment of external operating conditions - trends, problems, opportunities - by identifying what we called strategic business areas. Then there is a need to identify divisions within the company responsible for the development strategy of the strategic business zone. It is worth noting that they are called strategic economic centers.

Due to complexity, uncertainty, instability of resource provision, technology development and socio-economic conditions, it may be desirable to distinguish in the external environment of the company specifically zones of strategic resources, zones of strategic technologies, as well as groups of strategic influence.

The next stage of strategic analysis is to determine the company's prospects in each of the strategic business zones. They are determined, firstly, by the opportunities that open up in a given agricultural sector, which is measured by assessments of the prospects for demand and profitability in a given zone, as well as the levels of economic, technological and socio-political instability. The material was published on http://site

Another factor that determines the prospects of a company will be the competitive status that it chooses for itself in a given agricultural sector. Here, the measurements are the relationship between the company's capital investments and the optimal amount of capital investment for a given agricultural sector, as well as the relationship between the company's strategy and the optimal strategy, the management capabilities of the company and what the strongest competitors in this agricultural sector should have.

Having determined future prospects for itself, the company can either accept them, or leave the given agricultural sector, or change its 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 a leading competitor in a given agricultural sector.

Secondly, the amount of time available to make a timely turn is determined. Thirdly, a calculation is made to how much the optimal choice can improve the return on investment of the company. If improvements are not expected, alternative solutions are considered: reducing the requirements for the optimum and reducing capital investments (“squeezing everything out”) or leaving the agricultural sector.

The strategic management zone, in which, with optimal choice, the return on investment improves, should be compared with other agricultural sectors. There are two ways of comparison: analysis of the full set or application of the minimum return coefficient from which additional development financing begins. If the overall ratio, composition and set of strategic management zones are in question, the second method should be used with caution.

The method of strategic choice described in this chapter has several limitations: it is not suitable for creating new SZHs, it leads to a distorted understanding of external conditions with high instability, and it does not take into account how the habitual mode of action of managers and the conditions for the development of their business careers affect decision-making. These limitations will be discussed in later parts of the book.

13. SELECTION AND EVALUATION OF A COMPANY’S STRATEGIC POSITION IN THE MARKET

Logical section structure

13.1. Strategic management zones (SZH)

SZH (Strategic business unit - SBU) is a grouping of business zones based on the identification of some strategically important elements common to all zones. Such elements may include an overlapping set of competitors, relatively similar strategic goals, the possibility of unified strategic planning, common key success factors, and technological capabilities. The pioneer of the application of SZH concepts in business is the General Electric company, which grouped its 190 areas into 43 SZHs, and then aggregated them into 6 sectors.

The managerial significance of the SZH concept is that it enables diversified companies to rationalize the organization of diverse areas of business. SBAs also help reduce the complexity of preparing a corporation's strategy and the interaction of the firm's areas of activity in various industries.

SZH can also be considered as a separate segment of the market environment to which the company has or wants to have access. The hierarchy of SZH allocation is presented in Fig. 49.

Under strategic position analysis(strategic analysis, strategic portfolio analysis, strategic set analysis) of an enterprise refers to the identification of strategic areas of management, their relationship, environment and other important characteristics.

In modern conditions, even a fairly small and simple enterprise carries out its production and economic activities in various segments of the economic space. Such segments are called strategic management zones (SZH). In other words, SZH is a segment of the enterprise’s environment to which it has access or plans to obtain such access. The totality of current strategic management zones forms strategic portfolio enterprises. The allocation of resources across various SZHs and the relationship between SZHs and the external environment determine strategic position companies.

Identification of strategic management zones

Identification of SZH occurs in the following order. The strategic area is determined by market needs, technology, customer type and geographic area. Prospects for the development of SZH are assessed from the point of view of market growth, profitability rates, instability and key success factors. The defining indicators of development of the management zone are:

• development phase (life cycle phase);
• market size;
• purchasing power (effective demand);
• existing barriers to entry;
• buying habits;
• composition of competitors;
• type and intensity of competition;
• main sales channels;
• government regulation;
• indicators of development of the external (economic, socio-political, technological) environment.

Conventionally, the scheme for identifying strategic management zones is presented in Fig. 1 and in example 1.

Rice. 1 Scheme for identifying strategic management zones

Table 1 Strategic management zones of RAO Rosneftegazstroy

The number of agricultural enterprises can be large (depending on the scale of the company’s activities), but in order to ensure the rationality of strategic decisions, a fairly narrow circle should be selected (no more than 50) by combining management zones with similar parameters or by cutting them off.

