Chapter 1 - Introducing Strategy

Question 1

What is the linguistic meaning of strategy?

Answer 1

Old greek.

Stratos: “army spread out over the ground”
Agein: “to lead”

Question 2

What is strategy?

Answer 2

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.

Question 3

Explain the three-horizons framework.

Answer 3

A framework that suggests that businesses and activities should be thought of in terms of different horizons defined by time.

Question 4

What is the point with the three-horizons framework?

Answer 4

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.

Question 5

What is a mission statement?

Answer 5

A statement that aims to provide employees and stakeholders with clarity about what the organisation is fundamentally there to do.

Question 6

What is a vision statement concerned with?

Answer 6

The future the organization seeks to create.

Question 7

Define the statement of corporate values?

Answer 7

Communication of the underlying and enduring core principles that guide an organization’s strategy and define the way that the organization should operate.

Question 8

Define the word objectives.

Answer 8

Statements of specific outcomes that are to be achieved.

Question 9

What should a strategy statement contain?

Answer 9

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.

Question 10

On which dimensions do you measure organizational scope?

Answer 10

1. Customers & clients
2. Geographical location
3. Vertical integration

Question 11

What are the three different levels of strategy?

Answer 11

1. Corporate level strategy
2. Business-level strategy
3. Functional strategies

Question 12

Define the scope of the corporate-level strategy.

Answer 12

Concerned with the overall scope of an organization as a whole.

Question 13

What are corporate-level strategic issues?

Answer 13

Geographical scope

Diversity of products or services

Acquisitions of new businesses

How resources are allocated between the different elements of the organization.

Question 14

Define the scope of the business-level strategy.

Answer 14

Often called competitive strategy.

Concerns how individual businesses should compete in their particular markets.

Question 15

What are business-level strategic issues?

Answer 15

Innovation

Appropriate scale

Responses to competitors’ moves.

Question 16

Define the scope of the functional strategy level.

Answer 16

Concerned with how the components of an organization deliver effectively the corporate- and business-level strategies in terms of resources, processes, and people.

Question 17

Define strategic position.

Answer 17

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.

Question 18

List the issues related to the strategic position

Answer 18

Strategic purpose

Macro-environment

Industry and sector

Resources and capabilities

Stakeholders and governance

History and culture

Question 19

What does strategic purpose include?

Answer 19

Vision, mission, values and objectives.

Question 20

What does PESTEL stand for?

Answer 20

P olitical
E conomic
S ocial
T echnological
L egal

Question 21

Why is the PESTEL useful?

Answer 21

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.

Question 22

What methods are good for pursuing macro-environmental analysis?

Answer 22

PESTEL

Forecasting

Scenario cube

Question 23

What methods are good for pursuing industry analysis?

Answer 23

Porter’s five forces

Industry life cycle

Strategic groups

Strategic canvas

Question 24

What are the key frameworks for analyzing the resources and capabilities of an organization?

Answer 24

VRIO

Value chain

Activity systems

SWOT

Question 25

What are important stakeholders and governance issues?

Answer 25

Corporate governance

Corporate social responsibility and ethics

Question 26

What are important frameworks related to stakeholders and governance methods?

Answer 26

Stakeholder mapping (Power/attention matrix)

Chain of corporate governance

Question 27

What are key historic and cultural aspects of strategy?

Answer 27

The concept of strategic drift

Recognizing different layers of culture, a cultural web analysis

Culture fit to strategy

Question 28

What are strategic choices?

Answer 28

The options for strategy in terms of both the directions in which strategy might move and the methods by which strategy might be pursued.

Question 29

List areas related to strategic choices

Answer 29

Business strategy and models

Corporate strategy and diversification

International strategy

Entrepreneurship and innovation

Mergers, acquisitions and alliances

Question 30

Define strategy in action

Answer 30

How strategies are formed and how they are implemented.

Question 31

List examples of strategy in action

Answer 31

Evaluating strategies

Strategy development processes

Organizing and strategy

Leadership and strategic change

The practice of strategy

Question 32

Name the six fundamental questions relating to the strategic position of an organization.

Answer 32

1. What is the basic purpose of the organization?
2. What are the macro-environmental drivers for change?
3. How can the organization identify a competitive position?
4. What are the organization’s distinctive capabilities?
5. What are stakeholders’ expectations?
6. How does culture fit strategy?

Question 33

Name the five fundamental questions relating to the strategic choices of an organization.

Answer 33

1. What business strategy and model should be used?
2. Which businesses should be included in a portfolio?
3. Where should the organization compete internationally?
4. Is the organization innovating appropriately?
5. Should the organization acquire, ally or DIY when diversifying?

Question 34

Name the five fundamental questions relating to strategy-in-action.

Answer 34

1. Are strategies suitable, acceptable, and feasible?
2. What kind of strategy-making process is needed?
3. What are the required organization structures and systems?
4. How should the organization manage necessary changes?
5. Who should do what in the strategy process?