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The Mind of the Strategist
by Kenichi Ohmae


Central Theme: Strategic thinking is the synergy of analytical method and mental elasticity.
Assignment: Show examples of 7 of these concepts used in business.
  1. Strategic Thinking: the combination of analystical method and mental elasticity[35] seeks a clear understanding of the particular character of each element of a situation and then makes the fullest possible use of human brainpower to restructure the elements in the most advantageous way."
  2. There are four ways of strengthening a company's position relative to that of its competitors."
    • Key Factors of Success (KFS): and readjust the allocation of resources.
    • Relative Superiority: by building a corporate strategy that's difficult for competitors to imitate.
    • Aggressive Initiatives: are those that change the rules of the game.
    • Exploiting Strategic Degrees of Freedom: exploit the market through the vigirous deployment of innovation.
  3. Develop a market strategy that will give you an edge on the competition and then put it into effect at exactly the right time.
  4. The Strategic Triangle: "consider the corporation itself, the customer, and the competition."
  5. Strategic Planning Units: should be at levels that can freely address Customer segments, Corporate functions, Competitors aspects
  6. Customer-Based Strategies: "distinguish the easily accessible customer groups from the hard-to-reach ones."[99]
  7. Functional Strategies: "The corporation's functional strategies should be clearly distinguished from operational improvements."
  8. Competitor-Based Strategies: "Competitor-based strategies can be constructed by looking at possible sources of differentiation in functions ranging from purchasing, design, and engineering to sales and servicing.
  9. Diversified companies should seek to establish cost and quality leadership through syergies from shared functional resources across various businesses. Otherwise, it is a conglomerate managing a portfolio that limits its purpose to making money.
  10. Japanese corporations are differenct than Western businesses in four ways:
    • Based on a commune or village concept (stockholders the same as bankers).
    • All villagers are equal and each a generalist (emphasizing on actual experience).
    • With no resources, emphasize value-added trade (work hard in good harmony).
    • The central notion is to change the battleground.
  11. Sequential pattern in consistently successful management decision making:
    1. The business domain must be clearly defined.
    2. The most likely scenario must be stated simply and succinctly.
    3. People, technology, and money must be deployed boldly and aggressively.
    4. Guard against overreaching (pace strategy according the resources).
    5. Adhere to basic assumptions as long as they hold.
  12. The three major constraints a strategist needs to be sensative too:
    1. Reality: Be aware of the customer, competition, and your competency.
    2. Ripeness: More strategy fails because it is overripe and not premature (timing).
    3. Resources: Be sensative to resource limitations.

Key Terms and Phrases: Define each of these
  • Aggressive Initiatives
  • Essential Rs (reality, ripeness, and resources)
  • Flexible Thinking
  • Functional Strategies
  • Key Factors for Success (KFS)
  • Organization means people
  • Product Market Segment (PMS)
  • Product Portfolio Management (PPM)
  • Reality constraint
  • Relative Superiority
  • Resources constraint
  • Ripeness constraint
  • Strategic Business Unit (SBU)
  • Strategic Degrees of Freedom (SDF)
  • Strategic Planning Units (SPU)
  • Strategic Sector (SS)
  • Strategic Triangle
  • Strategic Tunnel Vision
  • Value Analysis (VA)
  • Value Engineering (VE)

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