Strategic Management
2022 – 2023
1
,Lecture 1: What is Strategy?
1 What is strategy?
We see that a strategy has many definitions:
“A plan that is intended to achieve a particular purpose.”
o (Oxford Advanced Learner's Dictionary)
“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before
defeat.”
o Sun Tzu (The Art of War)
“Strategy decides where to act; logistics brings the troops to this point; grand tactics decides the manner
of execution and the employment of the troops.”
o Antoine-Henri Jomini (The Art of War)
“Tolstoy showed [Napoleon] pretending to be the master of events over which in practice he had no
control… issuing orders of greater precision too far from the battlefield to make a difference.”
o Lawrence Friedman (Strategy)
‘..the long-term direction of an organization’
o Exploring Strategy
“Strategy can be defined as the determination of the basic long-term goals and objectives of an
enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying
out these goals.”
o Alfred D. Chandler (1962)
“Strategy consists of the unique set of strategically significant processes and the handful of simple rules
that guide them.”
o Eisenhardt and Sull (2001)
“The pattern or plan that integrates an organization’s major goals, policies, and action sequences into a
cohesive whole. A well formulated strategy helps to marshal and allocate an organization’s resources into
a unique and viable posture based on its relative internal competencies and shortcomings, anticipated
changes in the environment , and contingent moves by intelligent opponents.”
o James Quinn (1980)
“Strategy is the result of choices executives make, on where to play and how to win, to maximize long-
term value.”
o Favaro, Ragan, and Hirsh (2012)
‘Strategy is about being different. It means deliberately choosing a different set of activities to deliver a
unique mix of value’
o Porter (1996)
‘..a pattern in a stream of decisions’
o Henry Mintzberg (1979)
2
,1.1 The strategy lenses summary
1.2 Mintzberg: Strategy as an Emergent Process
Mintzberg’s Critique of Formal Strategic Planning:
o The fallacy (misvatting) of prediction
The future is unknown
Accidental discoveries and happenstances can have dramatic effects on strategic
direction
o The fallacy of detachment
impossible to divorce formulation from implementation
o The fallacy of formalization
inhibits flexibility, spontaneity, intuition and learning
Strategy evolves through autonomous action
Strategy evolves through autonomous action, a Pattern in a Stream of Decisions.
o Honda entering U.S. motorcycle market in 1960s and 70s: “…had no strategy other than the idea
of seeing if we could sell something in the United States.”
3
, 1.3 Eisenhardt: Strategy as simple rules
1.3.1 General
Criticism of design and positioning schools, using the internet space as example:
o Intense rivalry
o Instant imitation
o WTP (willingness to pay) is extremely low
o Few barriers to entry
How did companies like Yahoo! succeed?
1.3.2 Strategy
One interviewed manager defined strategy as: “I have one thousand opportunities a day; strategy is
deciding which 50 to do.” (Eisenhardt and Sull, 2001: 108)
Strategy is then the craft of knowing which fleeting opportunities to seize.
1.3.3 How? By doing 2 things
By identifying a small number of strategically significant processes
By crafting a few simple rules to guide them.
1.3.4 The rules
1.3.5 Where do the rules come from?
Own experience (i.e. successes and failures) (Yahoo!)
Imported experience of management (Akamai)
Rules exist is some implicit form (Ebay)
4
2022 – 2023
1
,Lecture 1: What is Strategy?
1 What is strategy?
We see that a strategy has many definitions:
“A plan that is intended to achieve a particular purpose.”
o (Oxford Advanced Learner's Dictionary)
“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before
defeat.”
o Sun Tzu (The Art of War)
“Strategy decides where to act; logistics brings the troops to this point; grand tactics decides the manner
of execution and the employment of the troops.”
o Antoine-Henri Jomini (The Art of War)
“Tolstoy showed [Napoleon] pretending to be the master of events over which in practice he had no
control… issuing orders of greater precision too far from the battlefield to make a difference.”
o Lawrence Friedman (Strategy)
‘..the long-term direction of an organization’
o Exploring Strategy
“Strategy can be defined as the determination of the basic long-term goals and objectives of an
enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying
out these goals.”
o Alfred D. Chandler (1962)
“Strategy consists of the unique set of strategically significant processes and the handful of simple rules
that guide them.”
o Eisenhardt and Sull (2001)
“The pattern or plan that integrates an organization’s major goals, policies, and action sequences into a
cohesive whole. A well formulated strategy helps to marshal and allocate an organization’s resources into
a unique and viable posture based on its relative internal competencies and shortcomings, anticipated
changes in the environment , and contingent moves by intelligent opponents.”
o James Quinn (1980)
“Strategy is the result of choices executives make, on where to play and how to win, to maximize long-
term value.”
o Favaro, Ragan, and Hirsh (2012)
‘Strategy is about being different. It means deliberately choosing a different set of activities to deliver a
unique mix of value’
o Porter (1996)
‘..a pattern in a stream of decisions’
o Henry Mintzberg (1979)
2
,1.1 The strategy lenses summary
1.2 Mintzberg: Strategy as an Emergent Process
Mintzberg’s Critique of Formal Strategic Planning:
o The fallacy (misvatting) of prediction
The future is unknown
Accidental discoveries and happenstances can have dramatic effects on strategic
direction
o The fallacy of detachment
impossible to divorce formulation from implementation
o The fallacy of formalization
inhibits flexibility, spontaneity, intuition and learning
Strategy evolves through autonomous action
Strategy evolves through autonomous action, a Pattern in a Stream of Decisions.
o Honda entering U.S. motorcycle market in 1960s and 70s: “…had no strategy other than the idea
of seeing if we could sell something in the United States.”
3
, 1.3 Eisenhardt: Strategy as simple rules
1.3.1 General
Criticism of design and positioning schools, using the internet space as example:
o Intense rivalry
o Instant imitation
o WTP (willingness to pay) is extremely low
o Few barriers to entry
How did companies like Yahoo! succeed?
1.3.2 Strategy
One interviewed manager defined strategy as: “I have one thousand opportunities a day; strategy is
deciding which 50 to do.” (Eisenhardt and Sull, 2001: 108)
Strategy is then the craft of knowing which fleeting opportunities to seize.
1.3.3 How? By doing 2 things
By identifying a small number of strategically significant processes
By crafting a few simple rules to guide them.
1.3.4 The rules
1.3.5 Where do the rules come from?
Own experience (i.e. successes and failures) (Yahoo!)
Imported experience of management (Akamai)
Rules exist is some implicit form (Ebay)
4
