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Strategic thinking for the future.

Strategic Thinking For the Future

Strategic thinking is an orientation about uncertainty beyond the next budgeting cycle. The future is expected to be a complex and volatile environment. Each organization must construct its competitive strategies and strategic thinking is a means to explore future possibilities that should drive these strategies. Various techniques, such as alternative scenarios, are available to accomplish this broad view of the competitive terrain.

This long-term thinking should go beyond the short-term and reflect fundamental propositions in the industry. For most industries, two are product life cycles will continue to shorten and time issues will increase in importance. Therefore, three guiding questions are:

* What are we allowed or forced to be?

* What can we be?

* What do we want to be?

Consequently, strategic thinking must consider the generation of options and assessment of their consequences without being dependent on past choices. Also, once options have surfaced, likely competitive responses can be tested. Then, the outcomes must be evaluated to determine the implications for growth or retrenchment over the strategic time frame.

Given its competitive forces, a company must address via strategic thinking ten pivotal questions involving the fundamental dynamics of industry participation:

* Should there be focus on a common theme, such as customer satisfaction?

* How can both internal and external information to improve the business be obtained?

* How can the firm improve its relative cost, quality, and service rankings?

* How can operations (such as procurement, manufacturing, or distribution) be used for advantage in the business?

* Does the firm have the mix of non-operational activities needed to achieve its profitability, revenue, and volume targets?

* Is the company making appropriate investments in capabilities and technologies needed to ensure future market positioning?

* Does the company have the right resources, such as skills and facilities, needed to win with customers?

* How can competitive barriers be erected and protected?

* Should the firm pursue any new ventures?

* What new governmental regulations or industry practices should be anticipated?

Sun Microsystems, a supplier of technical workstations and servers, has a unique vision of computing. It pioneered the concept of open systems computing and an aggressive price/performance product strategy. All of its managers and employees understand that user satisfaction is the real business mission. This distinctive strategic thinking has made Sun an industry leader.

Strategic thinking is intended to help a company determine the nature of its industry environment, plus anticipate a variety of developments impinging on the firm's ability to compete effectively. Strategic thinking will not guarantee business success. However, flexibility of management thinking is one key to success in the future.

Nick W. McGaughey is a principal in the Process Industries division at SRI International in Menlo Park, California.
COPYRIGHT 1990 Institute of Industrial Engineers, Inc. (IIE)
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Title Annotation:Perspective
Author:McGaughey, Nick W.
Publication:Industrial Management
Date:Jan 1, 1990
Previous Article:Competitive success: supporting operational level participation.
Next Article:Going with the flow - but which way is the flow going?

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