After determining the totality of agricultural storage facilities occupied by the enterprise, i.e. strategic portfolio, it is necessary to conduct research on the current state of this strategic economic zone, its prospects and directions of development.

Then a direct analysis of the strategic position of the enterprise is carried out using known means, such as:

• BCG matrix;
• matrix AD Little;
• Shell matrix;
• McKinsey/GE business screen;
• Ansoff and Porter matrices.

BCG Matrix (Boston Consulting Group)

One of the most common strategic analysis tools is the growth/market share matrix of the famous American consulting firm BCG. The matrix is ​​based on the assumption that cash flows are indicators of the success of a company's activities in various strategic business areas and are correlated with its share in the corresponding market and the growth of this market. The use of funds (outflow) is necessary in the case of significant market growth (fast growing markets require investments in the development of the corresponding strategic areas of the enterprise), and the generation of funds (inflow) is a function of the occupied share.

In accordance with such assumptions, the entire strategic portfolio of an enterprise can be classified and depicted in the form of a 2x2 matrix. Each cell of the matrix describes different types of SZH included in the strategic portfolio, as shown in Fig. 4.3.2.

Let us briefly describe the various segments of the strategic portfolio as they are represented in the matrix.

High market share and high growth(usually such SZHs are figuratively called “stars”). Such “stars” generate a large volume of positive cash flows, but at the same time, their investment needs are large. Therefore, all positive cash flows are eaten up by the “star” itself. These SZHs are the future of the company and therefore require management support. As market growth declines, agricultural producers become cash cows.

High market share and low market growth(“cash cows”). These strategic zones produce more money than they consume. They are the main source of the company's current well-being. The main strategy for operating in such markets is to maintain the existing market share without attempting to expand activities.

Low share and high market growth(“problem children”), sometimes “wildcats” or “problem marks”. SBAs in this category require investment more than they generate cash. Strategies for action in these SBAs can be either leadership or exit.

Low market share and low growth(“dogs”, “dogs”). The strategy in this category of strategic zones would be to maximize positive cash flows, even if these actions lead to exit from the SZH.

Using this tool, you can identify the relationship between SZH and their effective interaction, behavior strategies in various markets, investment needs and predict cash flows.

The BCG matrix can also be used to forecast or plan strategies for various agricultural sectors. A conditional example of such an analysis, taking into account the time factor and the dynamics of market development, is shown in Figure 4.3.3.

AD Little Business Profile Matrix

Another strategic analysis tool was developed by the equally famous company Arthur D. Little. This matrix is ​​based on two dimensions - market/competitive position

and industry maturity. The stages of development of a national economic sector resemble the life cycle of a product - 4 stages from “inception” to “aging”. Competitive positions have 5 categories: from weak to dominant. At the intersection of dimensions, strategic management zones are positioned, their key characteristics and strategies for their development are determined. The AD Little matrix is ​​shown in Table 2.

Table 2 Matrix AD Little

Shell International Matrix

This tool is used for strategic analysis and solving strategic and political issues of the enterprise and is based on two dimensions: the profitability of agricultural enterprises and the competitive position occupied by the company in this strategic zone. These two dimensions are constructed from many factors that vary across industries, making the tool flexible enough to be applied in appropriate settings.

Profitability is determined by the growth and quality of the market. Market quality is determined by the past profitability of the sector and structural characteristics, such as the saturation of the sector with competing firms, the likelihood of product differentiation, the degree of substitutability of the sector's products, the degree of concentration, market fragmentation, the ease of changing suppliers, cost and technological barriers to entry, and others.

The competitive position is determined by factors such as market share, production capacity, and research and development capacity.

By positioning various SZHs in such a matrix, it is possible to determine which strategy to choose for each of the strategic zones and for the overall strategy of the company. Table 3 presents Shell's matrix outlining appropriate strategies for each type of business.

Table 3 Shell Matrix

McKinsey/GE business screen

The business screen was developed jointly by consulting firm McKinsey and General Electric. This strategic analysis tool is a matrix with two dimensions:

• the company's strengths in this strategic business area;
• attractiveness of the economic sector (SES).

The assessment of SZH according to these measurements is carried out on the basis of an analysis of the following factors.

To assess a company's strengths:

• market size;
• market growth;
• market share;
• competitive position;
• profitability;
• technological position;
• business image;
• personnel potential.

