What is strategy?
Strategy is about key issues for the future of organisatonss
The long term of strategies are typically measured over yearss The importance of a long-term
perspectve on strategy is emphasized by the ‘three-horizons’ frameworks
The three-horizons framework suggests organisatons should think of themselves as
comprising three types of business actvitys
Horizon 1) business are basically the current core actvites se(tend and defend core
business)
Horizon 2) are emerging actvites that should provide new sources of proft sbuild emerging
business)
Horizon 3) possibilitess for which nothing is sures These are risky research and development
projects and start-up ventures screate viable optons)s
Levels of strategy
Corporate- level strategy: : is concerned with the overall scope of an organisaton and
how value is added to the consttuent business of the organisatonal wholes
Corporate level strategy issues include geographic scopes diversity of products or
servicess acquisitons of new business and how resources are allocated between the
diferent elements of the organisatons
Business level strategy: is about how the individual business should compete in their
partcular markets salso called ‘compettve strategy’)s It concerns about issues as
innovatons appropriate scale and response to compettorss
Operatonal strategies: are concerned with how the components of an organisaton
deliver efectvely the corporate- and business-level strategies in terms of resourcess
processes and peoples
Strategy statements: should have the main themes:
Missions This relates to goals and refers to the overriding purpose of the
organisatons What business are we in?
Visions This too relates to goalss and refers to the desired future state of the
organisatons What do we want to achieve?
Objectvess These are more precise and ideally quantfable statements of the
organizaton’s goals over some period of tmes What do we have to achieve in the
coming period?
Scopes An organizaton’s scope or domain refers to three dimensions: customers or
clients; geographical locaton; and e(tent of internal actvites svertcal integraton)s
Advantages This part of strategy statement describes how the organisaton will
achieve the objectves it has set for itself in its chosen domains
PESTEL framework:
categories environmental factors into key types: politcals economics socials technologicals
ecological and legals This range of factors underlines that the environment is not just about
economic forces: there is an important non-market environments Organisatons needs to
consider both market and non-market aspects of strategys Macro- environments
, Industries and sectors
An industry is a group of frms producing products and services that are essentally
the sames
A market is a group of customers for specifc products or services that are essentally
the sames
Porter’s Five Forces framework:
helps identfy the atractveness of an industry in terms of fve compettve forces: s1) threat
of entrys s2) threat of substtutess s3) power of buyerss s4) power of suppliers and s5) e(tent
of rivalry between compettorss
Compettve rivalry: are organisatons with similar products and services aimed at the
same customer group snot substtutes)s
Threat of entrys Barriers to entry are the factors that need to be overcome by new
entrants if they are to compete in an industrys
Threat of substtutes: are products or services that ofer a similar beneft to an
industry’s products or servicess but have a diferent natures
The power of buyers: are the organisatons immediate customerss not necessarily the
ultmate consumerss
The power of suppliers: are those who supply the organisatons with what it needs to
produce the product or services
The industry life cycle:
Blue oceans
Are new market spaces where competton is minimiseds Blue oceans contrast with red
oceanss where industries are already well defned and rivalry is intenses The blue ocean
concept is thus useful for identfying potental spaces in the environment with litle
compettons
Strategy is about key issues for the future of organisatonss
The long term of strategies are typically measured over yearss The importance of a long-term
perspectve on strategy is emphasized by the ‘three-horizons’ frameworks
The three-horizons framework suggests organisatons should think of themselves as
comprising three types of business actvitys
Horizon 1) business are basically the current core actvites se(tend and defend core
business)
Horizon 2) are emerging actvites that should provide new sources of proft sbuild emerging
business)
Horizon 3) possibilitess for which nothing is sures These are risky research and development
projects and start-up ventures screate viable optons)s
Levels of strategy
Corporate- level strategy: : is concerned with the overall scope of an organisaton and
how value is added to the consttuent business of the organisatonal wholes
Corporate level strategy issues include geographic scopes diversity of products or
servicess acquisitons of new business and how resources are allocated between the
diferent elements of the organisatons
Business level strategy: is about how the individual business should compete in their
partcular markets salso called ‘compettve strategy’)s It concerns about issues as
innovatons appropriate scale and response to compettorss
Operatonal strategies: are concerned with how the components of an organisaton
deliver efectvely the corporate- and business-level strategies in terms of resourcess
processes and peoples
Strategy statements: should have the main themes:
Missions This relates to goals and refers to the overriding purpose of the
organisatons What business are we in?
Visions This too relates to goalss and refers to the desired future state of the
organisatons What do we want to achieve?
Objectvess These are more precise and ideally quantfable statements of the
organizaton’s goals over some period of tmes What do we have to achieve in the
coming period?
Scopes An organizaton’s scope or domain refers to three dimensions: customers or
clients; geographical locaton; and e(tent of internal actvites svertcal integraton)s
Advantages This part of strategy statement describes how the organisaton will
achieve the objectves it has set for itself in its chosen domains
PESTEL framework:
categories environmental factors into key types: politcals economics socials technologicals
ecological and legals This range of factors underlines that the environment is not just about
economic forces: there is an important non-market environments Organisatons needs to
consider both market and non-market aspects of strategys Macro- environments
, Industries and sectors
An industry is a group of frms producing products and services that are essentally
the sames
A market is a group of customers for specifc products or services that are essentally
the sames
Porter’s Five Forces framework:
helps identfy the atractveness of an industry in terms of fve compettve forces: s1) threat
of entrys s2) threat of substtutess s3) power of buyerss s4) power of suppliers and s5) e(tent
of rivalry between compettorss
Compettve rivalry: are organisatons with similar products and services aimed at the
same customer group snot substtutes)s
Threat of entrys Barriers to entry are the factors that need to be overcome by new
entrants if they are to compete in an industrys
Threat of substtutes: are products or services that ofer a similar beneft to an
industry’s products or servicess but have a diferent natures
The power of buyers: are the organisatons immediate customerss not necessarily the
ultmate consumerss
The power of suppliers: are those who supply the organisatons with what it needs to
produce the product or services
The industry life cycle:
Blue oceans
Are new market spaces where competton is minimiseds Blue oceans contrast with red
oceanss where industries are already well defned and rivalry is intenses The blue ocean
concept is thus useful for identfying potental spaces in the environment with litle
compettons
