Chapter 1 - Introducing Strategy Flashcards
What is the linguistic meaning of strategy?
Old greek.
Stratos: “army spread out over the ground”
Agein: “to lead”
What is strategy?
The long-term direction of an organization, formed by choices and actions about its resources and scope, in order to create advantageous positions relative to competitors and peers in changing environmental and stakeholder contexts.
Explain the three-horizons framework.
A framework that suggests that businesses and activities should be thought of in terms of different horizons defined by time.
What is the point with the three-horizons framework?
To understand the importance of not getting stuck in the first time horizon; focusing on how to extend and defend the core businesses, but also considering the second horizon; emerging businesses and the third; to create viable strategic options to consider.
What is a mission statement?
A statement that aims to provide employees and stakeholders with clarity about what the organisation is fundamentally there to do.
What is a vision statement concerned with?
The future the organization seeks to create.
Define the statement of corporate values?
Communication of the underlying and enduring core principles that guide an organization’s strategy and define the way that the organization should operate.
Define the word objectives.
Statements of specific outcomes that are to be achieved.
What should a strategy statement contain?
Three themes: the fundamental goals the organization pursues, the scope of activities, and the particular advantages or capabilities it has to deliver all of these.
These three aspects should be written down in less than 35 words.
On which dimensions do you measure organizational scope?
- Customers & clients
- Geographical location
- Vertical integration
What are the three different levels of strategy?
- Corporate level strategy
- Business-level strategy
- Functional strategies
Define the scope of the corporate-level strategy.
Concerned with the overall scope of an organization as a whole.
What are corporate-level strategic issues?
Geographical scope
Diversity of products or services
Acquisitions of new businesses
How resources are allocated between the different elements of the organization.
Define the scope of the business-level strategy.
Often called competitive strategy.
Concerns how individual businesses should compete in their particular markets.
What are business-level strategic issues?
Innovation
Appropriate scale
Responses to competitors’ moves.
Define the scope of the functional strategy level.
Concerned with how the components of an organization deliver effectively the corporate- and business-level strategies in terms of resources, processes, and people.
Define strategic position.
The strategic position is concerned with the impact on the strategy of the external environment, the organization’s strategic resources and capabilities, the organisations goals, and the organization’s culture.
List the issues related to the strategic position
Strategic purpose
Macro-environment
Industry and sector
Resources and capabilities
Stakeholders and governance
History and culture
What does strategic purpose include?
Vision, mission, values and objectives.
What does PESTEL stand for?
P olitical E conomic S ocial T echnological L egal
Why is the PESTEL useful?
It describes the macro-environment, which poses business threats or opportunities.
Best used in a dynamic manner by first analyzing the current situation and then how the circumstances might change in the future.
What methods are good for pursuing macro-environmental analysis?
PESTEL
Forecasting
Scenario cube
What methods are good for pursuing industry analysis?
Porter’s five forces
Industry life cycle
Strategic groups
Strategic canvas
What are the key frameworks for analyzing the resources and capabilities of an organization?
VRIO
Value chain
Activity systems
SWOT
What are important stakeholders and governance issues?
Corporate governance
Corporate social responsibility and ethics
What are important frameworks related to stakeholders and governance methods?
Stakeholder mapping (Power/attention matrix)
Chain of corporate governance
What are key historic and cultural aspects of strategy?
The concept of strategic drift
Recognizing different layers of culture, a cultural web analysis
Culture fit to strategy
What are strategic choices?
The options for strategy in terms of both the directions in which strategy might move and the methods by which strategy might be pursued.
List areas related to strategic choices
Business strategy and models
Corporate strategy and diversification
International strategy
Entrepreneurship and innovation
Mergers, acquisitions and alliances
Define strategy in action
How strategies are formed and how they are implemented.
List examples of strategy in action
Evaluating strategies
Strategy development processes
Organizing and strategy
Leadership and strategic change
The practice of strategy
Name the six fundamental questions relating to the strategic position of an organization.
- What is the basic purpose of the organization?
- What are the macro-environmental drivers for change?
- How can the organization identify a competitive position?
- What are the organization’s distinctive capabilities?
- What are stakeholders’ expectations?
- How does culture fit strategy?
Name the five fundamental questions relating to the strategic choices of an organization.
- What business strategy and model should be used?
- Which businesses should be included in a portfolio?
- Where should the organization compete internationally?
- Is the organization innovating appropriately?
- Should the organization acquire, ally or DIY when diversifying?
Name the five fundamental questions relating to strategy-in-action.
- Are strategies suitable, acceptable, and feasible?
- What kind of strategy-making process is needed?
- What are the required organization structures and systems?
- How should the organization manage necessary changes?
- Who should do what in the strategy process?
