Strategy in Theory and practice Flashcards
Hierarchy of Strategy or three types of strategy
Corporate Strategy
Business Strategy
Functional Strategy
Corporate Strategy
the overall direction of the company and management of its business unit
Stability
Growth
Retrenchment
Business Strategy
Competitive and cooperative strategy
Competitive strategies
Cooperative strategies
Functional Strategy
maximizing resource productivity
Technological leadership
Technological followership
Mission Statement
Purpose/reason for organization
Promotes shared expectations
Communicates public image
Who we are; what we do; what we aspire to
Organization “fit” with environment
Theory of population ecology
Institution theory
Strategic choice perspective
Organizational learning theory
Theory of population ecology
Inertia prevents from changing
Institution theory
Change by imitating
Strategic choice perspective
They have the power to reshape
Organizational learning theory
Organization adjust defensively+ Use knowledge offensively
Environment is not static, it is dynamic.
If you do not fail to adjust, no strategic plan will save you from failure.
HERE COMES THE LEARNING ORGANIZATION
LEARNING ORGANIZATION 1
An organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights.
LEARNING ORGANIZATION 2
Learning organizations are attempting to adapt more quickly to challenging conditions.
LEARNING ORGANIZATION 3
They are usually horizontally managed, interactive organizations.
4 Chief Activities of
LEARNING ORGANIZATIONS
Systematic problem solving
New approach experimentation
Learning from experiences
Intra-organization knowledge transfer
Strategic flexibility
Demands long-term commitment to the development of critical resources
Demands firm to become a learning organization
How can we differentiate Strategic Decisions
Rare
Consequential
Directive
Rare
Typically new and unusual
Consequential
Commit substantial resources and demand commitment
Directive
Direct lesser decisions and future actions
Mintzberg’s Modes
Entrepreneurial mode
Adaptive mode
Planning mode
Logical incrementalism
Entrepreneurial mode
Focus is on opportunities, problems are secondary. Typically large, bold decisions. Dominant goal is growth
Adaptive mode
“muddling through” Reactive solutions to existing problems rather than proactive search for new opportunities
Planning mode
Systematic gathering of information, situation analysis, generation of feasible alternatives, rational selection
Logical incrementalism
An interactive process, synthesis of the other three
Mintzberg’s 5 Ps for Strategy
plan pattern position Perspective ploy
plan, strategy as plan
As a Plan, strategy needs to be developed in advance and with purpose.
In the extreme; Formulation and control but no learning
In the extreme; Pre-determined form, but no learning
plan, strategy as plan 2
But be careful; intended strategies are not always realized
pattern
With strategy as a Pattern, we learn to appreciate that what was successful in the past can lead to success in the future.
In the extreme; Learning but no pre-determined form
pattern 2
Strategy is a pattern, that is, consistency in behavior over
position
With Position, strategy is about how the organization relates to its competitive environment, and what it can do to make its products unique in the marketplace
position 2
Locating of particular products in particular markets.
M.Porter: “Strategy is the creation of a unique and valuable position”
Perspective
Perspective emphasizes the substantial influence that organizational culture and collective thinking can have on strategic decision making within a company
Perspective
The strategy looks inside the organization; to the grand vision of the enterprise
Ploy
strategy is a means of outsmarting the competition
Ploy, GAME THEORY
GAME THEORY
The analysis of strategies in competitive situations where the outcome of a participant’s choice of action depends critically on the actions of other participants.
Highly Rated Benefits (Mintzberg)
Strategy sets direction
Strategy focuses on effort
Strategy defines the organization
Strategy provides consistency
Highly Rated Benefits (Mintzberg)
Clearer sense of strategic vision
Sharper focus on strategic importance
Improved understanding of changing environment
Highly Rated Benefits (Mintzberg) 2
Clearer sense of strategic vision
Sharper focus on strategic importance
Improved understanding of changing environment
5 Elements of Good Strategy
Arenas ( Where will we be active ?)
Vehicles (How we will get there ?)
Differentiators (How will we win in the marketplace ?)
Staging (What will be our speed and sequence of moves ?)
Economic logic (How will we make money ?) (How will we obtain our resources ?)
Not Always a Formal Process
Where is the organization now? (not where do we hope it is)
If no changes are made, where will the organization be in 1,2,5 or 10 years?
What specific actions should management undertake?
What are the risks and payoffs?
The 5 Choices
This process is built on a set of five integrated choices. “These choices and the relationship between them can be understood as a reinforcing cascade, with the choices at the top of the cascade setting the context for the choices below, and the choices at the bottom influencing and refining the choices above.”
The 5 Choices 2
What is our winning aspiration? Where will we play? How will we win? What capabilities must be in place? What management systems are required?
What is our winning aspiration?
This choice refers to “the purpose of the enterprise,” the authors write.
Where will we play?
This second choice identifies specifically where the product or company will compete. (Mass market retailers (e.g., Target and Wal-Mart) or the prestige stores (e.g., Macy’s). Or in between; “masstige” product — higher-end (and higher-priced) than the traditional mass market.
How will we win?
This question must be answered with a clear value proposition and a path to competitive advantage.
What capabilities must be in place?
The task here is to define the activities and competencies that support the where-to-play and how-to-win choices.
What management systems are required?
Likewise, strategists must define the systems, structures and measures required to support the choices. (This framework can be applied at all levels of the company, including the organization level, strategic group or the single business unit. Clearly, the choices need to support each other among the different levels.
Strategic formulation
Development of long-range plans for effective management of opportunities and threats in light of corporate strengths and weaknesses
STRATEGY phases
DIAGNOSE
How to go there
VISION
feedback
Tools for DIAGNOSE
SWOT
5 Forces
PEST (or PESTLE)
How to go there?
Stakeholder Analysis To-do lists, metrics, responsibility analysis
Strategic management
Set of managerial decisions and actions that determines the long-run performance of a firm.
Strategic management includes
Environmental scanning (both external and internal : SWOT)
Strategy formulation
Strategy implementation
Evaluation and control
Strategic thinking 1
Strategic thinking is goal-directed, structured, and focused on the future in a precise way.
Strategic thinking 2
It is analytical and ambitious.
Strategic thinking 3
It concerns power and trends, as well as uncertainty and the resolution or accommodation of that uncertainty
Strategy Porter
strategy means choosing a different set of activities to deliver a unique mix of value,”
in other words, doing things differently
