3. Objectives of today
To understand what strategy is and be able to explain it in simple terms
To understand some of the terminology regularly used in a strategic
context
To look at some tools of strategic analysis
4. Strategy – the origins
στραταγός = the General
The one who stands back from the frontline and takes an overview
Strategy is ‘the art of the general’
Studying strategy can be helpful both now and in the future:
- To help you understand the environment you operate in
- To improve your ability to implement
- To improve your own ‘generalship’
5. What is strategy?
"Strategy is the direction and scope of an organisation over the long-term: which
achieves advantage for the organisation through its configuration of resources
within a challenging environment, to meet the needs of markets and to
fulfil stakeholder expectations".
Johnson and Scholes 1998
Strategy is a combination of the ends (goals) for which the
(firm) is striving and the means (policies) by which it is seeking to get there
Michael Porter 1986
Strategy is a plan, a means of getting from here to there. It is a pattern in
actions over time; It is a position; for example regarding particular products
or services in particular markets. It is perspective, vision and direction.
Henry Mintzberg 1994
6. In more detail …
"Strategy is the direction and scope of an
(organisation) over the long-term: which achieves
advantage for the (organisation) through its
configuration of resources
within a challenging environment, to meet the
needs of markets and to fulfil stakeholder
expectations".
Where are you trying to get to?
What markets, services, partners, means?
What benefits?
Finances, customer
Relationships, processes,
People/skills?
What external factors need to
Be considered? What/whose needs/expectations are
you trying to meet?
7. Simply put …
"Strategy is the general plan of actions for
achieving one’s goals or objectives". Nikols 2008
10. Source: professor Marcus Alexander – London Business School
Marcus Alexander’s Lizard sums it all up
Where are
We now?
Analysis
Where could
we go?
Option
generation
Where do we
want to go?
Option
selection
What will
help get us
there?
Engineering
Coherent
support
What should
we do
today?
Implement
11. Some strategic analysis tools
STEP/PEST/PESTLE (Political, Economic, Sociological, Technological, Legal, Environmental)
SWOT (Strengths, Weaknesses, Opportunities, Threats)
Scenario Planning
Market Segmentation
Competitor Analysis
Horizon Scanning
McKinsey’s 7S model
Ansoff Matrix (Markets and Products)
BGC Matrix (Market Share and Market Growth)
GE Matrix (Industry Attractiveness and Business Strength)
Porter’s 5 Forces
Stakeholder Analysis
Look up the ones you
aren’t familiar with
outside
the session
12. Strategy must:
ALIGN With other strategies, initiatives, upwards and downwards
INTEGRATE Across the whole business, and within individual businesses
Be GOVERNED Someone must have responsibility for driving the strategy
through
Be EFFICIENT Strategy must make best use of all available resources
Be EFFECTIVE Strategy must DO what it says it will DO. It must be
measurable
Be SUSTAINABLE Strategy is not just a quick fix, it must last, it must be
prepared to evolve where market influences change
Source: Neville Pritchard (2006)
13. Alignment and Integration
Enterprise Level Strategy
Business Unit
Plans
Head of Function
Objectives
Horizontal integration
Individual objectives
14. In summary
Strategy is about standing back from the frontline
It is about making choices
It is about moving from where you are now to where you want to be
It is about having a clear destination in mind
It is about doing the right level of initial analysis to see where you are
It is about generating options
It is about being aligned, integrated etc
In the seminar we will look at ways in which we can use this knowledge
better
Editor's Notes
Begin the session by asking a question:
You have been asked to go on a Business Trip to Paris – think about what you might do to get there. Invite thoughts and suggestions from the group.
The obvious answer is ‘well, fly there’
But there are other choices and options. Where would you fly from? Which Airport would you fly to? How would you get to the airport? How would you get from the airport to your desitination?
What other alternatives are there? Eurostar? Shuttle? Ferry? Bicycle!!?
Maybe it will depend on where we are starting from.
Explain that it will all become clear as the lecture continues as to why you had that discussion
Στραταγός is pronounced ‘Strategos’ – other than this, the slide is self explanatory
Look at each of these descriptions of strategy – what are the similarities? The main one is that there is a sense of movement from place A to place B. They bring in the ideas of choices, of plans, of direction of travel, of stakeholders etc etc
Now looking at the Johnson and Scholes definition in more detail – highlight the points raised with an arrow. Make sure that the group fully understand the different dimensions of strategy
There are as many definitions of strategy as there are management thinkers – this is probably the most simple, yet still correct definitions I have come across
Strategy is about choices. Here you can refer them back to the discussion at the beginning of the session. What they were effectively doing was outlining their strategy, and making a choice from the various options that were available to them.
Read it out.
Ask them what it has to do with strategy.
Clearly Alice doesn’t have one.
If you don’t have a strategy, yes you will get somewhere, but is it where you want to be?
If you don’t know where you want to be, does it matter?
Professor Marcus Alexander of LBS has devised the Lizard model to help remember the stages of the strategy process
Working from left to right the Analysis stage – I have shown McKinsey’s 7 S, but could also use SWOT, STEEP, PESTEL etc – refer back to environmental scanning. But make sure you don’t take too long over this or it becomes navel gazing
The more options you generate the more choices you have, but beware of creating confusion
Important to go through an effective selection process to choose the right options that all stakeholders are bought into
What will help us get there – development of the formal strategic plan, maybe changing the rules, instigating some change with the resultant fears and insecurities that causes
Implementation – will naturally create some fires to fight along the way, but … a beautifully crafted strategy is nothing if the implementation fails!
Just to help them be clear about what strategic analysis tools there are – how many of them are they already familiar with?
Encourage them to look at any unfamiliar ones beyond the session
This slide sums up that as well as being an end to end process, there are certain rules that it must follow – the Mnemonic AIGEES applies
Run through each line in turn explaining and elaborating as necessary
The next slide elaborates on Alighnment and Integration
Just embellishes the first part of AIGEES.
For example there must be a golden thread of strategy up and down the organisation, in the same way that objectives are cascaded
Conversely it is important that individual business unit objectives don’t compete with each other – sales, marketing, operations etc – you don’t want a strategy that increases sales, that reduces marketing and that places operational support in the wrong place.
Just wrap up with this slide and ask for any immediate questions or concerns
