What Is Strategic Architecture?

Strategic Architecture is a concept put forward by Hamel and Prahalad in order to formulate a strategy. They call the company's strategy development process of transforming its existing core competitiveness into future competitive advantages as a strategic structure. The purpose of designing a strategic structure is not to maximize returns or shareholder equity in the immediate market, but to identify and integrate existing competitiveness, capture future market opportunities, and prepare for maximizing returns in the future. The strategic structure is an extensive opportunity and roadmap that outlines the company's roadmap towards future competitive goals that may not be achieved in the next few years. The strategic structure not only sets out the ambitious goals that the company will achieve in the future, but also provides the path to reach those goals.

Strategic structure

Right!

Strategic Architecture is a concept put forward by Hamel and Prahalad in order to formulate a strategy. They call the company's strategy development process of transforming its existing core competitiveness into future competitive advantages as strategic structure. The purpose of designing a strategic structure is not to maximize returns or shareholder equity in the immediate market, but to identify and integrate existing competitiveness, capture future market opportunities, and prepare for maximizing returns in the future. The strategic structure is a broad opportunity and roadmap that outlines the company's roadmap towards future competitive goals that may not be achieved in the next few years. The strategic structure not only sets out the ambitious goals that the company will achieve in the future, but also provides the path to reach those goals.

Chinese name

Strategic structure

Foreign name

Strategic Architecture

Strategic structure

Transformation of core competitiveness into future competitive advantage

Before

Determine company goals

Resource target

Capabilities and resources to operate in a strategic model

Use of strategic structure

The premise of using a strategic structure to formulate a company's strategy is to determine its goals. Company goals can be divided into resource goals (Action Objects), action goals (Action Objects) and motivation goals (Intent Objects). Resource goals are the company's capabilities and resources to operate under a certain strategic model, including competitiveness goals, capability goals, and strategic asset goals. Competitiveness is a collection of identifiable skills and technologies within a company, which reflects the company's collective learning capabilities. Capability is an organic combination of processes, activities, tasks, and technologies that contribute to the company's strategic realization. It is a collection of strategic organizational operations. Strategic assets include tangible and intangible assets. Collis and Montgomery believe that both the company's tangible and intangible assets can play a key strategic role.

The goal of the activity includes strategic innovation activities and business processes. Strategic innovation activities refer to guiding projects and activities to achieve strategic operations, and processes refer to corporate business activities that use company resources to create benefits for customers, and are an orderly combination of various activities that constitute the customer value chain. To gain a competitive advantage, these activities are either different from competitors or organized in a more efficient manner.

The motivation goal reflects the desired result of the strategic structure, and it includes Customer Value Proposition, Economic Value Proposition, and Strategic Value Proposition. Customer value orientation is the motive behind customer purchasing behavior. To build a strategic structure, it is important to understand what value customers are paying for. Economic value refers to a specific outcome that is expected to increase shareholder wealth. Companies must not only care about the market share and growth of their products, but also must create value for shareholders. The concept of strategic motivation was proposed by Hamel and Prahalad in 1989. It is the company's asymmetric strategic competitive goal, hidden behind the strategy, running through the company's culture and the entire process of operation, and acting as a motivational factor. The Strategic Motivation Orientation Objective puts the company's positioning in the established competitive market concisely, explains the company's strategic motivation, and reflects the results of the company's strategic motivation.

Once the goals are defined, a strategic structure can be established. The purpose of establishing a strategic structure is to create a road map that can transform the company's existing competitiveness into the external value goals it expects to achieve in the future market.

There are two major problems when using Hamel-Prahalad's strategic structure method to formulate a strategy. One is that it is impossible to achieve effective communication of the strategic structure within the company, thereby failing to achieve strategic identification. , Can not achieve related resource allocation. The key to solving the problem is to break the gap between strategy formulation and strategy implementation management. Starting from a common strategic goal, at the same time, establish a strategic structure and strategic control system to achieve the organic connection between strategy formulation and implementation and control. The balanced scorecard and key success factors approach provide powerful tools for achieving this convergence.