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What is strategy?
Module Objectives
Overview
Session 1 (10 Oct)
Juha Uotila
Juha Uotila
Juha Uotila
Session 5 (7 Nov)
Hossam Zeitoun
Hossam Zeitoun
Hossam Zeitoun
Hossam Zeitoun
Assessment
Individual write-up of up to 2000 words (12 CATS) or
2500 words (15 CATS) (100% of module mark)
Title page, list of references, tables and figures are
not included in the word count
The word limit is strict and any text exceeding it will
be ignored in marking
Deadline: Thursday 15 January, 12pm (noon)
Individual Assignment
Readings
What is Strategy?
Strategy includes
Long-term goals (where the firm wants to be)
Means to achieve those goals (how the firm can get there)
Strategy is
Levels of Strategy
Corporate strategy
Where to compete?
What is the scope of the
organisation?
What industries and markets
does the company compete in?
Business strategy
How to compete?
Business-level competitive
strategy
How does the company
compete in the markets and
industries it is in?
De Wit & Meyer 2010, p. 9
Warwick Business School
Strategic Fit
trends etc.)
the firms internal environment (resources and capabilities of the firm)
Positive
Negative
Internal
Strengths
Weaknesses
External
Opportunities
Threats
Your Strategy?
ambitions
Analyse the characteristics of and
possible future changes in your
career environment
Note your personal strengths and
weaknesses and how they influence
your career strategy
Delineate the ways in which you
intend to achieve your goals
Warwick Business School
Strategy Analysis
Strategic problems are typically complex and often
ill-defined
The frameworks of strategic analysis are not
algorithms that yield optimal solutions to problems;
rather, they offer support for our decision-making by:
=>
2.
3.
Cost of inputs
- raw material
- wages
- interest
- taxes
-
Value captured
1.
Price
Value created
According to the
shareholder value
perspective, the purpose of
the business firm is to
Value of output
to customer
(institutional investors)
Primacy of shareholder value
2000 Corporate scandals and other apparent failures of shareholder-focused
management
Developments in stakeholder theory have started to challenge the shareholder
view
Warwick Business School
Stakeholder Theory
Stakeholders
Employees
Governments, trade
unions, communities,
alliance partners
Raw material,
The Firm
Suppliers
Money,
relationships,
Shareholders
Value, quality,
Revenue,
relationships,
Creditors
Customers
Growth
Market share
Survival
Financial Objectives
- Sales growth
- Cash flow
- Profitability
-
Customer Objectives
- On-time delivery
- Perceived quality
- Customer retention
-
Internal Objectives
- Productivity
- Reduction of defects
- Technological capability
-
(Kaplan and
Norton 1992)
organisational members
LEGO History
Changes in 1995
Addressing threat of electronic toys
Expanding brand (films, clothing, games)
Decentralisation of management
But what happened was, those who dont like to build said, I
still have to build it so Id much rather buy a blow-moulded
[toy] from Hasbro,? And those millions of consumers who
appreciated what Lego was about said, This is not the real
Lego, this is not challenging enough for me.
- Mads Nipper, Executive Vice President (cited in McLean, 2009)
http://www.youtube.com/
watch?v=uWkZ51yxvis
Distinctive capabilities
Innovation strategy
Scope of product offering
Diversification
Internationalisation
Strategy Statements
Long-term, high-level
strategic goals and direction
Assessment of capabilities
and customer value creation
Perspectives on Strategy
http://www.youtube.com/
watch?v=ibrxIP0H84M
Experience Curve
Cost
400
200
100
Cumulative output
(million units)
Intended
strategy
Deliberate strategy
Unrealised strategy
Realised
strategy
Emergent strategy
Summary
Strategy includes both long-term objectives and the
means to achieve those objectives
Strategy can be examined on several different levels
and from several different perspectives
Strategy provides (and describes) a direction for the
organisation
Strategy is influenced by both the organisations
external environment and its internal resources and
capabilities
years?
What could or should airlines do about it?
Thank You!
In real life, strategy is actually very straightforward. You
pick a general direction and implement like hell.
- Jack Welch, Former CEO of General Electric
Getting the right people in the right jobs is a lot more important than
developing a strategy
- Jack Welch
Warwick Business School
References
Angwin, D., Cummings, S., & Smith, C. 2011. The Strategy Pathfinder (2nd edition). Oxford: Wiley/Blackwell.
De Wit, B., & Meyer, R. 2010. Strategy Synthesis: Resolving Strategy Paradoxes to Create Competitive
Advantage (3rd edition). London: Cengage .
Grant, R. 2013. Contemporary Strategy Analysis (8th edition). John Wiley & Sons.
Jensen, M. C., & Meckling, W. H. 1976. Theory of the firm: Managerial behavior, agency costs and
ownership structure, Journal of Financial Economics, 3(4): 305-360.
Johnson, G., Whittington, R., & Scholes, K. 2011. Exploring Strategy (9th edition). Pearson Education Ltd.
Kaplan, R. S., & Norton, D. P. 1992. The Balanced Scorecard Measures That Drive Performance. Harvard
Business Review, 70(1): 7179.
McLean, C. 2009. Lego: play it again. The Telegraph 17 Dec 2009. URL:
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/6825911/Lego-play-it-again.html
Mintzberg, H., Ahlstrand, B., & Lampel, J. 2009. Strategy Safari. Your Complete Guide Through the Wilds of
Strategic Management (2nd edition). Prentice Hall.
Mintzberg, H., & Waters, J. A. 1985. Of Strategies, Deliberate and Emergent. Strategic Management
Journal, 6: 257272.