To assess the attractiveness of a sector:

• sector size;
• price trends;
• market growth;
• market diversification;
• competitive structure;
• rate of return;
• technical and innovation trends;
• social factors;
• environmental requirements;
• legal aspects.

As a result of determining the position of each of the company's SZHs, it is possible to determine action strategies for each of them.

The conditional matrix of the business screen is shown below.

Ansoff and Porter matrices

Another well-known tool for strategic analysis is the I. Ansoff matrix, with the help of which you can explore the general outlines of strategies for certain trends in the development of a company or individual strategic areas of management, as well as the range of problems associated with the development of a company. If a company intends to enter a new market without changing its product, then it must implement a market penetration strategy. If a company wants to develop both a new product and a new market, then it should adhere to a diversification strategy. And so on in accordance with Table 4, depicting the Ansoff matrix.

Table 4 Ansoff Matrix

For a more specific analysis of possible strategies for the company as a whole or in individual strategic business areas, M. Porter’s matrix is ​​often used, shown in Table 5. To develop an entire market sector, it is advisable to use either a differentiation strategy or a cost leadership strategy, depending on how the company intends to expand market share (or what type of competition prevails in this sector) - through price methods (low costs compared to competitors) or non-price methods (highlighting the distinctiveness of the product from the point of view of consumers).

Table 5 Porter Matrix

After analyzing the strategic portfolio using one or more of the matrices suggested above, it is advisable to evaluate the flexibility of the strategic portfolio. The flexibility of a strategic portfolio is understood as the ability of the latter to function sustainably in the face of certain changes in the external environment.

Assessing strategic portfolio flexibility

The simplest and fastest test of the flexibility of a set of strategic business areas is to determine the degree of concentration of sales and/or profits. A high concentration of sales/profits in one agricultural sector and a low level of the same indicators in others indicates a potentially low flexibility of the enterprise's strategic position.

The flexibility of the strategic set can be analyzed in more detail using the impact table (see Table 6).

Table 6 Table for assessing the impact of the external environment on the strategic portfolio

The first column contains a list of the most likely and significant potential surprises. The potential impact of each surprise, its likelihood of occurrence, and its timing should be assessed. After this, the final assessment of the impact of the unexpected on the company’s activities in the strategic business area is determined by multiplying the three indicators mentioned above (impact, probability, duration of action). Based on the final assessment, the flexibility of the firm's entire strategic portfolio can be analyzed. If different SZH react to a potential surprise in the same way, then we can state the company's low flexibility in relation to this surprise. If such a situation arises due to many surprises, then it must be recognized that the current strategic set has low flexibility.

Assessing the synergies of the existing strategic mix

Synergy is assessed using the matrix of mutual support of strategic business zones (see Table 7). The columns correspond to SBAs that create a synergistic effect, and the rows correspond to those that receive additional synergistic effects from their joint activities. The final column accumulates estimates of the total dependence of SBAs on each other, and the final row is the total contribution of SBAs. The elements of the matrix indicate the nature of mutual support, for example, transferred technologies, as well as an assessment of the economic effect of such support.

Table 7 Mutual support matrix

Once management balances external threats and opportunities with internal strengths and weaknesses, it can determine the strategy to follow. At this stage, management has already answered the question: “What business are we doing?” and now ready to deal with the questions: “Where are we going?” and “How do we get from where we are now to where we want to be?”

The strategy selection process consists of the stages of development, refinement and analysis or evaluation. At the first stage, strategies are created that allow you to achieve your goals. At this stage, it is important to develop as many alternative strategies as possible. At the second stage, strategies are refined to the level of adequacy to the diverse goals of enterprise development. A general strategy is being formed. At the third stage, alternatives within the chosen overall strategy of the company are analyzed and assessed according to the degree of suitability for achieving its main goals. This is where the general strategy is filled with specific content. The modern concept of strategic planning provides for the use of an effective methodological technique when developing an organization's strategy - strategic segmentation and identification of strategic management zones.

Strategic business zones (SZH) are a separate segment of the company’s environment to which it has or wants to gain access. The parameters for isolating SZH from the external environment of the company are: a certain need (for example, the need for food or clothing); technology by which this need can be satisfied. Thus, the need for food can be satisfied by using technologies from the agro-industrial and processing industries, as well as auxiliary technologies for the production of paper, glass and plastic containers. The need for warm clothing can be satisfied by using technologies from the textile, leather and fur industries; type of client (for example, population, social organizations, government organizations); geography of demand (considered from the point of view of the stage of the demand life cycle and the level of demand satisfaction).

