Equity #32 - Your Strategy Needs a Strategy

Question 1

Name the 4 Appropriate Corporate Strategy Formulation Styles vs. Business Environment

Answer 1

Strategy Style - Business Environment:

1. Adaptive - less predictable, less malleable
2. Shaping - less predictable, more malleable
3. Classical - more predictable, less malleable
4. Visionary - more predictable, more malleable

Question 2

Regarding Strategy Formulation Style, name the two business environment dimensions on which to evaluate an industry

Answer 2

1. Predictability
2. Malleability (mutability)

Question 3

Predictability (def)

Answer 3

Predictability - how accurately and how far into the future a company can forecast factors such as:

• Industry demand
• Corporate performance
• Market expectations

Question 4

Malleability (def)

Answer 4

Malleability - the extent to which a company and its competitors can influence industry factors, which are:

1. Industry demand
2. Corporate performance
3. Market expectations

Question 5

Qualities of Classical Strategy Formulation Style

Answer 5

Seek to optimize efficiencies by:

• Achieving the most favorable market position based on a company’s unique abilities,qualities and resources.
• Generating long-term forecasts through methodical planning using quanitative prediction tools.
• NOTE: Porter’s 5 Forces analysis is based on

Question 6

Qualities of Adaptive Strategy Formulation Style

Answer 6

Seek to react quickly to change by:

• Constantly refining long-term goals.
• Quickly redistributing or acquiring resources.
• Maximizing flexibilty over efficiency.
• Short-term, continuous planning based on hypotheses.
• Tightly coupling strategies to operational processes to minimize information loss.

Question 7

Qualities of Shaping Strategy Formulation Style

Answer 7

Seek to influence the business environment to further a company’s interests by:

• Building a network of committed customers, suppliers and partners.
• Defining new markets, technologies, and business practices.
• Promoting its interests through marketing, lobbying and strategic partnerships.

Question 8

Qualities of Visionary Strategy Formulation Style

Answer 8

Seek to alter the business environment by:

• Using a “build it and they will come” approach.
• Having adequate resources to commit.
• Staying focused on the long-term goal rather than constantly changing strategy.

Question 9

Examples of Classical (more predictable, less malleable) industries

Answer 9

• oil companies
• household products
• tobacco

Question 10

Examples of Adaptive (less predictable, less malleable) industries

Answer 10

• specialty retail, fashion
• office electronics
• construction materials

Question 11

Examples of Shaping (less predictable, more malleable) industries

Answer 11

• internet software and services (social media)
• construction and emgineering
• healthcare technology

Question 12

Examples of Visionary (more predictable, more malleable) industries

Answer 12

• food products
• gas utilities
• aerospace and defense
• satellite radio companies

Question 13

Qualities of Survival Strategy Formulation Style

Answer 13

Seek to survive until business environment improves by:

• shoring up capital
• cutting expenses
• restructuring

​to then transition to a suitable longer-term strategy.

Question 14

List various pitfalls in strategy formulation

Answer 14

• assuming business environment is fairly predictable
• ignoring one’s ability to change the business environment
• relying on predefined timetables
• having a corp culture/strategy style mismatch
• relying on a single style within a multi-dimensional company
• not evolving style to changes in industry life cycle