Strategy- MN30449 Lecture notes
Competitive strategy essentials
Corporate strategy essentials
LECTURE 1
What is strategy? About making tough choices. Key decisions to make about organisations
purpose and where/how it will compete.
Mintzberg’s five Ps
Plan - A consciously intended course of action… or a guideline to deal with a situation.
Ploy- A specific manoeuvre intended to outwit an opponent or competitor.
Pattern- A pattern in a stream of decisions.
Position- A means of locating an organization in an environment.
Perspective or paradigm- An ingrained way of perceiving the world.
Future oriented definition
, ‘Strategy is the long-term direction of an organisation.’ ‘Strategy is the direction and scope
of an organisation over the long term, which achieves advantage in a changing environment
through its configuration of resources and competences with the aim of fulfilling
stakeholder expectations.’ Johnson et al. 2011
A goal-oriented definition
‘Competitive strategy is about being different.’ ‘It means deliberately choosing a different
set of activities to deliver a unique mix of value.’ Porter. 2011
(change market dynamics)
Process oriented definition
‘Strategy is the company’s formula for winning!’ ‘The company’s strategy specifies the goals
and objectives to be achieved as well as the values and missions to be pursued…it sets out
the basic direction of the company. The strategy specifically delineates the products or
services to be provided, the markets to be served, and the value to be offered to the
customer. It also specifies sources of competitive advantage and strives to provide superior
value.’ Galbraith, 2006
Does it reflect the reality of strategy?
‘A strategy is an after-the-event rationalisation by top management of what they
(often wrongly) believe their organisation has been doing’ Weick, 2001
3 Key Ideas Corporate Business Operational
Level Level Level
3 Key Ideas Mission Vision Strategic
Statements Statements Objectives
3 Key Ideas Intended Emergent Realised
Corporate vs business strategy
The distinction between corporate and business strategy corresponds to the organisational
structure of most large companies. To survive and prosper over the long term, a firm must
earn a rate of return on its capital that exceeds its cost of capital. There are two possible
ways of achieving this. 1. First, by locating within industries that offer attractive rates of
,profit (corporate strategy). 2. By establishing a competitive advantage over rivals within an
industry (competitive strategy).
Corporate; scope of the firm in terms of the industries and markets in which it competes. It
is the responsibility of corporate top management. Corporate strategy decisions include
choices over diversification, vertical integration, acquisitions, and new ventures, and the
allocation of resources between the different businesses of the firm.
Competitive (strategic business unit) strategy; how the firm competes within a particular
industry or market. Primarily the responsibility of the senior managers of divisions and
subsidiaries. If the firm is to prosper within an industry, it must establish a competitive
advantage over its rivals. Hence, this area of strategy is also referred to as competitive
strategy.
Strategy statements
Strategy has its origins in the thought processes of organisational leaders. In large
companies, strategy formulation is an explicit management process and statements of
strategy are found in board minutes and strategic planning documents, which are invariably
confidential.
However, many companies (public companies in particular) see value in communicating
their strategy to employees, customers, investors, and business partners.
Four types of statement:
- The mission statement; describes organizational purpose; it addresses “Why we
exist.”
- Statement of principles or values; outlines “What we believe in and how we will
behave.”
- Vision statement; projects “What we want to be.”
- Strategy statement; articulates the company's competitive game plan, which
typically describes objectives, business scope, and advantage.
Strategy- Organisation has a strategy
Senior managers- In reality who has the strategy. This depends on the organisations
structure and culture
Social practice- Strategizing is undertaken by people. Complex social practice, brought to
life through words
Language and discourse- No strategy without discourse
Strategy documents- Organisations strategy, identity and image are communicated through
written and visual texts.
Intended, emergent and realised strategy
Intended; A planned and purposeful strategy. Conceived of by the leader or top
management team with the intention of implementing it within the organisation. How
managers interpret strategy: Intended strategy may be less a product of rational
deliberation and more an outcome of inspiration, negotiation, bargaining, and compromise
among those involved in the strategy‐making process.
Emergent; Results from the actions and decisions of different organisational members as
they deal with the forces that impinge upon the organisation. Emerges from the complex
, processes in which individual managers interpret the intended strategy and adapt it to
changing circumstances. It’s also an unplanned and responsive strategy caused by a
strategic jolt from external or internal forces e.g. death of Jobbs would be a jolt for Apple
Realised; The actual strategy that’s implemented, only partly related to the intended
strategy. Not 100% what’s been planned, it changes with context. It’s a consequence of
intended and emergent strategy that gives you realised strategies.
STATEGIC SYNTHESIS
SWOT TO TOWS
SWOT- Strengths, weaknesses, opportunities and threats. Does your organisation fit in with
the external and internal environment?
Strengths: What does the organisation do well? What unique resources (tangible,
intangible, and human) can the organisation use to build and maintain competitive
advantage? What do the organisation’s competitors see as its core strengths?
Weaknesses: What does the organisation do poorly? What resources deficits (tangible,
intangible, and human) does the organisation suffer? What do the organisation’s
competitors see as its core weaknesses? What do the organisation’s competitors try to
attack?
Opportunities: What opportunities/trends (macro-environment/ industry/ strategic group)
impact the organisation? How can the organisation turn its core strengths into
opportunities?
Threats: What threats (macro-environment/ industry/ strategic group) impact the
organisation? What is your competition doing? What threats does the organisation’s
weaknesses expose them to in the short-medium-long term?
Typically do a SWOT once as a brainstorm and then do a second more detailed one after
other analysis.