The same need can be satisfied with different production technologies and a different set of them. The art of determining a set of technologies when isolating SZH is to ensure that the enterprise achieves a synergistic effect from their interaction. Speaking about the correct choice of strategy, it should be noted that an important task of strategic management is to determine the proportions and rates of curtailment of one production and development of another production. An enterprise can move from one economic zone to another.

There are several known models for choosing a strategic position. All of them are based on assessing the future state of the SZH using two simple or complex parameters (Y, X) and determining positions on the SZH based on the distribution of their parameters in the cells of the 2x2, 3x3 and 4x4 matrix. The most common models for assessing the choice of strategic position are presented in Table 1.

Table 1. Model for assessing the choice of strategic position

Russian companies still do not have the practice of strategic segmentation of their environment and development of the company's market structure.

Let's take a closer look at the two-dimensional BCG matrix “Growth Rate - Market Share”. In this analysis model, for each SZH, an expert estimate of future growth rates and market share is determined in comparison with the share of the leading competitor.

It involves the following set of strategic decisions. (Picture 1)

Picture 1

“Stars” - protecting and strengthening the position; “dogs” - getting rid of strategic management zones if there are no compelling reasons for their preservation; “cash cows” - strict control of capital investments, transfer of excess revenue under the control of senior management; “wild cats” - conducting further study (can the SZH data, with certain investments, turn into “stars”?). You should be aware that strategic decisions may be called differently in different publications. So, “dogs” can be called “lame ducks”, “wild cats” - “question marks”.

In contrast to the BCG matrix, the General Electric-McKinzy two-dimensional matrix is ​​called “Attractiveness of SZH - position in competition.” The decisions made based on the analysis of this matrix are similar to those that can be obtained when analyzing the BCG matrix. The decision rules are the same as when analyzing the BCG matrix. “Wild cats” - conducting further study (can the SZH data, with certain investments, turn into “stars”?). You should be aware that strategic decisions may be called differently in different publications. So, “dogs” can be called “lame ducks”, “wild cats” - “question marks”. In contrast to the BCG matrix, the General Electric-McKinzy two-dimensional matrix is ​​called “Attractiveness of SZH - position in competition.” The decisions made based on the analysis of this matrix are similar to those that can be obtained when analyzing the BCG matrix. The decision rules are the same as when analyzing the BCG matrix.

table 2

So, “dogs” can be called “lame ducks”, “wild cats” - “question marks”. In contrast to the BCG matrix, the General Electric-McKinzy two-dimensional matrix is ​​called “Attractiveness of SZH - position in competition.” The decisions made based on the analysis of this matrix are similar to those that can be obtained when analyzing the BCG matrix. The decision rules are the same as when analyzing the BCG matrix. Strategy implementation management . Managing strategy is a very complex issue. A strategy manager must be able to assume multiple leadership roles and act as an entrepreneur and strategist. Administrator and executor of strategy, assistant, mentor, speaker. Resource distributor, advisor, politician, mentor and beloved leader.

Experience has repeatedly proven that segmentation of a company’s environment when determining SZH. presents a difficult challenge for managers. The reasons for the difficulties are, firstly, that many people find it difficult to change their point of view: they are accustomed to seeing the external environment from the standpoint of the traditional set of products produced by their company, and they have to look at the environment as the sphere of the birth of new needs that can attract any competitor. Ansoff has found that, from a practical standpoint, it is useful to advise managers not to use the traditional names or characteristics of their firm's products when separating SBAs.

The second source of difficulty is that the SZH is described by many variables. Before adopting this concept, a company assessed its environment by the growth rate of the industries in which it operated. SZH should be described using the following parameters.

1. Growth prospects, which should be expressed not only by growth rates, but also by the characteristics of the demand life cycle.

2. Profitability prospects that do not coincide with profit prospects (the enormous growth of the 64-kilobit memory chip market has provided an example of prosperity without profit).

3. The expected level of instability at which prospects become uncertain and may change.

4. The main factors of successful competition in the future, which determine success in the agricultural sector.

In order to make sufficiently rational decisions regarding 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) that differ significantly from each other in the process of market segmentation. In this case, it is necessary to select a fairly narrow range of SZH, otherwise decisions on them will lose completeness and feasibility. In practice, in large firms you can find from 30 to 50 SZH. Of course, the same number may end up in smaller firms if their diversification is broad.

