1.1 INTRODUCING STRATEGY AND LEADERSHIP Chandler’s approach (pg. 8) 1.3 GAINING COMPETITIVE ADVANTAGE
EVOLUTION OF STRATEGY (pg. 3 – 6) • Process made up of two chronological activities: Introduction (pg. 12 – 13)
Strategy Definition (pg. 3) 1. setting an org’s basic, long-term goals, Competitive advantage is the ability of an organisation
Decisions that have high medium to long-term impact on an implementing courses of action outperform its competitors
org’s activities, including analysis leading to the resourcing 2. allocating resources to achieve those goals. Source of competitive advantage: patent protection &
and implementation of those decisions, to create value for Rational approach provides a logical process of analysis Building Competitive Advantage on Data (pg. 12 – 13)
key stakeholders and to outperform competitors. And evaluation by providing a: Requirements for competitive advantage see. Pg. 12
‘Invisible Hand’ by Adam Smith (pg. 3) • way of talking, analysing and organising a complex set • Value-add from customer data
Self-interested behaviour self-regulated the market and was of issues • Marginal value: add from data
the core developmental and structuring impetus of modern • means of communication and legitimisation to • Data depreciation
business. stakeholders • Data non-substitutability
‘Visible Hand’ by Alfred Chandler, (pg. 3) • organising framework to analyse and plan strategy. • Product imitation
How capitalist function, administrative structure and Module 1: GSL • Use of individual customer data to improve the pro
managerial coordination are now a ‘visible hand’. • Setting the context for strategy • Speed to market
Involves the articulation of long-term goals and the
PURPOSE AND STRATEGY (pg. 13 – 14)
allocation of resources to achieve those goals. M2: Strategic analysis: external M3: Strategic analysis: internal
environment
High-growth orgs commonly use the following
Competitive Strategy by Michael Porter (pg. 3-4) environment
strategies:
Argued that a firm’s profitability was determined by an • Collect data • Assess stakeholders
• ‘Creating new markets’,
industry’s characteristics and by its position in that industry, • Remote environment analysis • Assess current performance
• ‘serving broader stakeholder needs’
and these factors determine the organisation’s overall • Industry aanalysis • Evaluate resources and
capabilities • ‘changing the rules of the game
strategy. • Market analysis
Cost Leadership Differentiation • Competitive analysis • SWOT • Purpose is the fourth central factor in high-growth
Firm aims to produce and Making a firm’s products companies
Broad
scope
• research suggests that competitive advantage beco
→
sell products at cheaper stand out from the M4: Exploring M5: Developing
price than competition competition options strategy M6: Implementation and
monitoring commoditised but high-growth companies avoid
Cost Focus Differentiation Focus • Create a culture • Consider strategic limiting themselves in this way
of innovation drivers and tactics • Design and develop the
Providing a low-cost product Catering to a niche market by
• they instead use purpose to guide strategy
Narrow
scope
implementation plan
←
to a narrower to a narrower selling unique or different • Identify stategic • Perform a risk
target market products options: analysis on strategic • Determine how to align RESHAPING THE VALUE PROPOSITION (pg. 14 – 16)
options the organisation to the plan Value proposition is the
Cost Differentiation – New products
← → – New services • Develop and • Manage change • target customer
Strategy by Mintzberg (pg. 4) – New markets
evaluate strategic • Manage projects • problem that is solved for the customer
themes • Monitor implementation
Is critical of Porter’s analysis, rejecting the deliberate and • why what is being offered is distinctly better than
• Develop strategic and performance
rigid approach to strategy. initiatives available alternatives.
Believes that strategy should be flexible, develop • Establish KPMs The Value Proposition Canvas (pg. 15 – 16)
continuously and emerge from ‘intuition and creativity’. Customer Profile
1.2 THE STRATEGY PROCESS M7: Emerging business models
THE RATIONAL APPROACH TO STRATEGY (pg. 8) • Business model change drivers
Characteristics • Strategy for emerging business models
• Top down driven
• Sequential steps STRATEGY DEVELOPMENT IN PRACTICE (pg. 10)
• Defined start and finish Despite the rational approach, activities undertaken later in
• Assumes analysis of environment & capability is the process may change the earlier steps.
, 1.4 ORGANISATIONAL CONTEXT FOR STRATEGY LEVELS OF STRATEGY (pg. 21 – 24) VISION, MISSION, VALUES AND GOALS (pg. 24 – 27)
INDUSTRY AND ORGANISATIONAL MATURITY (pg. 19 – 21) Also mentioned in module 5 (pg. 297 – 301)
Organisation size and industry life cycle
• A guiding concept that contains aspirations
• E.g. To provide access to the world’s information in on
Vision • What the organisation aspires to be.
