Transcript Introduction to Strategy

Introduction to
Strategy
Lecture 1
Tahir Rashid
What is Strategy???
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Tahir Rashid
08/04/2015
What is Strategy
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. (J& S,
2008)
Why do some organizations
succeed while others fail?
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Strategy
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Strategic management process
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An action managers take to achieve
one or more of an organization’s goals
The process by which managers
choose a set of strategies that will
allow a company to achieve superior
performance
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Characteristics of Strategic
Decisions
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Long-term direction
Scope of an organisation’s activities
Competitive advantage
Strategic fit with business environment
Organisation resources and competences
Values and expectations of power players
Dynamic Business
environment
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Levels of Strategic
Management
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Strategic Managers
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General managers
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Functional managers
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Responsible for overall company
performance or divisional performance
Responsible for supervising a
particular task or operation
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Vocabulary of Strategy
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Mission
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Vision
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Desired future state
Goal
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Overriding purpose
General statement of aim or purpose
Objective
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Possible quantification or precise statement
of the goal- SMART
Vocabulary of Strategy
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Strategic capability
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Strategies
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Long term direction
Business model
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Resources, activities and processes
Showing the flow of product, service and
information between parties
Control
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Monitoring of actions
Vocabulary of Strategy:
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Vision/Mission
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Nokia-Connecting is about helping people feel close
to what matters. Wherever, whenever, Nokia
believes in communicating, sharing, and in the
awesome potential in connecting the 2 billion who
do with the 4 billion who don’t.
ASDA-To make goods and services more
affordable for everyone.
H& M- Our business concept is to offer fashion and
quality at the best price
Ford- To become the worlds leading consumer
company for automotive products and services
Vocabulary of Strategy:
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Goals
H&M- “Our goal is to ensure that business
is operated with the minimum use of
resources and with as little impact on the
environment as possible”
Objectives
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H&M-To increase the number of stores by
10-15% each year whilst maintaining
increased sales in the existing stores
The Exploring
Corporate Strategy Model
(J& S, 2008)
What is
Strategic Position?
Strategic position is concerned with the
impact on strategy of the external
environment, an organisation’s strategic
capability and the expectations and
influence of stakeholders.
Strategic Position
Environment
Capability
The
Strategic
Position
Culture
(J& S, 2008)
Purpose
Strategic analysis
Information is required if Strategic decisions
are to be made.
 Must determine current situation and strategy
 Must determine what change, if any, is
desirable
 Who are we? Are we well? And who are our
competitors?
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External and Internal
Analysis
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External analysis
 Identify strategic opportunities and threats
• Industry environment
• National environment
• Socioeconomic or macroenvironment
Internal analysis
 Identify organizational strengths and
weaknesses
 Sources of competitive advantage: superior
efficiency, quality, innovation, and
responsiveness to customers
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Strategic Awareness
allows for the
management of
Strategic Change
Strategic Change
Strategic Awareness
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What changes are occurring in the environment?
What are the resources and competencies available?
Who affects the organisations i.e. the stakeholders
The main aim of the analysis is to form a view of the key
influences on the present and the future
A lack of awareness can result in:
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Lost opportunities
Inability to react and respond effectively
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SWOT Analysis and the
Business Model
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Identifying strategies to align a
company’s resources and capabilities
to its environment in order to create
and sustain a competitive advantage
Functional-level strategy
 Business-level strategy
 Global strategy
 Corporate-level strategy
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What are Strategic Choices?
Strategic choices involve
understanding the underlying bases
for future strategy at both the
business unit and corporate levels
and the options for developing
strategy in terms of both the directions
and methods of development.
Strategic Choice
Choice of suitable courses of action based on
interpretation of analysis
 restatement of mission and objectives
 generation of strategic options
 evaluation and selection of strategic options
 Logical and incremental
 Entrepreneurial opportunism
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Strategic Choices
Businesslevel
Corporatelevel
Strategic
Choices
Innovation
(J& S, 2008)
International
Evaluation
What is Strategy in Action?
Strategy in action is concerned with
ensuring that strategies are working in
practice.
Strategy Implementation
After choosing strategies, managers
must put them into action.
 The feedback loop—strategy is
ongoing. Managers must monitor and
reevaluate for the next round of
strategy formulation and
implementation.
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Strategic Implementation
who is responsible?-leadership and
communication
 adaptations of systems?
 resource planning and logistics
 Structure
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Monitoring & Evaluation
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Ongoing appraisal
What has been successful?
What needs to be changed/adjusted?
Ability to be Flexible and willingness to
change
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Strategy in Action
Processes
Structuring
Strategy
in Action
Changing
(J& S, 2008)
Resourcing
Practice
The Traditional Strategic
Management Process
Evaluation
Strategic
Analysis
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Strategy
Creation
& Choice
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Strategy
Implementation
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Conclusion
A strategy is an action a company
takes to attain one or more of its goals
 Formal strategic planning models
stress that an organisations strategy
is the outcome of a rational planning
process
 Strategy can emerge from deep within
an organisation
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Conclusion
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Strategic planning often fails because
top management do not plan for
uncertainty and planners may be out
of touch with operational reality
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References
Johnson, G & Scholes, K.,
Whittington, R. (2008) Exploring
Corporate Strategy, 8th ed, Pearson
Education
 Hill C. & Jones G. (2004) Strategic
Management Theory New York
Houghton Mifflin
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