Lecture 1 - Strategy

Question 1

Strategy Definition

Answer 1

‘Strategy is the direction and scope of an organisation over the long term which achieves advantage through the configuration of its resources within a changing environment and to fulfill stakeholder advantages’ (Johnson and Scholes, 2002)

The task of business strategy, then, is to determine how the firm will deploy its resources within its environment and so satisfy its long-term goals, and how it will organize itself to implement that strategy. (Grant,2016)

Porter (strategy as an activities system) states that “Strategy is the creation of a unique and differentiated position involving a different set of activities.”3 The key is how these activities fit together to form a consistent, mutually reinforcing system

Question 2

Basic Strategy analysis model - strategy as as link between firm and environment

Answer 2

Firm - Goals, Resources Structure

Environment - Competetors, Connsumers, Suppliers

Question 3

4 Main Components of Strategy

Answer 3

1) Realisation of long-term goals
2) Understanding of the competitive landscape
3) Objective appraisal of your reasources
4) Successful implementation

Question 4

Strategic Fit

Answer 4

A subset of contingency theory (The best way to design, manage, and lead an organization depends upon circumstances—in particular the characteristics of that organization’s environment) - Looks at how consistent a strategy is within both their internal and external environment, though more focus on external consistency. (Kodak case study)

Question 5

Contingency Theory

Answer 5

The best way to design, manage, and lead an organization depends upon circumstances—in particular the characteristics of that organization’s environment

-Stragtegic fit is a subset of this

Question 6

The origins of strategy

Answer 6

The term strategy derives from the Greek word strategia, meaning “generalship.” However, the concept of strategy did not originate with the Greeks: Sun Tzu’s classic, The Art of War, from about 500 BC is regarded as the first treatise on strategy.5

Question 7

Core issues in Strategy

Answer 7

• We are not able to forsee the future
• Everything is easier in hindsight
• We may not be able to act accordingly to foresight on our own insights

Question 8

4 categories as to why a firm may want to compete

Answer 8

1. Survival
2. Profitability (Shareholders)
3. Growth
4. Give? (Stakeholders)

Question 9

3 Main questions to any strategy

Answer 9

1. Where should the firm compete?
2. How should it compete to ‘win’?
3. How will it continue to ’win’ in the long run?

Question 10

Strategic Analysis/New strategy 7 Steps

Answer 10

1. Identify the current strategy
2. Appraise Performance
3. Diagnose Performance
4. Industry Analysis
5. Analyse Resources and Capabilities
6. Formulate Strategy
7. Implement Strategy

Question 11

The History of Strategy (timeline)

Question 12

Corporate vs Business Strategy

Answer 12

Corporate strategy defines the scope of the firm in terms of the industries and markets in which it competes.

Corporate strategy decisions include choices over diversification, vertical integration, acquisitions, and new ventures, and the allocation of resources between the different businesses of the firm.