introduction to stratery

1. Strategic Management For Business
Introduction to Strategy:
Origins and Meaning

2. Learning Outcomes
• Define strategy and the core elements of
strategy
• Distinguish between corporate, business and
operational strategies

3. The Role of Strategy in Success
Common Elements in Successful Strategies
Successful Strategy
Simple, consistent,
long-term goals
Profound
understanding of
the competitive
environment
Objective appraisal
of resources
Effective Implementation

4. What is Strategy?
• Some elements / characteristics
– Long term
– Competitive advantage
– Planning
– Distinctiveness
– “Big” decisions
• Significant resources
• Important
• Not easily reversible

5. What is Strategy?
• Where to compete?
– Which businesses should we be in?
– A corporate strategy decision
• How to compete?
– How do we create / build / defend a competitive
advantage?
– A competitive strategy / business strategy decision

6. Strategy is About Choice

7. A Brief History of Strategy
• Origins – strategia (gr.)
- Military strategy: Sun Tzu, c 500 BCE, The Art of War
• Visible in
– Politics
– Companies
– Sport
– Warfare
– Charities?
– Public sector?

8. A Brief History of Strategy
• The Evolution of Business Strategy
- Corporate Planning (introduced in 1950s)
- Strategic Management (1970s)
- Resource-Based View of the firm (1990s)

9. A Brief History of Strategy – Dominant
Themes
Financial Budgeting
(1950s)
• DCF-based capital
budgeting
• Financial control through
operating budgeting
Corporate Planning
(1960s)
• Medium-term economic
forecasting
• Formal corporate
planning
• Diversification and quest
for synergy
• Creation of corporate
planning departments
Strategy as
Positioning (1980s)
• Industry analysis
• Market segmentation
• The experience curve
• PIMS analysis
• Planning business
portfolios

10. A Brief History of Strategy – Dominant
Themes (cont)
Quest for
Competitive
Advantage (1990s)
• Analysis of
resources and
capabilities
• Shareholder value
maximization
• Restructuring and
re-engineering
• Alliances
Strategy for the
New Economy
(2000)
•Strategic innovation
•New business models
•Disruptive technologies
Strategy in the New
Millennium (2009)
•CSR and business ethics
•Competing for
standards
•Winner-take-all-
markets
•Global strategies
Strategy in Turbulent
Times (2011)
- Corporate
governance and social
responsibility
- Organisational
ambidexterity
- Managing risk and
uncertainty
- New forms of
leadership

11. Strategy Today
• What is Strategy?
RATE OF RETURN
ABOVE THE COST OF
CAPITAL
How do we make
money?
INDUSTRY
ATRACTIVENESS
Which industries
should we be in?
COMPETITIVE
ADVANTAGE
How should we
compete?
CORPORATE
STRATEGY
BUSINESS
STRATEGY

12. Levels of Strategy
• Corporate-level strategy – concerned with the overall
scope of an organisation
• Business-level strategy – how individual businesses should
compete in their particular markets
• Operational strategies – how components of an
organisation deliver effective the corporate and business level strategies in
terms of processes, resources and people

13. How Do We Describe a Firm’s
Strategy?
Static
Where are we competing?
How are we competing?
Dynamic
What do we want to become?
What do we want to achieve?
How will we get here?

14. How Do We Identify a Firm’s Strategy?
• The mission statement – ‘Why we exist?’
• A statement of principles and values – ‘What
we believe in and how we will behave’
• The vision statement – ‘What we want to be’
• The strategy statement – ‘What our
competitive game plan will be’

15. How Do We Identify a Firm’s Strategy?
(cont)
• Where is the company investing its money?
• What technologies is the company
developing?
• What new products have been released?

16. Whose interests should be prioritised?
• Shareholders vs. stakeholders
• Profit and purpose
• The debate over CSR

17. Strategy Analysis
THE FIRM
•Goals and values
•Resources and
capabilities
•Structure and
systems
THE INDUSTRY
ENVIRONMENT
•Competitors
•Customers
•Suppliers
STRATEGY