Strategy Lecture Mar2012

Strategic Management
Robert Jones 2012

Based on Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Definition of Strategy
Strategy is the direction and
scope of an organisation over the
long term, which achieves
advantage in a changing
environment through its
configuration of resources and
competences with the aim of
fulfilling stakeholder
expectations.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson
Education
Layers of the business

environment
Exhibit 2.1

The vocabulary of strategy
Exhibit 1.2

A model of the elements of strategic

management
Analysis external, internal
and stakeholders
(fairly straightforward)
Options
and selection of
option
(not so difficult)
Exhibit 1.3
Implementation
(now it gets tricky !
Based on Johnson, Scholes & Whittington (2005)

Strategy as a Subject of Study

1960s Harvard case
study
60/70 Corporate
s
planning
1980s Adaptive
processes
(Quinn)
1980s Market
positioning
(Porter)
1980s Resource based
theory (Hamel,
Prahalad)
What would you do if you were CEO?

Systematised and analytical
approach
Complexity and uncertainty. Influence
of experience, politics, culture,
history
Assessing competitive forces (5
forces) and positioning
Unique resources, core competences
1990s Firms as
Innovation to deal with change
organisms
(Eisenhardt,
Johnson,Stacey)
Scholes & Whittington (2005)
Mintzberg, H.
Ten Strategy Schools
(The Strategy Safari)
Bowman, C.
Generic Strategies a Substitute for Thinkin
There are many ways of looking at strategy:
The risk of strategic drift
Exhibit 1.4

Good strategy is in the overlap

Often, the environment E moves
and the organisation does not move
- this can be fatal (strategic drift)
Contemporary Strategy Themes (1)

Internationalisati E-Commerce
Speed and
on
direction of
Size of market
technology
Range of
change
competitors
Expectations
Relationships
about how to do
overseas
business
E-commerce
Institutional/cult
capability
ural orientation
Service small
to strategy and
markets
Johnson,
& Whittington (2005)
profit Scholes
orientation
Exploring Corporate Strategy, 7th Edition,
Contemporary Strategy Themes (2)

Changing purposes Knowledge and
Change from pure
profit driven
Corporate scandals
Corporate social
responsibility
AND drive for
shareholder value
Public sector more
business-like
target setting and
service orientation
Learning
Innovation
Generate and
integrate
knowledge/prom
ote learning
New ways of
doing business
People
interactions

Exploring Corporate Strategy, 7th Edition,
The role of the paradigm in

strategy formulation
Exhibit I.i

Three strategy lenses
Exhibit I.v

Macroenvironment PESTEL
(1)
Exhibit 2.2

Government policy
The 2012 Financial Statement
How will this influence business and strategy?
http://www.youtube.com/watch?v=d0-V_HrrzcU
le Walsh, IAG plc (British Airways) and Mike OLeary, Ryanair

pond to recent changes in APD Air Passenger Duty
http://www.youtube.com/watch?v=RuQY_WKbHEM&feature=related
Drivers of Globalisation
This is an excellent framework

we will build on this in later lecture
Source: Based on G. Yip, Total Global Strategy ll, FT/Prentice Hall, 2003, chapter 2.
Exhibit 2.3

Porters Diamond
The Determinants of National Advantage
This is an excellent framework

when looking at
conditions for business
Source: M. Porter, Competitive Advantage of Nations, Macmillan, 1990.
Exhibit 2.4

rst test yourself

ou have seen this before
ll in the blanks
The Five Forces Framework
Source: Adapted from M.E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors
1980, Free Press, 1980, p. 4. Copyright 1980,1988 by The Free Press, a division of Simon & Schuster Inc.
Reproduced with permission.
Exhibit 2.5
The Life-Cycle Model
Exhibit 2.6

Strategic Capability- the

terminology
Exhibit 3.2

The Value Chain
Source: M.E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance, Free Press,
1985. Used with permission of The Free Press, a division of Simon & Schuster, Inc. 1985, 1988 by Michael
E. Porter. All rights reserved. Johnson, Scholes & Whittington (2005)
Exhibit 3.6
The Value Network
Source: M.E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance, Free Press,
1985. Used with permission of The Free Press, a division of Simon & Schuster Inc. 1985, 1988 by Michael
E. Porter. All rights reserved.Johnson, Scholes & Whittington (2005)
Exhibit 3.7
See my lecture on Competences

based on application of the Value Chain
With examples of
Zara
Ryanair
Apple
Honda
Toyota
http://cambridgemba.wordpress.com/strategy
/
Knowledge Creation Processes
Source: I. Nonaka and H. Takeuchi, The Knowledge-Creating Company, Oxford University Press Inc.,
1995. Reprinted by permission of Oxford University Press.
Exhibit 3.9

