The Concept of Strategy

OUTLINE

The role of strategy in success

A framework for strategy analysis
The evolution of strategic management
Corporate strategy and business strategy
Strategy making: Design or process?
The role of strategy
 Components of Success
MADONNA GIAP & NORTH LANCE ARMSTRONG
VIETNAMESE

GOALS Single-minded quest for Reunification of Winning the Tour de

stardom. Vietnam under France
Communist rule.
UNDER- Identified emerging Intimate knowledge of Diagnosis of the
STANDING THE trends in popular culture. terrain Understanding physical, psychological
ENVIRONMENT Understood key success U.S. political system. and strategic
factors in showbiz determinants of
individual and team
performance
RESOURCE Recognized limited raw Recognized economic Systematic
APPRAISAL talent. Exploited and military development of
strengths in self- weaknesses and core individual stamina and
promotion, product political strengths team capabilities
development &
relationship management
IMPLEMENT- Commitment and Tight control. Long- Clear delineation of
ATION discipline. Charismatic term commitment. individual roles.
leadership. Team Effective propaganda. Alignment of incentives
building. Attention to Inspirational with team goals.
detail. leadership. Nurturing esprit de corp
 What Makes a Successful Strategy?

Successful
Strategy

EFFECTIVE IMPLEMENTATION

Long-term, Profound Objective

simple and understanding of appraisal of
agreed the competitive resources
objectives environment
 What is Strategy?

Distinguishing strategy from tactics:

Strategy is the overall plan for deploying
resources to establish a favorable position.
Tactic is a scheme for a specific maneuver.

Characteristics of strategic decisions:

Important.
Involve a significant commitment of resources.
Not easily reversible.
 The Evolution of Strategic Management

1950s 1960s-early 70s Mid-70s-mid-80s Late 80s 1990s 2000s

DOMINANT Budgetary Corporate Positioning Competitive Strategic

THEME planning & planning advantage innovation
control

MAIN Financial Planning Selecting Focusing on Reconciling

ISSUES control growth &- sectors/markets. sources of size with
diversification Positioning for competitive flexibility &
leadership advantage agility

KEY Capital Forecasting. Industry analysis Resources & Cooperative

CONCEPTS budgeting. Corporate Segmentation capabilities. strategy.
& Financial planning. Experience curve Shareholder Complexity.
TOOLS planning Synergy Portfolio analysis value. Owning
E-commerce. standards.
Knowledge Management

MANAGE-
Coordination Corporate Diversification. Restructuring. Alliances &
MENT & control by planning depts. Global strategies. Reengineering. networks
IMPLIC- Budgeting created. Rise of Matrix structures Refocusing. Self -organiz
ATIONS systems corporate Outsourcing. ation & virtual
planning organization
 The Basic Framework
Strategy: the Link between the
Firm and its Environment

THE FIRM THE

Goals &
INDUSTRY
Values ENVIRONMENT
STRATEGY
STRATEGY
Resources & Competitors
Capabilities Customers
Structure & Suppliers
Systems
 Sources of Superior Profitability

INDUSTRY
ATTRACTIVENESS

Which CORPORATE
RATE OF PROFIT businesses STRATEGY
ABOVE THE should we be
COMPETITIVE in?
LEVEL

How do we
make
money? COMPETITIVE
ADVANTAGE

How should BUSINESS

we compete? STRATEGY
 Strategy Making : Design or Process?

Strategy as Design Strategy as Process

Planning and Many decision makers

rational choice responding to multitude of
external and internal forces

INTENDED EMERGENT
STRATEGY STRATEGY

REALIZED STRATEGY

Mintzbergs Critique of Formal Strategic Planning:

The fallacy of prediction the future is unknown
The fallacy of detachment -- impossible to divorce formulation from
implementation
The fallacy of formalization --inhibits flexibility, spontaneity,
intuition and learning.
Strategy Making Processes within the
Company: Multiple Roles of Strategy

Strategy as Decision Improves the quality

Support of decision making

Strategy as Coordination Creates consistency

and Communication and unity

Improves perform-
Strategy as Target ance by setting
high aspirations
 The Role of Analysis

Strategy analysis improves decision processes,

but doesnt give answers.

Strategy analysis assists us to identify and

understand the main issues.

Strategy analysis helps us to manage complexity.

Strategy analysis can enhance flexibility and

innovation by supporting learning.