BUSINESS STRATEGY
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BUSINESS STRATEGY A Guide to Effective Decision-Making
Jeremy Kourdi
THE ECONOMIST IN ASSOCIATION WITH PROFILE BOOKS LTD Published by Profile Books Ltd 3a Exmouth House, Pine Street, London ec1r 0jh www.profilebooks.com Copyright © The Economist Newspaper Ltd 2003 Text copyright © Jeremy Kourdi 2003 All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the publisher of this book. The greatest care has been taken in compiling this book. However, no responsibility can be accepted by the publishers or compilers for the accuracy of the information presented. Where opinion is expressed it is that of the author and does not necessarily coincide with the editorial views of The Economist Newspaper. Typeset in EcoType by MacGuru Ltd
[email protected] Printed and bound in Great Britain by Clays, Bungay, Suffolk A CIP catalogue record for this book is available from the British Library ISBN-10: 1 86197 459 0 ISBN-13: 978 1 86197 459 4
Contents Introduction
1 2 3 4
5 6 7 8 9 10 11 12 13
Part 1 The forces at work Social, cultural and commercial forces Ideas at work Pitfalls Rational or intuitive? Frameworks for decision-making
1 3 5 28 50 66
Part 2 Making it happen: concepts and tools for strategic decision-making Making strategic decisions Scenario thinking Strategies for growth Competitive strategy Customer focus Knowledge and information Managing finance and risk Sales, marketing and brand management decisions Leadership
77 79 103 111 128 139 153 165 186 214
Notes and references Index
227 235
v
Introduction The essence of the ultimate decision remains impenetrable to the observer – often, indeed, to the decider himself … There will always be the dark and tangled stretches in the decision-making process – mysterious to even those who may be intimately involved. John F. Kennedy, former American president
S
trategic decisions are rarely straightforward or simple. This is because they involve value judgments that depend to a large degree on people’s attitudes, perceptions and assumptions. This is why so many strategic decisions turn out to be ill-judged. The aim of this book is to help those who have to make strategic decisions and to throw light on the decision-making process. The first part focuses on the forces shaping major decisions, including ideas, developments and pot