Figure 2 - Procedure for identifying strategic management zones

The procedure for isolating SZH is shown in Fig. 2. As you can see on the left side of the figure, this process begins with identifying the needs that need to be satisfied, then moves on to the issue of technology and to analyzing the types of customers. Different categories of clients (end consumers, industrialists, professionals, government agencies) are usually considered as different SZH. The next classification is based on the geography of needs. On the right side of the figure is a list of factors that can be completely different within two countries. There may be regional differences within a country that must be taken into account through further market segmentation. At the same time, 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.

Systematic strategic planning was born in an environment of abundant resources. Planners focused only on selecting the most attractive markets, technologies, geographic areas, and product mixes for the firm. To implement the strategy, they determined the needs for financial, human and material resources, expecting that the heads of financial, personnel and procurement services would satisfy these needs without difficulty.

Events in recent years cast doubt on whether such conditions will continue in the future. First, the Club of Rome's research gave the world a general understanding of how limited natural resources are. Then the oil crisis demonstrated how rapidly rising resource prices can undermine and completely destroy the product-market strategy of any company. Finally, global stagflation has led to a shortage of monetary resources and has slowed the growth of many firms. In the future, we should expect shortages and limited access to resources due to both physical scarcity and political reasons.

The new challenge is to broaden the firm's strategic perspective so that resources can also be taken into account along with market perspectives. Everyone imposes resource limitations. Tighter limits on what a firm can achieve in product markets. In many firms experiencing these constraints, planning is actually carried out using the input-to-output method: first it is established what resources the firm can have, and then, based on these data, the firm determines its product-market strategy.

From the point of view 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 for managers to accept is a new procedure. In the industrial era, growth horizons expanded indefinitely and benchmarks were set only to the extent of the aggressiveness of managers and their propensity for business adventures. In the world of a post-industrial economy, with limited resources, managers have to balance what they would like to do with what they can do. The matter does not necessarily come down to passive acceptance of resource limitations. There is as much room for creativity in developing entrepreneurial resource strategies as there is in developing product, market, and technology strategies. When a firm faces challenges in securing strategic resources, identifying strategic resource zones within the firm's resource needs is an important step in formulating the firm's resource strategy.

In addition to resource constraints, the firm is increasingly subject to the influence of legislative frameworks, social pressure, interference in decision-making, and actions from various groups both inside and outside the firm that are not involved in the management process.

Even 20 years ago, it was believed that this was a secondary problem, 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 a company brings to society and how important it is for society to not interfere in order for it to bring these benefits. The solution was educational work, to explain to the general public the spirit of free enterprise, and also to seek government support for business. These positions consisted of constant and firm resistance to any form of restriction of managerial freedom. But over the past 20 years, the number of restrictions in one form or another has increased. The ordinary consumer ceased to exist as a modest and unknown buyer - he was transformed, became a demanding, picky critic; governments, especially European ones, began to make directive decisions; the general public became increasingly disillusioned with the firm.

Thus, relations with society cease to be a secondary problem and become one of the key ones. In addition to market and resource strategies, firms will increasingly have to develop strategies for relations with society. The first step in formulating such strategies is to understand the disparate socio-political influences and sort them into distinct, strictly defined groups of strategic influence.

The modern concept of strategic management involves, when developing an organization's strategy, highlighting in the external environment strategic management zones(SZH) and within the organization - strategic business units(SBE). This approach is relevant for diversified companies whose activities extend to numerous markets and market segments.

Factors that determine the prospects of individual agricultural enterprises may vary in different countries, and even within one country there may be regional differences in business conditions. All this must be taken into account when allocating SZH.

The attractiveness of the SEC can be described using the following indicators:

Growth prospects should be expressed not only by growth rates, but also by demand life cycle characteristics and other factors influencing growth prospects;

Profitability prospects, which may not be consistent with profitability prospects;

An expected level of instability at which prospects are uncertain and subject to change;

The main factors of successful competition in the future that determine success in the agricultural sector.

In addition to the concept of separating SZH, many large companies create strategic economic centers or, in other words, SBU - an intra-company structural unit responsible for the development strategy in one or more SZH. The main criterion for the formation of a SBU within a company is the effectiveness of development in this strategic direction. This idea, associated with the decentralization of strategic planning, was first applied by the American company General Electric, which identified 30 strategic centers in its main areas of activity.

