Introducing Strategy and Business Unit Strategy Flashcards
Definition of Strategy (3 statements)
A careful plan or method for achieving a particular goal, usually over a long period of time.
The determination of the long-run goals and objectives of an enterprise, the adoption of courses of action, and the allocation of resources necessary for carrying out these goals.
Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value – Michael Porter
What are strategic decisions about? (6 statements)
- Long-term direction of a company
- The scope of the organization’s activities
- Getting advantages over competitors
- Addressing changes in the business environment
- Building on resources and competences
- Values and expectations of stakeholders
What are strategies likely to be? (5 statements)
- Be complex in nature
- Affect operational decisions
- Require an integrated approach (inside and outside of
organization) - Involve considerable change
- Be made in situations of uncertainty
Strategic statements (3 remarks)
- Fundamental goals that the organisation seeks, reflect stated
mission, vision and objectives - Scope or domain of the organisation’s activities
- Particular advantages or capabilities the strategy has to fulfill its
goals
What are the 3 levels of strategy?
- Corporate-level strategy: Concerned with overall scope of
organization and how value is added to the constituent business
units (Pyramid Head) - Business unit-level strategy: Concerned wit the way a business
seeks to compete successfully in a particular market (Pyramid
Mid-section) - Functional strategy: Concerned with how different parts of the
organization deliver the strategy in terms of managing
resources, processes and people (Pyramid Base)
What are the three steps in the Exploring-Strategy Model?
- Understand the strategic position (purpose, business
environment, capability) - Making strategic choices (Corporate, business, international,
innovation) - Managing strategy in action (organise, evaluate, practice, change)
What are strategic lenses, and what are their 4 approaches?
Strategy lenses are ways of looking at strategy issues differently in order to generate additional insight.
- Design: a rational, objective approach by having strategists design
strategies in advance. Little attention to cultural, political or
unpredictable aspects of strategy. - Experience: Influencing strategy by the experience of managers.
The strategy is likely to build on and continue what came before. - Variety: A variety of initiatives shape the strategy. New ideas
bubble up from unpredictable sources, not just the top.
Encourages diversity. - Discourse: A dialogue among managers to determine what aligns
most with what the managers want, thus influencing decisions.
Explain the market based view and the resource based view.
Market-based view:
Outside-in perspective. Explains difference in performance between firms (how well do they deal with external market forces).
Raises questions as to how we can evaluate environmental forces and how to mitigate them/influence them in our favour.
Resource-based view:
Inside-out perspective. Explains difference in performance between firms with differences in the resources owned and employed by firms. Raises questions as to what resources are relevant and how can accumulate them.
Explain SWOT in detail.
Internal view of a firm:
Strengths and Weaknesses (S&W): Characteristics of a firm that are exceptionally good / that prohibit your company from performing well in relation to competitors.
External view of a firm:
Opportunity and Threat (O&T): Trends, forces or events outside of the firm that the firm can potentially capitalize on / that present a risk to the firms performance.
Potential issues with SWOT:
- No priorisation
- Subjective
- Potentially unsystematic and superficial (bias and unsupported
opinions)
- Unclear results
Whats the TOWS matrix?
A matrix to generate strategic options based on SWOT analysis.
Internal Factors on top External Factors on the left
