Chapter 1

Mastering Strategy: Art and Science

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What is Strategic Management?

Examines how actions and events involving top executives, firms, and
industries influence a firms success or failure
Formal tools that exist for understanding these relationships are not
enough
Creativity is just as important to strategic management

Example: strategic management examines how actions and events

involving top executives (such as Steve Jobs), firms (Apple), and industries
(the smart phone market) influence a firms success or failure.

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Strategy, Survival and Success

The ultimate goal of the organizations is to be successful success is:

Survival (long-term success)

Achievement of Goals

Above average returns/Profitability (probably most important,

because it determines the ability to achieve the above two)
Strategy can help achieve success, but it doesnt guarantee itcertain
features of strategy directly contribute to success:
1. Goals that are simple, consistent, and long-term.
2. Profound understanding of the competitive environment.
3. Objective appraisal of resources.
4. Effective implementation.
These observations concerning the role of strategy can be made in
relation to most human endeavors be it warfare, chess, politics, sport or
business.
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Competition and Competitive Advantage

Competition provides the rationale for strategy without competition, strategy is of no

concern.
The essence of strategy is the interdependence of competitorsor the establishment of
sustainable competitive advantage over rivals.
The study of strategy involves how we go about identifying, establishing, and sustaining
competitive advantage.

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Thinking Strategically:
The Three Big Strategic Analysis Questions
1. Where are we now? What is our situation?
2. Where do we want to go?
Business(es) we want to be in and market positions we want to stake out
Buyer needs and groups we want to serve
Outcomes we want to achieve
3. How will we get there?

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Defining Strategy The Five Ps of Strategy

(Professor Henry Mintzberg of McGill)

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Defining Strategy The Five Ps

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Defining Strategy The Five Ps

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Defining Strategy The Five Ps

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Defining Strategy The Five Ps

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Plan
Ploy
Pattern
Position
Perspective

Think of a firm that outperforms others.

Which of the five Ps most characterizes WHY they have been
successful?
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In
St tend
ra e
te d
gy

Forms of Strategy

De
lib
era
te
S

tra
teg
y

Unrealized
Strategy

Emergent
Strategy

Realized
Strategy

**Normally emergent strategy comes from

learning and dissemination within the organization.
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Strategies

Intended strategies: Strategy that an organization hopes to execute

Emergent strategies: Unplanned strategy that arises in response to
unexpected opportunities and challenges
Realized strategies: The strategy that an organization actually follows.
They are a product of both intended and emergent strategies
Deliberate strategy: The parts of the intended strategy that an
organization continues to pursue over time
Non-realized strategy: The parts of the intended strategy that are
abandoned

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History of Strategic Management

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Exercise:
*Think about the best and worst companies
you know. What is extraordinary (or
extraordinarily bad) about these firms? Are
their strategies clear and focused or
difficult to define?

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