Chapter 1

Question 1

What is the three-horizons framework?

Answer 1

Suggests organisations should think of their businesses or activities in terms of different “horizons”, defined by time.

Horizon 1: Extend and defend core business.

Horizon 2: Build emerging businesses.

Horizon 3: Create viable options

Question 2

Organisational Purpose

Answer 2

i.e. the reason why a company exists.

Stems from internal drivers, such as the founders and subsequent organisational leaders beliefs and commitments, and external drivers such stakeholder influences.

Question 3

Vision statement

Answer 3

Vision statement is concerned with the future the organisation seeks to create.

Typically expresses an aspiration that will enthuse, gain commitment and stretch performance.

Question 4

Mission statement

Answer 4

aims to provide clarity about what the organisation is fundamentally there to do on a daily basis.

Question 5

Scope

Answer 5

An organisations scope or domain refers to three dimensions: customers or clients; geographical location; and extent of internal activities (vertical integration).

Question 6

Strategy Statements

Answer 6

Summarizes the organisations strategy:

Should have three main themes: the fundamental goals (purpose, vision, mission or objectives) that the organisation seeks; the scope or domain of the organisations activities; and the particular advantages or capabilities it has to deliver all of these.

Question 7

Define the three levels of strategy

Answer 7

(i) Corporate-level strategy is concerned with the overall scope of an organisation and how value is added to the constituent businesses of the organisational whole.

(ii) Business-level strategy is about how individual businesses (or operating units) should compete in their particular markets.

(iii) Functional-level strategies are concerned with how the components of an organisation deliver effectively the corporate and business level strategies in terms of resources, processes and people.

Question 8

Define Strategy according to the book

Answer 8

Strategy is the long-term direction of an organisation, formed by choices and actions about its resources and scope to create advantageous positions relative to competitors and peers within changing environmental and stakeholder contexts