Wk 1 - Intro Flashcards
What is Strategy
- Give purpose (positioning) and direction
- Deploy resources in the most effective way
- Coordinate decisions made by individuals
Positioning in Strategy
Where are we competing
Corporate-level Strategy
Positioning in Strategy
How are we competing?
Business level strategy
Direction in Strategy
- What do we want to become
- What do we want to achieve
- How will we get there
What are Strategic Decisions likely to be
- Complex
- Uncertain
- Operational
- Integrated, and involve change
What are strategic decisions concerned with
- The Long term
- Scope
- Advantage
- Business environment
- Capability
- Values & expectations
What is a Strategy vs a Tactic
- Strategy is the overall plan for deploying resources to establish a favorable position
- A tactic is a scheme for a specific maneuver
Characteristics of strategic decisions
- Important
- Involve a significant commitment of resources
- Not easily reversible
What makes a successful strategy
Effective implementation - relies on 3 elements
1) Long-term, simple & agreed objectives
2) Profound understanding of the competitive environment
3) Objective appraisal of resources
Define Strategy
The long-term direction of an organisation
What is a Strategy statement
should cover the goals, the scope and the capabilities of the organisation
Who works on strategies
Managers, specialist strategic planners / consultants
What is innovation
“The first commercial application or production of a new
process or product” Freeman and Soete (1997:p1)
Newness in Innovation
Innovation concerns novelty but isn’t all about newness
- concerned with bringing something to market
3 steps to innovation
- Exploration
- Exploitation
- Diffusion
3 types of exploration that lead to an invention
1) Ideas e.g. twitter
2) Scientific Discoveries e.g. penicillin
3) Tech breakthroughs e.g. Internet
Exploration: Ideas
A theoretical conception
- can be conscious e.g. brainstorming
- could be a flash of genius
- may involve crucial insight
Exploration: Scientific Discoveries
- come from advances in science
- result of systematic scientific investigation
- typically results from experimentation
Exploration: Tech Breakthrough
similar to scientific discovery
- typically involves the application of science
- usually involves creation / development/ application of tech
Exploitation in Innovation
Function of business model is to unlock latent value of an idea / invention
Invention leads to a business model:
1) Value Creation
2) Value Capture
Exploitation: Value Creation
What is the value proposition
- what is the PURPOSE of the innovation
- Who are the USERS
- What BENEFIT will users gain
Who can gain from an invention
Customers
the Innovator
Imitators
Competitors
Exploitation: Revenue Generating Mechanisms
- Outright sale
- Renting
- Leasing
- Charging by transaction
- Advertising
- Licensing
- Give the product away and charge for
product support - Freemium (basic service free, advanced
features cost)
Rate of Diffusion
it is a function of:
- Relative advantage over existing products
- Compatibility with existing values and practices
- Simplicity and ease of use
- Trialability
- Observable results
What is Diffusion in Innovation
Explains how innovations are adopted by a population of potential users
Players in the diffusion process
- Innovators: few / idealistic / visionary
- Early adopters: competitive, trend setters
- Early majority: pragmatists / risk averse /
seek rapid payback - Late Majority: conservative pragmatists / hate
risk - Laggards: Hold out to bitter end
