Strategic Decision Making Session

1. 1: Introducing Strategy

2. Session 1 Session 2 Session 3 Where are we now? Where are we going? How will we get there?

5. Strategic Decision Making

6. Three horizons for strategy Figure 1.2 Three horizons for strategy Source : M. Baghai, S. Coley and D. While, The Alchemy of Growth , 2000, Texere Publishers: Figure 1.1, p. 5

8. Levels of strategy (1) Operational strategy Business-level strategy Corporate-level strategy News Corporation diversifying from print journalism into social networking. Website and marketing improvements at My Space to attract more users. MySpace engineers increasing processing Capacity. concerned with the overall purpose and scope of an organisation and how to add value to business units. concerned with the way a business seeks to compete successfully in its particular market. concerned with how different parts of the organisation deliver the strategy in terms of managing resources, processes and people.

11. The exploring strategy model Figure 1.4 The Exploring Strategy Model

12. Strategic position The Strategic Position Environment Culture Purpose Capability The strategic position is concerned with the impact on strategy of the external environment , the organisation ’ s strategic capability (resources and competences), the organisation ’ s goals and the organisation ’ s culture. Fundamental questions for Strategic Position: • What are the environmental opportunities and threats ? • What are the organisation ’ s strengths and weaknesses? • What is the basic purpose of the organisation? • How does culture shape strategy?

13. Strategic choices Strategic Choices Business- level Innovation International Corporate- level Acquisitions & Alliances Strategic choices involve the options for strategy in terms of both the directions in which strategy might move and the methods by which strategy might be pursued. Fundamental questions for Strategic Choice: • How should business units compete ? • Which businesses to include in the portfolio ? • Where should the organisation compete internationally? • Is the organisation innovating appropriately? • Should the organisation buy other companies, form alliances or go it alone ?

14. Strategy in action Strategy in Action Processes Changing Evaluating Organising Practice Strategy in action is about how strategies are formed and how they are implemented. The emphasis is on the practicalities of managing . Fundamental questions for Strategy in Action • Which strategies are suitable, acceptable and feasible? • What kind of strategy-making process is needed? • What are the required organisation structures and systems ? • How should the organisation manage necessary changes ? • Who should do what in the strategy process ?

18. A summary of strategy lenses Table C.ii A summary of the strategy lenses

20. Session I: The Strategic Position

22. The Strategic Position 2: The Environment

24. Layers of the business environment Figure 2.1 Layers of the business environment

31. Scenarios for the global financial system, 2020 Illustration 2.2

34. Source : Adapted with the permission of The Free Press, a Division of Simon & Schuster Adult Publishing Group, from Competitive Strategy: Techniques for Analyzing Industries and Competitors by Michael E. Porter. Copyright © 1980, 1998 by The Free Press. All rights reserved The five forces framework (1) Figure 2.2 The five forces framework

42. The value net Figure 2.3 The value net Reprinted by permission of Harvard Business Review . From ‘The Right Game’ by A. Brandenburger and B. Nalebuff, July–August 1996, pp. 57–64. Copyright © 1996 by the Harvard Business School Publishing Corporation. All rights reserved

43. Comparative industry structure analysis Figure 2.5 Comparative industry structure analysis

45. Cycles of competition Figure 2.6 Cycles of competition Source : Adapted with the permission of The Free Press, a Division of Simon & Schuster, Inc., from Hypercompetitive Rivalries: Competing in Highly Dynamic Environments by Richard A. D ’Aveni with Robert Gunther. Copyright © 1994, 1995 by Richard A. D’Aveni. All rights reserved

46. The industry life cycle Figure 2.4 The industry life cycle

48. Characteristics for identifying strategic groups Figure 2.7 Some characteristics for identifying strategic groups

51. Bases of market segmentation Table 2.1 Some bases of market segmentation

55. Strategy canvas Figure 2.9 Strategy canvas for electrical components companies Source : Developed from W.C. Kim and R. Mauborgne, Blue Ocean Strategy , 2005, Harvard Business School Press

57. The Strategic Position 3: Strategic Capabilities

59. Strategic capabilities: the key issues Figure 3.1 Strategic capabilities: the key issues

62. Components of strategic capabilities Table 3.1 Components of strategic capabilities

71. Criteria for the inimitability of strategic capabilities Figure 3.2 Criteria for the inimitability of strategic capabilities

73. Criteria for the inimitability of strategic capabilities Figure 3.3 VRIN

77. VRIN summary Figure 3.4 The value chain within an organisation Source : Adapted with the permission of The Free Press, a Division of Simon & Schuster, Inc., from Competitive Advantage: Creating and Sustaining Superior Performance by Michael E. Porter. Copyright © 1985, 1998 by Michael E. Porter. All rights reserved

79. The value network Figure 3.5 The value network Source : Adapted with the permission of The Free Press, a Division of Simon & Schuster, Inc., from Competitive Advantage: Creating and Sustaining Superior Performance by Michael E. Porter. Copyright © 1985, 1998 by Michael E. Porter. All rights reserved

86. The TOWS matrix Figure 3.6 The TOWS matrix

90. The Strategic Position 4: Strategic Purpose

92. Influences on strategic purpose Figure 4.1 Influences on strategic purpose

101. The governance chain Figure 4.2 The chain of corporate governance: typical reporting structures Source : Adapted from David Pitt-Watson, Hermes Fund Management

104. Different governance systems Table 4.1 Benefits and disadvantages of governance systems

107. Corporate social responsibility stances Table 4.2 Corporate social responsibility stances

108. Questions of corporate social responsibility – internal aspects (1) Table 4.3 Some questions of corporate social responsibility

109. Questions of corporate social responsibility – external aspects (2) Table 4.3 Some questions of corporate social responsibility (Continued)

112. Stakeholders of a large organisation Figure 4.3 Stakeholders of a large organisation Source : Adapted from R.E. Freeman, Strategic Management: A Stakeholder Approach , Pitman, 1984. Copyright 1984 by R. Edward Freeman.

113. Stakeholder conflicts of expectations Table 4.4 Some common conflicts of expectations

118. The Strategic Position 5: Culture and Strategy

120. Culture and strategy – key issues Figure 5.1 The influence of history and culture

129. Methods of historical analysis Chronological analysis Cyclical influence Anchor points Historical narratives

131. Cultural frames of reference Figure 5.4 Cultural frames of reference

133. Culture in four layers Figure 5.5 Culture in four layers

135. Culture ’ s influence on strategy development Figure 5.6 Culture ’s influence on strategy development Source : Adapted from P. Gringer and J.-C. Spender, Turnaround: Managerial Recipes for Strategic Success , Associated Business Press, 1979, p. 203

137. The cultural web of an organisation