• Summary of the desired future state.
• Reason for operating; how to achieve vision
• E.g. To organise the world’s information and make it u
accessible and useful
Mission • What the organisation actually does.
• Why do we exist?
Typical corporate structure • Focuses on the underlying or basic customer need
• Guiding principles the that direct and prioritise goals
Values • E.g. we want to work with great people, to be actively
Revenue, cash and profit at different industry life cycle • Targets and outcomes needed to meet vision and mi
• Key outcomes the organisation wants to achieve.
stages • Should aim to follow the SMART (specific, measurable
Goals
achievable, relevant, timely) criteria.
Kotter’s 7 questions for creating vision (pg. 25)
Core Business Types (pg. 22 – 24)
1. Does it convey a picture of what the future will loo
Customer Finding customers, building relationships with them and
relationship keeping them as customers. like?
business 2. Does it appeal to the long-term interests of memb
Product Coming up with new product and service ideas and employees, customers, partners and other
innovation bringing them to market. stakeholders?
business
3. Does it comprise realistic, attainable goals?
Infrastructure Building and managing facilities for high volume,
business efficient transactions, such as physical assets, systems, 4. Is it clear enough to provide guidance in decision
processes and logistics. making?
Organisational Maturity and the Capability Maturity Characteristics of the three core business types (pg. 22) 5. Is it general enough to allow individual initiatives a
Model (CMM) (pg. 20 – 21) alternative responses in light of changing condition
Orgs follow the same maturity cycle from start-up through 6. Is it easy to communicate; can it be clearly explaine
to decline five minutes?
Capabilities vary according to the organisation’s relative 7. Is it ambitious enough to force people out of
maturity and different businesses at different stages of the comfortable routines?
organisational life cycle typically have different levels of Kotter's 7 questions about what makes a good vision
maturity. highlight a misalignment between the strategy and visi
Capability Maturity Model (CMM) has evolved to become a BUSINESS MODELS (pg. 27 – 29)
useful tool in describing an org’s overall capability and A business model explains how a business works and th
Interaction costs represent the money and time expended
maturity according to five levels. economic logic behind it.
whenever people and orgs exchange goods, services, or ideas
Level Description of capability and maturity Should include two key components
• Ad hoc systems and processes
Core business types don’t map neatly to org structure but are
Level 1 - 1. All activities associated with making, designing,
Initial • Dependent on capable people coordinated within the business through core processes.
purchasing raw materials, manufacturing, and so o
EVOLUTION OF STRATEGY (pg. 3 – 6) • Process made up of two chronological activities: Introduction (pg. 12 – 13)
Strategy Definition (pg. 3) 1. setting an org’s basic, long-term goals, Competitive advantage is the ability of an organisation
Decisions that have high medium to long-term impact on an implementing courses of action outperform its competitors
org’s activities, including analysis leading to the resourcing 2. allocating resources to achieve those goals. Source of competitive advantage: patent protection &
and implementation of those decisions, to create value for Rational approach provides a logical process of analysis Building Competitive Advantage on Data (pg. 12 – 13)
key stakeholders and to outperform competitors. And evaluation by providing a: Requirements for competitive advantage see. Pg. 12
‘Invisible Hand’ by Adam Smith (pg. 3) • way of talking, analysing and organising a complex set • Value-add from customer data
Self-interested behaviour self-regulated the market and was of issues • Marginal value: add from data
the core developmental and structuring impetus of modern • means of communication and legitimisation to • Data depreciation
business. stakeholders • Data non-substitutability
‘Visible Hand’ by Alfred Chandler, (pg. 3) • organising framework to analyse and plan strategy. • Product imitation
How capitalist function, administrative structure and Module 1: GSL • Use of individual customer data to improve the pro
managerial coordination are now a ‘visible hand’. • Setting the context for strategy • Speed to market
Involves the articulation of long-term goals and the
PURPOSE AND STRATEGY (pg. 13 – 14)
allocation of resources to achieve those goals. M2: Strategic analysis: external M3: Strategic analysis: internal
environment
High-growth orgs commonly use the following
Competitive Strategy by Michael Porter (pg. 3-4) environment
strategies:
Argued that a firm’s profitability was determined by an • Collect data • Assess stakeholders
• ‘Creating new markets’,
industry’s characteristics and by its position in that industry, • Remote environment analysis • Assess current performance
• ‘serving broader stakeholder needs’
and these factors determine the organisation’s overall • Industry aanalysis • Evaluate resources and
capabilities • ‘changing the rules of the game
strategy. • Market analysis
Cost Leadership Differentiation • Competitive analysis • SWOT • Purpose is the fourth central factor in high-growth
Firm aims to produce and Making a firm’s products companies
Broad
scope
• research suggests that competitive advantage beco
→
sell products at cheaper stand out from the M4: Exploring M5: Developing
price than competition competition options strategy M6: Implementation and
monitoring commoditised but high-growth companies avoid
Cost Focus Differentiation Focus • Create a culture • Consider strategic limiting themselves in this way
of innovation drivers and tactics • Design and develop the
Providing a low-cost product Catering to a niche market by
• they instead use purpose to guide strategy
Narrow
scope
implementation plan
←
to a narrower to a narrower selling unique or different • Identify stategic • Perform a risk
target market products options: analysis on strategic • Determine how to align RESHAPING THE VALUE PROPOSITION (pg. 14 – 16)
options the organisation to the plan Value proposition is the
Cost Differentiation – New products
← → – New services • Develop and • Manage change • target customer
Strategy by Mintzberg (pg. 4) – New markets
evaluate strategic • Manage projects • problem that is solved for the customer
themes • Monitor implementation
Is critical of Porter’s analysis, rejecting the deliberate and • why what is being offered is distinctly better than
• Develop strategic and performance
rigid approach to strategy. initiatives available alternatives.
