International Strategy
Chapter 1: Introducing strategy
Defining strategy
= Strategy is the long-term direction of an organisation!
Change of organizational structure example:
Bpost is seeing that not a lot of people send letters, so they decided to focus more on
sending parcels/packages and less on letters. They had 2 focuses in the past, but now
merged their parcel and letter services together.
Long-term aspect of strategy:
A way to look at and understand the long term
aspect of strategy is by using the 3 horizon
framework
= It offers a way to concurrently manage both
current and future opportunities for growth.
(& how to stay relevant)
Horizon 1: focus 70% of activities on it
H2: 20%
H3: 10%
Ex: Uber, used to focus on their app and how to get people from point A to B, but were also
looking ahead towards other emerging business and thought how they could for example
also transport food. They are also looking at the future in how they can incorporate flying
cars for example.
Defining strategy: Strategic direction
• Set direction of strategy according to long-term objectives
• All the activities must be in line with the direction that is set out
Example: Fluvius’ vision statement is becoming the number one Flemish multi-utility
company. They are now looking at extending their activities such as providing internet via
partnerships.
1
,Defining strategy: organisation
• Strategy is important for all types of organisations (start-up, multinational, non-profit…)
• Not treated as discrete, unified entities
o Involve complex relationships, both internally and externally
o Many internal and external stakeholders
WHY needed? : It’is important to keep stakeholders in mind and need to make clear that
they have a certain purpose.
The purpose of strategy – mission, vision, values & objectives
What is Strategy for?
• To define and express the purpose of an organization to stakeholders.
• 4 ways to define an organisation’s purpose:
o Mission Statement = Why do we exist
o Vision Statement = Future image
o Statement of Corporate Values = Guidance
o Statement of Objectives: SMART
The exploring strategy model / framework
Strategic position
Impact of:
• The external environment
• The organisation’s strategic capability/internal environment
(resources & competences)
• The organisation’s stakeholders
• The organisation’s culture
Strategic choices
• Options for strategy
o The directions in which strategy might move
o The methods by which strategy might be pursued
• How should individual business units compete?
• Which businesses to include in the portfolio?
• Where should the organisation compete internationally
• Is the organisation innovating appropriately? Group assignment
• Should the organisation buy other companies, form alliances or
go it alone?
2
,Strategy in action
How strategies are formed and how they are implemented.
Emphasis on practicalities of managing
• Which strategies are suitable, acceptable and feasible?
• What kind of strategy-making process is needed?
• What are the required organisation structures and systems?
• How should the organisation manage necessary changes?
• Who should do what in the strategy process? Which people and
what activities?
Strategic Business Units & Product-market matrix
= It’s looking at the strategic choices, linked to the exploring strategy framework.
• SBU = Strategic business unit
= A part of a corporation grouped around a particular
activity, product group or technology
Each business unit will define its own strategy
By defining the fictional strategies, how they’re going to
take action to work in the direction of bus-level strategy and corporate-level strategy.
Ex: a small company (bakery,night shop) = 1SBU
Bigger organization: Mars = multiple BU Mars Chocolate (ex. Snickers) , Mars Food (ex.
Miracoli) , Mars Petcare (ex. Whiskers)
• Each SBU has responsibility for its own business strategy and profit performance
• Goal of SBUs
o To decentralise initiative to smaller units within the corporation so SBUs can pursue
their own distinct strategy
o To allow large corporations to vary their business strategies according to the
different needs of external markets
o To encourage accountability – each SBU can be held responsible for the success or
failure of its own strategy.
How to identify SBUs in a company?
o Market-based criteria
§ Same customer types
§ Same channels
§ Similar competitors
o Capabilities-based criteria
3
, There is no one way to define BUs, because organizations
such adjust the Bus according to changes.
• How to identify SBUs in a company?
o Start from a product(services)/market matrix and take
product/market combinations that belong together,
together as one SBU
Doing strategy differently
• The exploring strategy model can be applied in many contexts
• In each context the balance of strategic issues differs:
Changing management paradigms due to a changing world
20th century – Scale and scope 21st Century – Speed and fluidity
4
Chapter 1: Introducing strategy
Defining strategy
= Strategy is the long-term direction of an organisation!
