Strategic Analytics

Integrating Management Science and Strategy

Martin Kunc

• Publisher: Wiley
• Year: 2018
• ISBN:
  9781118943687
• Edition: 1
• Topic: Commerce
• Subtopic: Management

Defines common ground at the interface of strategy and management science and unites the topics with an original approach vital for strategy students, researchers and managers

Strategic Analytics: Integrating Management Science and Strategy combines strategy content with strategy process through the lenses of management science, masterfully defining the common ground that unites both fields. Each chapter starts with the perspective of a certain strategy problem, such as competition, but continues with an explanation of the strategy process using management science tools such as simulation. Facilitating the process of strategic decision making through the lens of management science, the author integrates topics that are usually in conflict for MBAs: strategy and quantitative methods. Strategic Analytics features multiple international real-life case studies and examples, business issues for further research and theory review questions and exercises at the end of each chapter.

Strategic Analytics starts by introducing readers to strategic management. It then goes on to cover: managerial capabilities for a complex world; politics, economy, society, technology, and environment; external environments known as exogenous factors (PESTE) and endogenous factors (industry); industry dynamics; industry evolution; competitive advantage; dynamic resource management; organisational design; performance measurement system; the life cycle of organisations from start-ups; maturity for maintaining profitability and growth; and finally, regeneration.

• Developed from the author's own Strategy Analytics course at Warwick Business School, personal experience as consultant, and in consultation with other leading scholars
• Uses management science to facilitate the process of strategic decision making
• Chapters structured with chapter objectives, summaries, short case studies, tables, student exercises, references and management science models
• Accompanied by a supporting website

Aimed at both academics and practitioners, Strategic Analytics is an ideal text for postgraduates and advanced undergraduate students of business and management.

1
Introduction to Strategic Analytics

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Objectives

1. To explain Strategic Analytics
2. To introduce the main pillars of the book: the fields of analytics, management science, information technology, statistics and strategic management
3. To explain the fields of analytics, management science, information technology, big data analytics and strategic management

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Learning outcomes and managerial capabilities developed

1. Managers can learn to tackle complex problems in strategy through the integration of analytics within strategic management processes
2. Principles of Analytics: tools, support systems and methods
3. Identification of strategic problems

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In today's environment, managers face turbulence and crisis. More information than ever is generated continuously: social media, financial performance management systems, customer relationship management systems, and internal and external reports. There are powerful trends: measuring and quantifying everything and skills in quantitative subjects are widely available. The problem for managers is not only to make sense of abundant quantitative information but also to engage with staff possessing analytical skills. Simultaneously managing multiple factors under pressure requires new managerial capabilities. Managers need to develop their strategies using clear strategy processes supported by the increasing availability of data. This situation calls for a different approach to strategy, such as an integration with analytics, as the science of extracting value from data and structuring complex problems.

Managers' decision processes can fall into a continuum which has on one hand pure analysis, which relies on established processes, and pure synthesis that involves identification of patterns and new ideas (Pidd, 2009). Strategic planning involves a mix between both extremes: analysis to identify problems and synthesis to observe trends and emerging situations before competitors. However, there is not a clear process when combining the two. Sometimes, emerging situations are discovered and then analysis is employed to confirm their impact while transforming them into new emergent strategies. In other circumstances, there is a careful planning process involving extensive data gathering and the construction of complex financial, operational and other type models to validate the new strategies.

The idea behind “Strategic Analytics” is to answer a simple question: how can quantitative and qualitative information be used to make strategic decisions? Strategic Analytics does not imply turning managers into quantitative analysts or quantitative analysts into expert strategists. Organizations need interdisciplinary teams comprised by members who can talk to each other sharing a common language. Thus, Strategic Analytics works on the basis of providing a reasonable understanding of how a variety of quantitative methods, in conjunction with structured and unstructured data, can be used to help strategic decision making in any organization. There is also the intent to show the real and practical benefit of Strategic Analytics. Strategic Analytics does not pretend to offer easy solutions to strategic problems but different ways of analyzing and solving strategic problems beyond the traditional qualitative approach to strategic management. Strategic Analytics is also an understanding of the context and processes in which analytics skills can be applied to support strategic management.

Future managers are taught a wide variety of concepts in strategy subjects but they are not taught how to apply them or even to connect them to related problems. Future managers need to develop capabilities to tackle problems that are not structured in a neat way like case studies are. In that sense, each chapter focuses on a case study with limited information that has to be solved applying a combination of theoretical concepts and analytical methods (quantitative and qualitative). The aim of this founding principle is to integrate strategic concepts with analytical tools in a unique set of capabilities (skills) to help future managers to tackle strategic problem using multiple sources of information. The main benefit is that quantitative methods, which are usually seen as a difficult experience for managers, are connected with a hands‐on subject like strategy. Therefore, managers can learn capabilities to tackle complex problems in strategy through the integration of analytics (quantitative/qualitative methods to extract value from data) within strategic management processes. Therefore, the book will provide a bridge to integrate quantitative methods with their application in strategy adding rigorous methods to solve real issues in strategy.

The rest of the chapter introduces the main pillars of the book: the fields of analytics, management science, information technology, statistics and strategic management.

1.1 What is Analytics?

Organizations are competing using analytics because there is an increasing amount of data, people with capabilities to use data and, in a highly competitive environment, it is more difficult to compete effectively. While organizations can use basic descriptive statistics from any of their existing data, organizations using analytics apply modeling to understand their environments, predict the behavior of key actors, e.g. customers and suppliers, and optimize operations. Organizations can obtain competitive advantage using multiples analytics applications but it requires a new type of organization and management (Davenport, 2006):

a companywide embrace of analytics impels changes in culture, processes, behavior and skills for many employees. And so, like any major transition, it requires leadership from executives at the very top who have a passion for the quantitative approach… CEOs leading the analytics charge require both an appreciation of and a familiarity with the subject. A background in statistics isn't necessary, but those leaders must understand the theory behind various quantitative methods so that they recognize those methods' limitations‐which factors are weighed and which ones aren't… Of course, not all decision should be grounded in analytics… For analytics‐minded leaders, then, the challenge boils down to knowing when to run with the numbers and when to ...

Table of contents

• Cover
• Table of Contents
• About the Companion website
• Chapter 1: Introduction to Strategic Analytics
• Chapter 2: Dynamic Managerial Capabilities for a Complex World Under Big Data
• Chapter 3 External Environment: Political, Economic, Societal, Technological and Environmental Factors
• Chapter 4: Industry Dynamics
• Chapter 5: Industry Evolution
• Chapter 6: Competitive Advantage: Static Analysis
• Chapter 7: Dynamic Resource Management
• Chapter 8: Organizational Design
• Chapter 9: Performance Measurement System
• Chapter 10: Start‐ups
• Chapter 11: Maturity
• Chapter 12: Regeneration
• Index
• End User License Agreement