Believes that strategy should be flexible, develop • Establish KPMs The Value Proposition Canvas (pg. 15 – 16)
continuously and emerge from ‘intuition and creativity’. Customer Profile
1.2 THE STRATEGY PROCESS M7: Emerging business models
THE RATIONAL APPROACH TO STRATEGY (pg. 8) • Business model change drivers
Characteristics • Strategy for emerging business models
• Top down driven
• Sequential steps STRATEGY DEVELOPMENT IN PRACTICE (pg. 10)
• Defined start and finish Despite the rational approach, activities undertaken later in
• Assumes analysis of environment & capability is the process may change the earlier steps.
, 1.4 ORGANISATIONAL CONTEXT FOR STRATEGY LEVELS OF STRATEGY (pg. 21 – 24) VISION, MISSION, VALUES AND GOALS (pg. 24 – 27)
INDUSTRY AND ORGANISATIONAL MATURITY (pg. 19 – 21) Also mentioned in module 5 (pg. 297 – 301)
Organisation size and industry life cycle
• A guiding concept that contains aspirations
• E.g. To provide access to the world’s information in on
Vision • What the organisation aspires to be.
• Summary of the desired future state.
• Reason for operating; how to achieve vision
• E.g. To organise the world’s information and make it u
accessible and useful
Mission • What the organisation actually does.
• Why do we exist?
Typical corporate structure • Focuses on the underlying or basic customer need
• Guiding principles the that direct and prioritise goals
Values • E.g. we want to work with great people, to be actively
Revenue, cash and profit at different industry life cycle • Targets and outcomes needed to meet vision and mi
• Key outcomes the organisation wants to achieve.
stages • Should aim to follow the SMART (specific, measurable
Goals
achievable, relevant, timely) criteria.
Kotter’s 7 questions for creating vision (pg. 25)
Core Business Types (pg. 22 – 24)
1. Does it convey a picture of what the future will loo
Customer Finding customers, building relationships with them and
relationship keeping them as customers. like?
business 2. Does it appeal to the long-term interests of memb
Product Coming up with new product and service ideas and employees, customers, partners and other
innovation bringing them to market. stakeholders?
business
3. Does it comprise realistic, attainable goals?
Infrastructure Building and managing facilities for high volume,
business efficient transactions, such as physical assets, systems, 4. Is it clear enough to provide guidance in decision
processes and logistics. making?
Organisational Maturity and the Capability Maturity Characteristics of the three core business types (pg. 22) 5. Is it general enough to allow individual initiatives a
Model (CMM) (pg. 20 – 21) alternative responses in light of changing condition
Orgs follow the same maturity cycle from start-up through 6. Is it easy to communicate; can it be clearly explaine
to decline five minutes?
Capabilities vary according to the organisation’s relative 7. Is it ambitious enough to force people out of
maturity and different businesses at different stages of the comfortable routines?
organisational life cycle typically have different levels of Kotter's 7 questions about what makes a good vision
maturity. highlight a misalignment between the strategy and visi
Capability Maturity Model (CMM) has evolved to become a BUSINESS MODELS (pg. 27 – 29)
useful tool in describing an org’s overall capability and A business model explains how a business works and th
Interaction costs represent the money and time expended
maturity according to five levels. economic logic behind it.
whenever people and orgs exchange goods, services, or ideas
Level Description of capability and maturity Should include two key components
• Ad hoc systems and processes
Core business types don’t map neatly to org structure but are
Level 1 - 1. All activities associated with making, designing,
Initial • Dependent on capable people coordinated within the business through core processes.
purchasing raw materials, manufacturing, and so o
