Strategic Management

ASSIGNMENT

Are You Sure You Have a Strategy?

Submitted To: Submitted By:

Prof. Aarti Singh. Gautam Chopra
281197
 Are you sure you have a strategy?
Key learning from an article by Donald C. Hambrick and James W. Fredrickson from the
Academy of Management Executive magazine 2001 Volume 15, No.4.

Traditional thinking of what is Strategy

There is a very big confusion between what are strategic threads and what is strategy. When
executives call everything strategy and end up with a collection of strategies, they create
confusion and undermine their own credibility. Merely just saying that Our strategy is to be
the low-cost provider or a global firm or to integrate a set of regional acquisitions don’t makes
your strategy. These are the strategic threads but a proper planning of how you going to be
global firm like by acquiring global technology, by specifying cities in which you will start
your business, etc a combination of these kind of threads makes a strategy.

Mere knowledge of Frameworks for analysing strategic situations don’t

work
We have a lot of frameworks like Five forces analysis, Core competencies, Hyper-competition,
The resource-based view of the firm, Value chains, and a host of other helpful, often powerful,
analytic tools. But the point is that we don’t have any any guidance as to what the product of
these tools should be—or what actually constitutes a strategy. How does knowing that their
firm is pursuing an “acquisition strategy” or a “first-mover strategy” help the vast majority of
managers do their jobs or set priorities?

Strategy
• Strategy is derived from the Greek strategos, or “the art of the general.”
• Business generals, whether they are CEOs of established firms, division presidents, or
entrepreneurs, must also have a strategy— a central, integrated, externally oriented
concept of how the business will achieve its objectives.

What is included and excluded from strategy

The key is not in following a

sequential process, but rather in Choices about internal
achieving a robust, reinforced organizational
consistency among arrangements
the elements of the strategy itself. It are not part of strategy.
is not a linear process.

Mission and objectives

stand apart from and guide
strategy.
The Elements of Strategy
As per author there are 5 element of strategy and they are
1. Arena: Where we will be active?
2. Vehicle: How we will be active
3. Differentiators: How we will be active
4. Staging: What will be our speed and sequence of moves?
5. Economic Logic: How we will obtain our returns

Arena:
In articulating arenas, it is important to be as specific as possible about the product categories,
market segments, geographic areas, and core technologies, as well as the value-adding stages
(e.g., product design, manufacturing, selling, servicing, distribution) the business intends to
take on.

Vehicle:
The means for attaining the needed presence in a particular product category, market segment,
geographic area, or value-creation stage should be the result of deliberate strategic choice.

Differentiators:
A strategy should specify not only where a firm will be active (arenas) and how it will get there
(vehicles), but also how the firm will win in the marketplace—how it will get customers to
come its way.
Staging:
Staging is the speed and sequence of major moves to take in order to heighten the likelihood
of success.

Economic Logic:
At the heart of a business strategy must be a clear idea of how profits will be generated—not
just some profits, but profits above the firm’s cost of capital.