Name: PowerPoint Presentation
Uploaded: 2023-04-18
Duration: 5 min 53 s
Description: Strategic Alignment. Presented by. GROUP 1C – 9A.

Strategic Alignment. Presented by. GROUP 1C – 9A. 

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While research and Development (R&D) is important, it is insufficient to drive innovation within an organisation. To effectively support innovation, companies must have strategic alignment in addition to investing in R&D. While R&D spending is a useful indicator of industry best practices, it is not a reliable measure of a company’s level of innovation.. 

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While research and Development (R&D) is important, it is insufficient to drive innovation within an organisation. To effectively support innovation, companies must have strategic alignment in addition to investing in R&D. While R&D spending is a useful indicator of industry best practices, it is not a reliable measure of a company’s level of innovation.

Arrow: Counter-clockwise curve with solid fill

The perception of technology has evolved from being merely a means to keep up with competition and trends, to being the significance of developing a crucial driver of innovation. Business executives are coming to terms with the importance of developing innovative business models in addition to technology.

“According to a study from PWC, there is no statistically significant relationship between R&D spending and sustained financial performance ”

Logo Description automatically generated. STRATEGIC ALIGNMENT. 

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Strategic alignment is the process of connecting/embedding innovation strategy with corporate goals and objectives. To strategically align entails the need for organisations to carry out innovation that is in tune with set goals.

It entails an organisation having a well-mapped-out plan on what they tend to create or discover through innovation, how it fits with the company’s vision and goal, and having a clear understanding of the various phases that are required to reach the desired outcome. Simply put, Strategic alignment means innovating with purpose.

The integration of innovation into an organization should be deeply embedded in its culture, management process, and the methods used to motivate and inspire employees. To seize new opportunities, companies must be open-minded and willing to occasionally disregard conventional rules. The leaders of an organization must be prepared to make adjustments to the existing budget to support ideas that can drive business growth.

Logo Description automatically generated. THE ROLE OF CULTURE AND ORGANIZATIONAL ARCHITECTURE IN STRATEGIC ALIGNMENT. 

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THE ROLE OF CULTURE AND ORGANIZATIONAL ARCHITECTURE IN STRATEGIC ALIGNMENT

Culture refers to shared values, beliefs, behaviours, and attitudes that shape how people interact and work to words organizational goals. A culture that supports innovation is essential for successful innovation. Such a culture encourages employees to generate and implement new ideas that can lead to significant improvements in products, processes, and systems.

Organizational architecture refers to the structures, processes, and systems that define how work is done. It includes the formal and informal structures, communication channels, decision-making processes, and performance management systems.

ALIGNING STRATEGY, CULTURE AND ORGANIZATIONAL ARCHITECTURE

Aligning strategy with culture and organizational architecture helps  in  ensuring that employees embrace and support the strategy and that the necessary structures and resources are in place to execute it. Organizations that have developed a strong culture and robust architecture that supports their strategy can achieve long-term success.

Logo Description automatically generated. PwC STUDY FINDINGS. 

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No significant relationship between R&D spending and  sustained  financial performance

54%  of executives struggle to align innovation strategy with business goals

72%  of business executives feel they are not out-innovating their competition.

65%  of companies that invest over  15%  of their revenue in innovation believe that aligning business strategy with innovation is their top management challenge.

Logo Description automatically generated. INNOVATION STRATEGIES. 

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companies that focus on identifying unmet customer needs and developing innovative solutions to meet those needs. They prioritize understanding their customer’s problems and pain points and develop unique and innovative solutions based on superior end-user understanding.

These are companies that focus on developing cutting-edge technologies and then finding ways to commercialize them. These companies are often driven by research and development, they invest hugely in technology to stay ahead of the competition.

companies that follow the lead of their competitors, keeping a close eye on market trends and responding with similar products and services. These companies are typically risk-averse and prefer to stick with proven business models.

Logo Description automatically generated. INNOVATION STRATEGIES ( contd ). 

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An organisation’s architecture and culture are influenced by its different innovation strategies. Need seekers  tend to prioritize customer needs and have a more flat organizational structure that empowers employees to make decisions. Technology drivers , on the other hand, prioritize technological advancement and have a more hierarchical structure with decision-making power concentrated among top-level executives. Market readers  prioritize operational efficiency and have a more conservative culture with centralized decision-making.  The concept of  Technology/knowledge push  and  Need pull  are also relevant to different innovation strategies.  Technology/knowledge push  involves developing new technologies and commercializing them, while  need pull  involves identifying customer needs and developing innovative solutions.  People are more likely to innovate when they see a real need for change, rather than simply having new ideas without a clear purpose or motivation Technology drivers  rely on  technology/knowledge push , investing heavily in research and development to create new technologies and finding ways to commercialize them. Need seekers , on the other hand, rely on  need pull , prioritizing customer needs and pain points to drive innovation. Market readers  align with  market pull , as they prioritize adapting existing products to meet market demands.

Logo Description automatically generated. THE IKEA CASE STUDY. 

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Communication of ideas Reception of New ideas Innovation Management

IKEA’s innovation success is driven by three pillars: The desirability of its product offerings by its customers Feasibility of its technology to execute the innovation process. The value obtainable from its offerings.

IKEA, established in 1943, is a company originating from Sweden that specializes in selling ready-to-assemble furniture and home accessories. The company is renowned for its contemporary architectural designs and its emphasis on continuous product development, operational efficiency, and cost management. With a global presence of over 350 stores in about 50 nations,  IKEA has become the world’s largest furniture retailer.

Logo Description automatically generated. IKEA’S INNOVATION STRATEGY. 

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IKEA’s organizational culture promotes innovation by encouraging creativity, openness to new ideas, and risk-taking. The company’s culture encourages employees to share ideas and collaborate on innovative solutions, fostering a sense of entrepreneurship within the organization.  By closely monitoring customer purchasing patterns, the company strives to constantly improve its innovation levels.

IKEA focuses on developing and marketing its products to provide exceptional value to its customers in the market.

The company carefully sets its prices based on the nature and characteristics of the products, aiming to attract both new and existing customers while appealing to a broad audience.

In order to generate profit, IKEA focuses on controlling its operational and manufacturing costs.

The company evaluates the business environment and the consumer market to identify and eliminate  obstacles that may hinder the adoption of its products.

Logo Description automatically generated. ALDI’s STRATEGIC ALIGNMENT CASE STUDY. 

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Aldi is a discount supermarket chain that operates in more than 20 countries worldwide, with its strategy and innovation approach in line with its organizational architecture and culture. The company prioritizes customer experience improvement via product innovation and process optimization while offering high-quality products at affordable prices and promoting sustainability by reducing waste.

The company runs a flat hierarchical organizational structure which emphasizes cost leadership, with a centralized decision-making process. ALDI also foster a culture of continuous improvement, regularly seeking customer feedback through surveys, while also encouraging employee suggestions for improvement.  The company has also embraced technology to streamline its processes, from inventory management to supply chain optimization. ALDI’s innovation strategy is closely aligned with its organizational architecture and culture. The company’s focus on cost reduction and efficiency is reflected in its approach to innovation, which prioritizes process improvement and customer experience

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