IB Lecture 10 Strategy Lecture 1: Defining the Subject

Question 1

Distinction between plans and patterns?

Answer 1

• Is a distinction between intentions vs what happens in reality
• Is a distinction between looking ahead and looking backward

Question 2

Emergent strategy is unplanned and spontaneous. It can occur due to

Answer 2

–internal reasons: learning, mistakes, spontaneous new ideas etc
–external reasons: products become popular in unexpected markets, technological breakthroughs etc

Question 3

Realized strategy is what really happened

Answer 3

(the planned plus the emergent parts)

Question 4

MINTZBERG’S TYPOLOGY OF STRATEGIES

Answer 4

“Most strategies –and the interesting strategies –tend to emerge, as people solve little problems and learn things.”

Question 5

4Ps

Answer 5

Plan (intended),
Pattern (realized),
Position (firms occupy a position in their industry doe to generic strategies),
Perspective (identity, what does the company here to do? What is its mission?)

Question 6

strategic management

Answer 6

formulating strategy, implementing strategy

Question 7

Questions to ask to learn about strategy

Answer 7

Well where is it located? What is it selling, to which customers? Is it a cheap or high-quality product?

This tells you about the pattern of decisions
This tells you about the position of the firm

Would the owner be happy with 2% growth in sales? Would the owner like to have more innovative products?

•This tells you about plans

Would the owner be happy to sacrifice quality or abandon customers to make more profit?

•This tells you about perspective

Question 8

Process

Answer 8

What strategic actions is the organization going to perform?

• e.g. high turnover or high profit?

Question 9

School of thought

Answer 9

• group of researchers/writers/consultants
• building on each other’s work
• that have a similar way of defining strategy

Question 10

Descriptive Schools

Answer 10

• Descriptive theory is theory that tries to describe, explain and predict things.
• Descriptive theory can be tested or falsified
• These descriptive schools have one key explanation for how strategy ‘happens’ in real life

Question 11

Prescriptive Schools

Answer 11

• Prescriptive theory is theory that says how things should be done (not how they are actually done)
• Prescriptive theory can be applied or ‘put into practice’
• These schools center around one key prescription for how to create a successful strategy

Question 12

Prescriptive schools (as opposed to descriptive)

Answer 12

• Design
• Planning
• Positioning

Question 13

Design School

Answer 13

If you follow the design school : •The ‘type’ of strategy that results from this is uniquefor the firm (not generic)•Main contribution: strategy as fitbetween organization and environment•SWOT analysis integral part of this school

Question 14

Planning School

Answer 14

• mostly applicable to very large firms
• a lot of attention to process: controlled, conscious, formal

Critique:

• risk averse
• hardly addresses implementation because of its focus on planning

Question 15

Positioning school

Answer 15

Strategy entails a choice for a position in the industry and choosing a generic strategy

Premises:
•In terms of the dimensions of strategic management: focus on context
•Industry is characterized by competitive forces•Strength of forces -> determines performance of businesses in that industry
•So where do you want to compete?