The document discusses two strategic approaches—structural and reconstructural. Structural strategies involve analyzing the environment and aligning organizational components to outperform rivals, while reconstructural strategies are necessary in challenging conditions, focusing on reshaping industry boundaries. Success hinges on aligning the value, profit, and people propositions with the chosen strategy.

1. HOW
STRATEGY
SHAPES
STRUCTURE
C R A F T A S T R A T E G Y T H A T D E F I N E S Y O U R E N V I R O N M E N T
breakthroughideas.wordpress.com

2. THERE ARE TWO
TYPES OF STRATEGY:
1 Structural
2 Reconstructural
TYPES OF STRATEGY

3. TYPES OF STRATEGY
STRUCTURAL
When new company is setting their corporate strategy,
they analyze the environment, competitors etc. Then they
determine their position (SWOT analysis) and carve
distinctive strategic position where they can outperform
rivals.

4. TYPES OF STRATEGY
STRUCTURAL
Usually it is done in two ways:
premium price or low costs.

5. TYPES OF STRATEGY
STRUCTURAL
The organization aligns its value chain accordingly,
creating manufacturing, marketing, and human
resource strategies in the process. On the basis of
these strategies, financial targets and budget
allocations are set.
Company’s strategic options are bounded by the
environment. In other words, structure shapes
strategy.

6. TYPES OF STRATEGY
Reconstructional
The reconstructionist approach is more appropriate
in certain economic and industry settings. The
first task of an organization’s leadership, is to
choose the appropriate strategic approach in light
of the challenges the organization faces.
Executives then need to make sure that their
organizations are aligned behind it to produce
sustainable performance.

7. WHAT IS THE RIGHT
STRATEGIC APPROACH
FOR YOU?
RIGHT STRATEGIC APPROACH

8. RIGHT STRATEGIC APPROACH
Factors that determines the right approach:
the structural conditions in which an
organization operates
its resources and capabilities
its strategic mind-set

9. RIGHT STRATEGIC APPROACH
When the structural conditions of an industry or
environment are attractive (or even not so much)
and you have the resources and capabilities to
carve out a viable competitive position, the
structuralist approach is likely to produce good
returns.

10. RIGHT STRATEGIC APPROACH
But when conditions are unfavorable and they are
going to work against you whatever your resources
and capabilities might be, organization should
adapt a reconstructionist approach and build a
strategy that will reshape industry boundaries

11. THE THREE STRATEGY
PROPOSITIONS
RIGHT STRATEGIC APPROACH

12. Whichever approach is chosen, a strategy’s success
hinges on the development and alignment of three
propositions:
value proposition that attracts buyers
profit proposition that enables the company to
make money out of the value proposition
people proposition that motivates those
working for or with the company to execute
the strategy
RIGHT STRATEGIC APPROACH

13. With an increasing number of businesses,
governments, and nonprofits facing unattractive
environmental and structural conditions, leaders
can no longer afford to follow the common practice
of letting structure drive strategy in all situations.
RIGHT STRATEGIC APPROACH

14. Thank you for checking this presentation, hope you liked it!
For full text and examples of usage of both strategies check
our blog: breakthroughideas.wordpress.com
materials from: https://hbr.org/2009/09/how-strategy-shapes-structure