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This online background paper provides a review of some of the definitions, theories
and concepts underpinning strategy. As such it is intended to introduce the key
concepts involved, or to form an overall reminder of the various issues relating to
these areas.
1. What is strategy about and why is it so important?
‘Every company needs a strategy – either ‘The word “strategy” has become one of
explicit or implicit.’ the most common and badly used words in
Costas Markides (1995) business writing.’
Paul Fifield (1992)
‘An effective strategic management
process has become the essential norm for The twin challenges faced here in using the
businesses.’ term ‘strategy’ are as follows:
Richard Hanscombe and Philip Norman
(1993) • First, unless the user is wary of how
management terms can sometimes be
‘Effective strategic management is the abused (and thus end up as mere jargon),
ultimate aim of all managers.’ these expressions can occasionally be used
Financial Times, 1997 more to create an impression of good
management, rather than for their actual
‘The survival, growth and prosperity of any comprehended meaning.
organisation depends on the quality and • And second, there is very little agreement as
viability of the strategy the organisation is to what these sorts of terms mean.
pursuing.’
Andrew Kakabadse, Ron Ludlow and Susan
Vinicombe (1988)
Figure 1.1 Mintzberg’s (1987) five ways of ‘Strategy is concerned with making major
thinking about strategy decisions affecting the long-term direction
of the business.’
Strategy can be thought of as being like: Graeme Drummond and John Ensor (1999)
• A plan: ‘a consciously intended course
of action’. Part of setting the organisation’s overall
• A ploy: ‘a manoeuvre intended to outwit a direction will inevitably involve making
competitor’. decisions and choices about the scope of its
• A pattern: underpinning ‘a stream of activities. In this sense strategy rests on
actions’. agreement not only about what the
• A position: a deliberate stance taken in organisation should be doing, but also about
relation to the environment (i.e. the world the things it should not be doing.
in which it works).
• A perspective: an all-embracing way of In turn this involves managing the relationship
thinking about the organisation and its between an organisation and the world in
approach to the world. which it works (sometimes referred to as its
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‘operating environment’). Consequently one British strategy writer Gerry Johnson (1992)
aim of strategic management is ensuring that who warns of the dangers of what he calls
– as far as possible – an organisation ‘strategic drift’. This occurs when the
continues to ‘fit in’ with its world. relevance of an organisation to the world in
which it works becomes gradually diminished
as things in that world change. Hence this
danger is about not keeping up with
environmental change.
Figure 1.2
Effective strategy ensures that the organisation continues to fit in with the world in which it
works, thus avoiding strategic drift
(a) An organisation stays synchronised with, and keeps up with changes in,
its environment
ENVIRONMENTAL CHANGE
THE ORGANISATION
TIME
ENVIRONMENTAL CHANGE
THE ORGANISATION
TIME
(c) Ineffective strategy leads to an increasing gap between the organisation and
the world in which it works = strategic drift
ENVIRONMENTAL CHANGE
THE ORGANISATION
TIME
Figure 1.3
Well-thought-through strategies permeate every part of the organisation
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And then, to be useful, strategy needs to
turn into a set of actions to be carried out
in the real world. So appropriate strategic
thinking tends to ensure pragmatism by
making sure that an organisation’s activities Case study: Adopting a strategic approach
match its capabilities and resources. Thus at the Manchester Art Gallery
in this sense strategic decisions usually
have major resources implications, i.e. Manchester City Galleries is a department
implications for an organisation’s finances, of Manchester City Council and a major
staffing and knowledge base (see Figure regional galleries service. It manages four
1.4). venues, including the flagship Manchester
Art Gallery.
Figure 1.4 At a glance – the top seven
distinguishing features of strategy Kate Farmery, Head of Marketing and
Business Development, explained that
Strategy is concerned with: Manchester Art Gallery has recently
1. Thinking about important and major undergone a £35 million redevelopment
issues for the organisation. which transformed the way in which the
2. The long-term direction of an organisation engages with its audiences.
organisation.