The number of SBUs depends on the degree of diversification of the firm, its resources and the willingness of senior management to delegate authority. A large number of such departments leads to an overabundance of planning and information overload of senior management (simultaneous processing of many plans). With a limited number of SBUs, important differences in planning, goals, strategy, and tactics may be ignored.

It is well known from business experience that the concept of separating SBAs and SBUs is a necessary tool that provides the company with a clear idea of ​​what its environment may become in the future, which is extremely important for making effective strategic decisions.

After a company has identified individual market segments in which it operates or which it intends to develop, it is advisable to assess their prospects. The main purpose of such an analysis is to obtain an assessment of the attractiveness of economic opportunities for business in each SZH of the company, which is extremely important for making effective strategic decisions. The object of such analysis is forecasting economic, technological and socio-political factors, extrapolating past trends in demand and profitability in a particular agricultural sector and assessing their prospects taking into account possible changes.

The first step of the analysis is to identify such zones (from among those that are fundamentally accessible), and the result of the analysis is an assessment of the prospects that open up in this area.

Relatively speaking, you need to decide: where to go with your business - to the Tambov region or to the Voronezh region? A partial answer to this question is provided by a comparison of the levels of competition that have developed in each of the possible SZHs. To make such a comparison, it is necessary to know the market shares of leading competitors in the business area. Then the so-called Herfindahl-Hirschman index is applied - the sum of the squares of the market shares of the main competitors.

Let’s assume that in the Tambov region the leader has a market share of 0.4 in the total sales volume for our product group, and the contender for leadership has 0.2. In addition, there are 8 more relatively small competitors, the market share of each of which is 0.05. In Voronezh the situation is different: the leader’s share is 0.3, its closest competitor is 0.1 and 12 more competitors with a market share of 0.05 .

kt/o=0.4²+0.2²+8.0.05²=0.16+0.04+8.0.0025=0.22

kv/o=0.3²+0.1²+12.0.05²=0.13

The index for the Voronezh region is significantly lower, which means that the company will feel better here (kmax=1, the only competitor d=100%).

However, calculating one index is not enough; a more comprehensive assessment was proposed by I. Ansoff and includes the following steps:

1. Assessing the necessary attractiveness of agricultural storage facilities: the organization’s claims and the requirements of a set of business projects are taken into account.

2. Analysis of the elements of actual potential: involves conducting your own comparative assessment of various SZHs and making a preliminary choice.

3. Development of a system of strategies: taking into account the previous stages, specific business projects and the main means of their implementation are developed.

4. Assessing the compliance of the actual potential with the system of strategies, that is, the predicted values ​​of results and the resources required to achieve them are compared.

5. Assessing the sufficient attractiveness of the SZH: the final strategic decision is made, taking into account the claims of the organization. If necessary, they may be subject to adjustment.

The most serious stage is the stage of analyzing the elements of actual potential - positioning.

An interesting approach to positioning Russian regions has been practiced by the Expert rating agency for several years. In accordance with their methodology, the investment climate (investment attractiveness) of the regions is subject to assessment, including investment potential and investment risk. The rank of an individual region for each type of potential depends on a quantitative assessment of the value of its potential as a share (%) in the total potential of all Russian regions, taken as 100%.

The investment potential of the region consists of private potentials: resource and raw material, labor, production, investment, institutional, infrastructural, financial, consumer.

The magnitude of investment risk shows the probability of loss of investments and income from them. Integral risk consists of seven types of risk: economic, financial, political, social, environmental, criminal, legislative. The region's rank for each type of risk is determined as the relative deviation from the Russian average risk level (=1).

Security questions on the topic

1) Characterize the external environment of Russian business from the point of view of economic, political, demographic, social, scientific and technical factors.

2) Consider the opportunities and threats that may arise for Russian enterprises in various industries.

3) How can changes in the macroenvironment affect a company through interest groups in the microenvironment? Give examples from Russian practice.

4) Justify why it is necessary to study competitors. Is it always necessary to study competitors?

5) Give the concept of a strategic group of competitors. What is the procedure for mapping the strategic groups of competitors?

6) Justify why it is necessary to study suppliers and consumers.

7) What is strategic segmentation? What is the object of analysis when assessing the attractiveness of SZH?

Lecture 6. Methodology of strategic analysis

home » Investments » Strategic management zones (SZH). Strategic management zones: definition of the concept, characteristics, assessment Strategic management