strategic management lecture 1

7/30/2019 Strategic Management Lecture 1

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Strategic Management

Master of Business Administration


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About the Module

Lecture Key Streams

Tutorial Practical Application

Reading Seminal Works

Assessment

Assignment

Examination


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What is Strategy?

Strategy has a long antecedentSun Tzu The Art of War

& Karl Von Clausewitz

Strategy is about achieving a competitive advantage

Meeting customer needs better than rivals

Porter (1996) competitive strategy is about being

different


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Studying Strategy

I shall proceed from the simple to the complex. But in

war more than in any other subject we must begin by

looking at the nature of the whole; for here more than

elsewhere the part and the whole must always be

thought of together.

Karl Von Clausewitz 1780-1831

Strategy without tactics is the slowest route to victory.Tactics without strategy is the noise before defeat.

Sun Tzu 544-496 B.C.


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Some Definitions.

Strategy noun: a plan of action designed to achieve a long-term or

overall aim: time to develop a coherent economic strategy; [mass

noun] shifts in marketing strategyC Soanes and A Stevenson (Eds), The Oxford Dictionary of English, Oxford University Press,

2003

Strategy is about how an organization sets about getting to where

it wants to getJ Thompson and F Martin, Strategic Management: Awareness and Change, 5th Edition,

Thomson, 2005, p.xvii

Strategy is the direction and scope of an organisation over the

long term, which achieves advantage for the organisationG Johnson and K Scholes Exploring Corporate Strategy, 6th Edition, Pearson, 2002, p10


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What is Strategy?

Markides (1999) selecting a strategic position an

organization can call its own based on:

Who should the organization target as customers?

Whatproducts or services should be offered?

How can the organization do this efficiently?


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What is Strategy?

Kay (1993)an organizations strategy is the match

between its internal capabilities and external

relationships

Internal: what the organization is capable of doing External: Its relationship with employees, customers,

shareholders, and suppliers.

The use of analytical techniques allows the firm toinfluence its position in the market


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The Matching Concept:

Strategy as Fit

InternalAnalysis

- Resources &

Capabilities

ExternalAnalysis

- Environment

MATCHING

PROCESS

Strengths, Weaknesses Opportunities, Threats

SWOT is the most misused technique by students

Avoid a long list - what is really important?

Try to match SW with OT

Should be a summary of analysis useful as a basis to judge

future options against


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What is Strategy?

The process of creating a strategy is called strategicmanagement

Strategic management consists of: strategy analysis, strategy

formulation, and strategy implementation

In reality these elements are interdependent and should notbe considered in isolation

Strategy analysis, formulation, and implementation all need tobe considered if the organization is to meet the needs of itsenvironment


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What is Strategy?

Strategy analysis is a useful starting point for crafting strategy

It includes the generaland competitive environmentfacing

the organization

It also deals with the organizations internal environment

Strategic analysis helps the organization evaluate how well itis positioned to exploit external opportunities


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What is Strategy?

Strategy formulation usually takes place at the business and

corporation level

Strategic analysis is important for strategy formulation

So too is creative insights which synthesize experiences that

exist within the organization to form a novel strategy

An organization is seldom faced with only one strategy which

means it is necessary to evaluate competing strategies


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What is Strategy?

Strategy implementation requires the organization to be

sufficiently flexible

A given strategy must be effectively communicated with

stakeholders inside and outside the organization

The organizations values are crucial in sign-posting to

individuals what the organization considers important

An organizations culture will determine how it responds to

opportunities that exist


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What is Strategy?

A vision is often associated with the founder of an

organization

It represents a desired state the organization aspires to

achieve in the future

A mission seeks to answer the fundamental question ofwhy

an organization exists

Campbell et al. (1990) make a distinction between mission

and sense of mission


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Komatsus Mission

To Encircle Caterpillar - Maru C

www.komatsu.com

Clarity of strategic intent can motivate an

organisation to achieve its goalsG Johnson & K Scholes,Exploring Corporate Strategy, 5th Ed, Pearson, 1999, p265


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The Ashridge Mission Model

Purpose

Strategy Values

BehaviourStandards

The competitive

position anddistinctivecompetence

What thecompany

believes in

The policies and behaviour patternsthat underpin the distinctive

competencies and the value system

Why the company exists


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What is Strategy?

The assumptions on which an organization has been built andthe basis on which it is run are its theory of business

It includes assumptions about markets, customers,

competitors, and its internal capabilities

Organization encounter difficulties when their theory ofbusiness no longer fit with reality

A organizations theory of business becomes obsolete when ithas achieved its objectives


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STRATEGIC DRIFT

Over time, paradigms about what works to deliver success canbecome entrenched. However reality of what is required may drift away

from organisational positionStrategic Drift

G Johnson and K Scholes Exploring Corporate Strategy, 6th Edition, Pearson, 2002, p81


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Speed of Change..

Consider the parable of the frogin hot water

Image by Maggie LLI from http://www.kiddyhouse.com/Themes/frogs


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What is Strategy?

Corporate strategyis concerned with which markets an

organization wants to compete in

Business strategydeals with how an organization will compete

in its chosen industry or market

Functional strategyoccurs according to functional lines such

as R&D, marketing and finance


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What is Strategy?

The Design Schoolseeks to match the capabilities of theorganization to the opportunities within its competitiveenvironment

This rationalist approach is exemplified by Michael Porters genericstrategies

The Learning School emphasizes deliberate and emergent strategies

A deliberate strategy is one the organization intends to pursue

An emergent strategies involves managerial learning andexperience that coalesce into a realised strategy


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What is Strategy?

A strategic management framework

Figure 1.3

A strategy must

take account ofthe organizations

stakeholders if it isto succeed


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Strategy


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What is Strategy?

Mintzberg et al

Plan

PloyPosition

PerspectivePattern

Terminology

Vision

MissionObjectives

Strategies


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H Mintzberg Five Ps for Strategy in H Mintzberg, J Lampel, J B Quinn and S

Ghoshal The Strategy Process: Concepts, Contexts, Cases, 4th Edition,

Prentice Hall, 2003, p5

Intended vs Realised Strategy


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Strategic Management

Analysis

Choice Implementation


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The Matching Concept:

Strategy as Fit

InternalAnalysis

- Resources &Capabilities

ExternalAnalysis

- Environment

MATCHING

PROCESS

Strategy as Stretch

Strategic Position


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Strategy Formulation/ Formation

Classical PerspectivesPlanning, Positioning, Design

The Strategist(s)Learning, Cognitive, Entrepreneurial

ForcesCulture, Environment, Configuration,

Power

Mintzberg et al(2008) Strategy Safari.

strategic management lecture 1

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