Competitive strategy essentials
Corporate strategy essentials
LECTURE 1
What is strategy? About making tough choices. Key decisions to make about organisations
purpose and where/how it will compete.
Mintzberg’s five Ps
Plan - A consciously intended course of action… or a guideline to deal with a situation.
Ploy- A specific manoeuvre intended to outwit an opponent or competitor.
Pattern- A pattern in a stream of decisions.
Position- A means of locating an organization in an environment.
Perspective or paradigm- An ingrained way of perceiving the world.
Future oriented definition
, ‘Strategy is the long-term direction of an organisation.’ ‘Strategy is the direction and scope
of an organisation over the long term, which achieves advantage in a changing environment
through its configuration of resources and competences with the aim of fulfilling
stakeholder expectations.’ Johnson et al. 2011
A goal-oriented definition
‘Competitive strategy is about being different.’ ‘It means deliberately choosing a different
set of activities to deliver a unique mix of value.’ Porter. 2011
(change market dynamics)
Process oriented definition
‘Strategy is the company’s formula for winning!’ ‘The company’s strategy specifies the goals
and objectives to be achieved as well as the values and missions to be pursued…it sets out
the basic direction of the company. The strategy specifically delineates the products or
services to be provided, the markets to be served, and the value to be offered to the
customer. It also specifies sources of competitive advantage and strives to provide superior
value.’ Galbraith, 2006
Does it reflect the reality of strategy?
‘A strategy is an after-the-event rationalisation by top management of what they
(often wrongly) believe their organisation has been doing’ Weick, 2001
3 Key Ideas Corporate Business Operational
Level Level Level
3 Key Ideas Mission Vision Strategic
Statements Statements Objectives
3 Key Ideas Intended Emergent Realised
Corporate vs business strategy
The distinction between corporate and business strategy corresponds to the organisational
structure of most large companies. To survive and prosper over the long term, a firm must
earn a rate of return on its capital that exceeds its cost of capital. There are two possible
ways of achieving this. 1. First, by locating within industries that offer attractive rates of
,profit (corporate strategy). 2. By establishing a competitive advantage over rivals within an
industry (competitive strategy).
Corporate; scope of the firm in terms of the industries and markets in which it competes. It
is the responsibility of corporate top management. Corporate strategy decisions include
choices over diversification, vertical integration, acquisitions, and new ventures, and the
allocation of resources between the different businesses of the firm.
Competitive (strategic business unit) strategy; how the firm competes within a particular
industry or market. Primarily the responsibility of the senior managers of divisions and
subsidiaries. If the firm is to prosper within an industry, it must establish a competitive
advantage over its rivals. Hence, this area of strategy is also referred to as competitive
strategy.
Strategy statements
Strategy has its origins in the thought processes of organisational leaders. In large
companies, strategy formulation is an explicit management process and statements of
strategy are found in board minutes and strategic planning documents, which are invariably
confidential.
However, many companies (public companies in particular) see value in communicating
their strategy to employees, customers, investors, and business partners.
Four types of statement:
- The mission statement; describes organizational purpose; it addresses “Why we
exist.”
- Statement of principles or values; outlines “What we believe in and how we will
behave.”
- Vision statement; projects “What we want to be.”
- Strategy statement; articulates the company's competitive game plan, which
typically describes objectives, business scope, and advantage.
Strategy- Organisation has a strategy
Senior managers- In reality who has the strategy. This depends on the organisations
structure and culture
Social practice- Strategizing is undertaken by people. Complex social practice, brought to
life through words
Language and discourse- No strategy without discourse
Strategy documents- Organisations strategy, identity and image are communicated through
written and visual texts.
Intended, emergent and realised strategy
Intended; A planned and purposeful strategy. Conceived of by the leader or top
management team with the intention of implementing it within the organisation. How
managers interpret strategy: Intended strategy may be less a product of rational
deliberation and more an outcome of inspiration, negotiation, bargaining, and compromise
among those involved in the strategy‐making process.
Emergent; Results from the actions and decisions of different organisational members as
they deal with the forces that impinge upon the organisation. Emerges from the complex
, processes in which individual managers interpret the intended strategy and adapt it to
changing circumstances. It’s also an unplanned and responsive strategy caused by a
strategic jolt from external or internal forces e.g. death of Jobbs would be a jolt for Apple
Realised; The actual strategy that’s implemented, only partly related to the intended
strategy. Not 100% what’s been planned, it changes with context. It’s a consequence of
intended and emergent strategy that gives you realised strategies.
STATEGIC SYNTHESIS
SWOT TO TOWS
SWOT- Strengths, weaknesses, opportunities and threats. Does your organisation fit in with
the external and internal environment?
Strengths: What does the organisation do well? What unique resources (tangible,
intangible, and human) can the organisation use to build and maintain competitive
advantage? What do the organisation’s competitors see as its core strengths?
Weaknesses: What does the organisation do poorly? What resources deficits (tangible,
intangible, and human) does the organisation suffer? What do the organisation’s
competitors see as its core weaknesses? What do the organisation’s competitors try to
attack?
Opportunities: What opportunities/trends (macro-environment/ industry/ strategic group)
impact the organisation? How can the organisation turn its core strengths into
opportunities?
Threats: What threats (macro-environment/ industry/ strategic group) impact the
organisation? What is your competition doing? What threats does the organisation’s
weaknesses expose them to in the short-medium-long term?
Typically do a SWOT once as a brainstorm and then do a second more detailed one after
other analysis.