Change of organizational structure example:
Bpost is seeing that not a lot of people send letters, so they decided to focus more on
sending parcels/packages and less on letters. They had 2 focuses in the past, but now
merged their parcel and letter services together.
Long-term aspect of strategy:
A way to look at and understand the long term
aspect of strategy is by using the 3 horizon
framework
= It offers a way to concurrently manage both
current and future opportunities for growth.
(& how to stay relevant)
Horizon 1: focus 70% of activities on it
H2: 20%
H3: 10%
Ex: Uber, used to focus on their app and how to get people from point A to B, but were also
looking ahead towards other emerging business and thought how they could for example
also transport food. They are also looking at the future in how they can incorporate flying
cars for example.
Defining strategy: Strategic direction
• Set direction of strategy according to long-term objectives
• All the activities must be in line with the direction that is set out
Example: Fluvius’ vision statement is becoming the number one Flemish multi-utility
company. They are now looking at extending their activities such as providing internet via
partnerships.
1
,Defining strategy: organisation
• Strategy is important for all types of organisations (start-up, multinational, non-profit…)
• Not treated as discrete, unified entities
o Involve complex relationships, both internally and externally
o Many internal and external stakeholders
WHY needed? : It’is important to keep stakeholders in mind and need to make clear that
they have a certain purpose.
The purpose of strategy – mission, vision, values & objectives
What is Strategy for?
• To define and express the purpose of an organization to stakeholders.
• 4 ways to define an organisation’s purpose:
o Mission Statement = Why do we exist
o Vision Statement = Future image
o Statement of Corporate Values = Guidance
o Statement of Objectives: SMART
The exploring strategy model / framework
Strategic position
Impact of:
• The external environment
• The organisation’s strategic capability/internal environment
(resources & competences)
• The organisation’s stakeholders
• The organisation’s culture
Strategic choices
• Options for strategy
o The directions in which strategy might move
o The methods by which strategy might be pursued
• How should individual business units compete?
• Which businesses to include in the portfolio?
• Where should the organisation compete internationally
• Is the organisation innovating appropriately? Group assignment
• Should the organisation buy other companies, form alliances or
go it alone?
2
,Strategy in action
How strategies are formed and how they are implemented.
Emphasis on practicalities of managing
• Which strategies are suitable, acceptable and feasible?
• What kind of strategy-making process is needed?
• What are the required organisation structures and systems?
• How should the organisation manage necessary changes?
• Who should do what in the strategy process? Which people and
what activities?
Strategic Business Units & Product-market matrix
= It’s looking at the strategic choices, linked to the exploring strategy framework.
• SBU = Strategic business unit
= A part of a corporation grouped around a particular
activity, product group or technology
Each business unit will define its own strategy
By defining the fictional strategies, how they’re going to
take action to work in the direction of bus-level strategy and corporate-level strategy.
Ex: a small company (bakery,night shop) = 1SBU
Bigger organization: Mars = multiple BU Mars Chocolate (ex. Snickers) , Mars Food (ex.
Miracoli) , Mars Petcare (ex. Whiskers)
• Each SBU has responsibility for its own business strategy and profit performance
• Goal of SBUs
o To decentralise initiative to smaller units within the corporation so SBUs can pursue
their own distinct strategy
o To allow large corporations to vary their business strategies according to the
different needs of external markets
o To encourage accountability – each SBU can be held responsible for the success or
failure of its own strategy.
How to identify SBUs in a company?
o Market-based criteria
§ Same customer types
§ Same channels
§ Similar competitors
o Capabilities-based criteria
3
, There is no one way to define BUs, because organizations
such adjust the Bus according to changes.
• How to identify SBUs in a company?
o Start from a product(services)/market matrix and take
product/market combinations that belong together,
together as one SBU
Doing strategy differently
• The exploring strategy model can be applied in many contexts
• In each context the balance of strategic issues differs:
Changing management paradigms due to a changing world
20th century – Scale and scope 21st Century – Speed and fluidity
4
