BUSS1000 Lecture 6: W6 - Strategy
28 May 2018
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WEEK 6: STRATEGY
STRATEGY:
• Etymology: ancient Greek ‘strategos’ à art of military commander-in-chief
• “The direction and scope of an org over the long term, which achieves advantage through its configuration,
resources or competences, with the aim of fulfilling stakeholder expectations” – Johnson, Scholes, Whittington
o Relevant/related issues:
§ Long term direction
§ Scope of an orgs activities
§ Advantage for org over competition
§ Strategic fit within business environment
§ Orgs resources and competences
§ Values and expectations of powerful actors in and around the org
o Caveats and complications:
§ Complexity
§ Uncertainty
§ Operational decisions
§ Integration
§ Relationships
§ Change
STRATEGY LENSES:
• Design: usage of evaluative and analytic processes to establish clear strategic direction
• Experience: importance of history + previous experiences in shaping decisions à avoid reliance on models
• Ideas: importance of promoting diversity + new ideas which solve uncertainty + problems as they arise
• Discourse: using language to shape strategy and guide via influence, power, legitimacy
HAMBRICK AND FREDRICKSON’S 2001 FRAMEWORK:
• Piecemeal strategies: “when executives call everything a strategy, and end up with a collection of strategies, they
create confusion and undermine their own credibility”
• Putting strategy in place
o Feedback loops (not linear process)
o Mission: fundamental purpose, values + mission
o Objectives: specific targets
o Strategic analysis: industry analysis, trends,
environment, competitors, internal and resources
o Supporting org arrangements: structure, process,
symbols, rewards, people, activities
• Strategic Diamond:
o “If a business must have a single, unified strategy, then it must have parts. What are those parts?”
o 5 elements:
§ Arenas: where will we be active?
• Product categories, segments, geographical areas,
core technologies, value creation changes
§ Vehicles: how will we get there?
• Internal development, joint ventures, licensing,
franchising, acquisitions
§ Differentiators: how will we win the marketplace?
• Image, customisation, price, product reliability
§ Staging: what will be our speed and sequence of moves?
• Speed of expansion, sequence of initiatives
§ Economic logic: how will we obtain our returns?
• Lowest cost through scale + advantage and scope and replication advantages, premium
prices due to unmatchable service + proprietary product features
o Limitations + Critiques:
§ Correct usage demands correct use of each + every other analysis
§ Strategy must evolve and by dynamic
§ Can lead to excessive rigidity
§ Validity of strategy
§ Feedback loops and revision not embedded in model
Document Summary
Etymology: ancient greek strategos" art of military commander-in-chief. The direction and scope of an org over the long term, which achieves advantage through its configuration, resources or competences, with the aim of fulfilling stakeholder expectations johnson, scholes, whittington: relevant/related issues: Values and expectations of powerful actors in and around the org: caveats and complications: Change: design: usage of evaluative and analytic processes to establish clear strategic direction. Experience: importance of history + previous experiences in shaping decisions avoid reliance on models. Ideas: importance of promoting diversity + new ideas which solve uncertainty + problems as they arise: discourse: using language to shape strategy and guide via influence, power, legitimacy. If a business must have a single, unified strategy, then it must have parts. Product categories, segments, geographical areas, core technologies, value creation changes. Lowest cost through scale + advantage and scope and replication advantages, premium prices due to unmatchable service + proprietary product features.