3. Deciding the scope of the organisation’s A market study prior to the closure of the
activities – both what to do and what NOT Gallery for this project indicated that most
to do. visits were made by a core audience of less
4. Managing the relationship between the than 30,000. Given that project funding
organisation and the world in which it was partially awarded on the basis of
works so that it continues to fit in with it. growing audiences, the Gallery’s approach
5. Bringing together, coordinating and to strategic marketing needed reviewing.
integrating an organisation’s various There is now marketing representation at
activities. senior management level, a marketing
6. Ensuring the organisation’s activities fit team of six and a cross-gallery focus on
with its available capabilities and developing new audiences.
resources.
7. Translating the organisation’s thinking Current and potential visitors are
and aspirations into a practical set of segmented into three main bands: ‘die-
actions. hards’, ‘maybes’ and ‘difficults’. The harder-
to-reach ‘difficults’ are encouraged via
Consequently it can be seen that the outreach programmes while the ‘maybes’,
strategy’s whole area of concern (as it were, who have more propensity to become
the domain it inhabits) relates to ‘big things’. regular visitors, are targeted via
Big issues, big ideas and big thinking about the programming and mainstream marketing
organisation’s desired future destiny and activities.
direction that help it fit in with the big picture.
The momentum for this change in strategy
was gained from the overall transformation
process, but most staff feel that this
increased audience focus has enriched
their activities. The annual attendance
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Figure 1.5
Strategy, strategic planning and strategic management as three distinct activities and roles
Figure 1.6
The links between strategy, strategic planning and strategic management
THE DESIRED
WAY TO GO
STRATEGY Strategic
planning The
GOAL
STRATEGIC
MANAGEMENT
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Figure 1.7
Tactics vs. strategy
Figure 1.8
The mutual dependence of both good srategies and tactics after Mc Donald (2002)
STRATEGY
Effective Ineffective
Efficient
THRIVE DIE
(quickly)
TACTICS
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2. The essence of marketing and arts marketing
Figure 2.1
The matching concept.
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what it stands for. So marketing can be
used to encourage involvement with an
organisation in the form of both
consumption and participation.
‘The central idea of marketing is of a • And that a key set of concerns and points
matching between a company’s capabilities of reference for effective marketing
and the wants of customers in order to practice is understanding an
achieve the objectives of both parties.’ organisation’s customers and users, and
Malcolm McDonald (1999) setting out to satisfy their needs.
What’s more, it’s a model that has a number It was noted earlier that marketing can also be
of interesting and important implications. If thought of as a dedicated management task.
the underlying purpose of marketing is It’s a job that someone, somewhere in the
taken to be about using an identified match organisation, has to perform and can’t really
to bring about an exchange of value (or be left to chance. The ways in which this task
swap) of some kind, then the following can is done can take many forms. However, by
be seen: examining best practice it is possible to spot
the elements and stages involved in doing the
• That marketing is a discipline whose job of marketing in an organisation.
purpose, intention and practice range far
wider and deeper than the set of tools Such an examination results in a model that is
and techniques (such as leaflets, posters frequently described as ‘the marketing
and other publicity mechanisms) that tend process’. This is driven by the underlying
to be used as a part of marketing activity. intentions of both finding a match between
• That marketing isn’t exclusively about organisation and its potential customers or
financial transactions. It can be used not users, and of using that match as a basis for
only to encourage people to buy from an marketing action intended to stimulate an
organisation, but also to encourage exchange. The basic ‘marketing process model’
people to buy into an organisation and is shown in Figure 2.2.
2. Review the
organisation and research
customers
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Arts marketing is different – good. In this respect the pre-eminent American
and special authority on management Peter Drucker
(1990) makes a telling observation with
When it comes to marketing used in support of powerful and positive resonances for arts-
the arts and culture (‘arts marketing’, as it based, not-for-profit organisations.
were) there is a further intriguing and
fascinating complication. Possibly because of
its roots in the corporate sector, or maybe
because of the resonances accompanying its
introduction to the arts in this country (which
coincided with a new emphasis on best ‘The non-profit institution[’s] product is a
‘commercial’ practice), even today marketing is changed human being. Their product is a
sometimes unjustly treated with suspicion in cured patient, a child that learns, a young
some parts of our sector. woman grown into a self-respecting adult,
a changed human life altogether.’
