1. The Strategy Process Flashcards
What is strategy?
The direction and scope of an organisation over the long term, including the resources required to achieve a specific objective
What is a strategic plan?
A statement of long term goals along with a definition of the strategies and policies which will ensure achievement of these goals
What are the 3 different led approaches to strategy setting?
- Accounting led
- Market let
- Competence led
What are Johnson and Scholes 5 characteristics of strategic decisions?
- Long term direction
- Scope consideration
- Strategic fit
- Resources and competencies
- Influence of stakeholders
What does Porter say is the essence of formulating competitive strategy?
Relating a company to it’s environment
What are the 2 difficulties of objectives for not for profit organisations?
- There may be multiple
- They can be hard to measure
What are the 3 Es of a Value for Money objective?
- Economy - minimise cost
- Efficiency - right way
- Effectiveness - right things
What are the 3 ‘levels’ of strategy?
- Corporate
- Business
- Operational
What is corporate strategy concerned with?
The overall purpose and scope of the firm and how value will be added i.e. which business/market to enter
What are the 4 main examples of corporate strategy considerations?
- Geographical presence
- Products offered
- Competing on price or quality
- Resource allocation
What is business strategy concerned with?
How to compete successfully in particular markets, in particular the activities of SBUs
What is an SBU
A strategic business unit - a part of the org for which there is a distinct external market for goods or services (e.g. different geographies or different functionalities)
What are the 2 main examples of business strategy considerations?
- Which products in which particular markets
- How to gain competitive advantage in a particular market
What is operational strategy concerned with?
Ensuring the component parts of the organisation effectively deliver the corporate and business level strategies
What are the 4 main examples of operational strategy considerations?
- HR strategy
- Marketing strategy
- IT strategy
- Daily operations strategy
What are the 8 steps in the rational model of strategic planning?
- Set mission & objectives
- Analyse the environment
- Position audit
- Corporate appraisal
- Generate strategic options
- Evaluate and choose
- Implement change management
- Review & control
How is rational planning orchestrated?
Strategic planning that is imposed from the top downwards
What are the 2 issues with rational planning?
It can lack flexibility and be bureaucratic
What are the 5 use conditions for rational planning?
- Large organisations
- Stable environments
- Clear sense of direction
- Long lead times
- Experienced staff at the top and less experience lower level staff
What is logical incrementalism?
Guiding actions and events towards a conscious strategy in small scale steps - extending existing strategy, not coming up with a new one
What are the 2 use conditions for logical incrementalism?
- Clear end goal
- Unsure best way to get there
What is freewheeling opportunism?
Taking opportunities as they are, with little formal planning
What type of organisation is best suited to freewheeling opportunism?
Small organisations
What are emergent strategies?
Strategies which emerge over time as organisations innovate and respond to their market
What are Mintzberg’s 5 roles of senior management under emergent strategies?
- Manage stability
- Detect discontinuity (environmental scanning)
- Know the business
- Manage patterns
- Reconcile change and continuity
What are the 4 use conditions for emergent strategy?
- Good business knowledge
- Trusting culture
- Freedom to fail
- Time money and resources to explore and develop ideas
What are Johnson and Scholes 3 elements of strategic management?
- Choice
- Implementation (+ control)
- Analysis
What is the organisational ecosystem?
The concept that a business ecosystem is an economic community supported by a foundation of interacting organisations and individuals, who evolve together over time and align themselves to one direction. All members are strongly influenced by one another.