Expectations and Purposes - Outline
Corporate governance
Organisational stakeholders
Stakeholder mapping
Ethical issues
Culture
Cultural web
Communication of organisational
purposes
Expectations and Purposes
Exhibit 4.1

Stakeholder Mapping: the Power/Interest

Matrix
Source: Adapted from A. Mendelow, Proceedings of the Second International Conference on Information
Systems, Cambridge, MA, 1991.
Exhibit 4.5

The Cultural Web
Exhibit 4.11

Strategic choices
Exhibit III.1

The Strategy Clock
Note: The strategy clock is adapted from the work of Cliff Bowman (see D. Faulkner and C. Bowman, The
Essence of Competitive Strategy, Prentice Hall, 1995.) However, Bowman uses the dimenstion Perceived
Use Value.
Exhibit
5.2a
The Strategy Clock
Exhibit 5.2b

Competitive Strategies in Hypercompetitive Conditions
Competitive advantage is temporary

Rapid imitation
Not sustainable
Competitive advantage relates to

Organisations ability to change
Speed
Flexibility
Innovation
Disruption of market
Competition and Collaboration
Exhibit 5.5

Game Theory - Prisoners Dilemma
Exhibit 5.6

Corporate Level Issues
Exhibit 6.1

Related Diversification
Exhibit 6.3

Diversity and Performance
Exhibit 6.4

Reasons for International Diversity

Market-based
Exploit cultural/
geographic differences
Globalisation of markets &

competition
Cash in on differences in
culture
Following customers
Administrative differences
Bypass limitations in home

market
Specific geographical/
economic differences
Utilise strategic capabilities
Economic benefits
Broaden market size
Economies of scale
Internationalise value-adding
activities
Stabilisation of earnings across

markets
Enhance knowledge
The Growth Share (or BCG) Matrix
Exhibit 6.8

Public Sector Portfolio Matrix
Source: J.R. Montanari and J.S. Bracker, Strategic Management Journal, vol. 7, no. 3 (1986), reprinted by
permission of John Wiley & Sons Ltd.
Exhibit 6.9

Indicators of SBU Strength and Market Attractiveness
Exhibit 6.10a

Market Attractiveness/SBU Strength

Matrix
Exhibit 6.10b

Strategy Guidelines Based on Directional Policy Matrix
Exhibit 6.10c


Strategy Lecture Mar2012

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Strategic Management

Robert Jones 2012

Layers of the business

Johnson, Scholes & Whittington (2005)

The vocabulary of strategy

Johnson, Scholes & Whittington (2005)

A model of the elements of strategic

Based on Johnson, Scholes & Whittington (2005)

Strategy as a Subject of Study

What would you do if you were CEO?

Ten Strategy Schools

(The Strategy Safari)

Generic Strategies a Substitute for Thinkin

There are many ways of looking at strategy:

The risk of strategic drift

Johnson, Scholes & Whittington (2005)

Good strategy is in the overlap

Contemporary Strategy Themes (1)

Contemporary Strategy Themes (2)

Johnson, Scholes & Whittington (2005)

The role of the paradigm in

Johnson, Scholes & Whittington (2005)

Three strategy lenses

Johnson, Scholes & Whittington (2005)

Johnson, Scholes & Whittington (2005)

le Walsh, IAG plc (British Airways) and Mike OLeary, Ryanair

This is an excellent framework

Johnson, Scholes & Whittington (2005)

This is an excellent framework

Source: M. Porter, Competitive Advantage of Nations, Macmillan, 1990.

Johnson, Scholes & Whittington (2005)

rst test yourself

The Five Forces Framework

The Life-Cycle Model

Johnson, Scholes & Whittington (2005)

Strategic Capability- the

Johnson, Scholes & Whittington (2005)

The Value Chain

Exploring Corporate Strategy, 7th Edition, Pearson

The Value Network

Exploring Corporate Strategy, 7th Edition, Pearson

See my lecture on Competences

Knowledge Creation Processes

Johnson, Scholes & Whittington (2005)

Expectations and Purposes - Outline

Expectations and Purposes

Johnson, Scholes & Whittington (2005)

Stakeholder Mapping: the Power/Interest

Johnson, Scholes & Whittington (2005)

The Cultural Web

Johnson, Scholes & Whittington (2005)

Johnson, Scholes & Whittington (2005)

The Strategy Clock

Exploring Corporate Strategy, 7th Edition, Pearson

The Strategy Clock

Johnson, Scholes & Whittington (2005)

Competitive Strategies in Hypercompetitive Conditions

Competitive advantage is temporary

Competitive advantage relates to

Competition and Collaboration

Johnson, Scholes & Whittington (2005)

Game Theory - Prisoners Dilemma