This seems intrinsically unfair, because first Peter Drucker (1990)
and foremost the idea of arts marketing was
never just to apply wholesale the thinking and Overall, this concept of the not-for-profit
ways of working of big business. Indeed, organisation means that subsidised arts
because our sector is intrinsically different, organisations effectively work to a threefold
just adopting corporate practice was never set of strategic priorities. They must respond
going to work. What is required is that we to the artistic urge by safeguarding artistic
borrow the best of commercial marketing integrity. They have to remain financially viable
ideas and adapt them to support the arts’ by meeting the financial imperative of
purposes. generating a surplus on some of their
activities. And at the same time, because they
Indeed the nature of these differences – are using monies drawn from general taxation,
between the arts and commerce – reverberate subsidised arts organisations have a moral and
through the activities of arts organisations in social responsibility to ensure maximum
such a way that they determine the key access and equality of opportunity for all
differences between arts and commercial (Figure 2.4).
marketing. And perhaps the central difference
is that – especially in the publicly funded Figure 2.4
sector – arts organisations are frequently Multiple priorities for the not-for-profit
what are known as ‘not for profit’ or ‘non-profit’ arts organisation
organisations (as opposed to ‘for profit’ or
Fulfil the artistic urge
commercial organisations).
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The Customs House, South Shields varies the
marketing being used to achieve a project’s
desired purpose
‘The aim of arts marketing is to bring an And in the case of subsidised, not-for-profit
appropriate number of people, drawn from arts organisations, there needs to be initial
the widest possible range of social clarity about the whole point of an exercise,
backgrounds, economic conditions and age, such that the action steps of the marketing
into an appropriate form of contact with process can be customised to suit it.
the artist and, in so doing, to arrive at the
best financial outcome compatible with
the achievement of that aim.’
Keith Diggle (1994)
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3. The importance of planning
Strategic marketing planning is like a tripod. Figure 3.1 Potential excuses for not
It relies on three legs for support and stability. planning – at a glance
Unsurprisingly, the third leg of this tripod –
after ‘strategy’ and ‘marketing’ – is the Planning can feel like:
concept of ‘planning’ itself. • a maternalistiic or paternalistic imperative
– ‘mummy and daddy know best’
Unlike the pair of terms introduced so far, • a restriction on one’s creativity – ‘I’ve got
planning is probably a lot easier to define and an artistic temperament, and planning
understand. It’s less arcane, feels less esoteric would cramp my style’
and – of all the triptych of notions involved • a potential waste of time – ‘I’m far too
here – it can feel closer to everyday common busy to plan’.
sense.
Yet none of these reservations seem
However, there can often be a reluctance for particularly valid, as is noted by an American
organisations to engage with planning, and writer on arts management, Frederic Vogel,
this sometimes seems to be a particular case quoted by Phyllida Shaw (1995).
in our sector – the arts and culture. This is
possibly for three reasons.
Figure 3.2
Planning is a ‘time maker’, not a ‘time waster’
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As is discussed in Chapter 4 of Thinking BIG!, accepted as an unavoidable and given factor,
planning for strategy involves close analysis of which can increase the range of uncertainties
the organisation as well as a thoughtful and that an organisation faces and the risks
far-reaching inspection of the world in which it associated with these uncertainties. However,
works (a.k.a. its environment). As a result carrying out a planning process that involves
planning assists the development of a high- all the relevant members of a team, is founded
level, big picture-based overview of the on a careful examination of the organisation
organisation and the world in which it works. and its environment, and has helped the
Moreover, once the organisation has acquired organisation agree what it wants and needs
that ‘long view’, it will then be well placed to to do (and how to do it), helps an organisation
identify and set priorities. Or, put more simply, to cope with uncertainty. And as further
to spot what is important and what matters to spin-offs, it prepares the organisation and its
it and its future, as opposed to what is not and people for change, while reducing the level of
doesn’t really matter. risk faced because it has been prepared for
(Figure 3.3).
Equally, by encouraging an organisation to
inspect and review the world in which it works, Figure 3.3 Potential reasons for, and
a planning process is almost akin to installing benefits of, undertaking a strategic
long-range radar. This ‘radar’ enables the planning process — at a glance
organisation to register incoming threats and
potential opportunities. And it helps an Planning can:
organisation to do this while there is still time • generate ownership
to do something about these incoming factors. • establish consensus
So a planning process also makes the • encourage an overview of the
organisation environmentally alert. organisation and the world in
which it works
It was observed above that one defining • identify and set priroities
aspect of strategy is the way in which it can • make the organisation environmentally
permeate, determine and inform the whole alert
gamut of an organisation’s activities. • enhance coordination between different
Consequently by planning what an activities
organisation intends to do and how it will do it • ensure optimised resource allocation
inevitably enhances coordination between its • help the organisation and its people cope
different activities. This can be important with uncertainty
because – as does building a broad consensus • prepare the organisation and its people
– it increases the chances for making sure for change
that everyone involved has a common • reduce risk by preparing for it.
understanding of what is required and is
‘singing from the same song sheet’. In turn
this will ensure optimised allocation of
resources such as time, money, people,
knowledge and ideas.
Implementation
Background
Some in-house market research was
Dundee Contemporary Arts (DCA) opened implemented in order to find out about
in March 1998. Its building houses two attenders. At least 10% of all visitors were
galleries, two cinemas, print studio, visual approached by attendants, thus providing
research centre, café/bar, shop and a broad snapshot of attenders throughout
education and outreach facilities. Since its the day. Additionally, front-of-house and
opening, approximately 900,000 visitors box office were asked to increase their
have attended. Twenty exhibitions have data capture to 60% using the Databox
been held, 11 new major works have been system. This collected transactional
commissioned and approximately 900 films information as well as names and
have been shown, including 300 foreign addresses, which could be cross-referenced
language and 175 British. against attenders at the free exhibitions.
Cinema attenders were asked to complete
Identified issues a more detailed questionnaire including
questions about value for money, their use
Jeni Iannetta, Head of Communications, of other cinemas, the programming and
says that her role involves the location of the cinema.
management of press, marketing, front-of-
house and customer services. Once the The results of this research were then fed
organisation reached two years old, a set into the marketing plans as follows.
of challenges became obvious. Although it was found that attenders were
coming from a wide geographical area,
Because exhibitions were free, there was there were certain postcodes from which
minimal data on attendance and attenders, attendance was less than in other areas. So
and information gathered from the cinemas the quantities of cinema leaflets
indicated that patrons were not booking in distributed were increased and a change in
advance but buying tickets on the day of the distribution locations was piloted. As
the showing, so data was not being part of a sponsorship proposal a chain of
captured either. corner shops agreed to accept leaflets in
return for complementary tickets,
Two marketing plans were formulated: a invitations to private viewings and their
five-year plan and a more detailed logo being featured on the website and on
strategic plan for 2002–03. Thanks to print.
these it was concluded that the DCA team
could be happy with the levels of Thanks to these planned innovations DCA
awareness of the organisation. But it saved approximately £10,000 in
seemed important to know more about distribution costs, attendance increased by
attenders; in particular, to identify any 10% and income increased by 12%.
gaps in the attender profile, for example,
specific age groups. Additionally, the Jeni emphasises that where budgets are
objective was set of monitoring patterns tight, planning is particularly important
of attendance, for example the overlap because of the need to use existing
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resources as effectively as possible; in
particular, the importance of knowing as
much as possible about audiences and
communicating relevantly with each of the
target markets. The DCA’s five-year plan
lines up the long-term aims and objectives,
while the one-year plans provide
supporting detail. Each year core
activities, pilot stage activities and first
phase activities are defined. As a result of
this planning cycle future activities are
likely to include: