CH01a

Chapter 1The Concept of Strategy

© 2013 Robert M. Grantwww.contemporarystrategyanalysis.com 1

The Concept of Strategy


OUTLINE

• The role of strategy in success• A framework for strategy analysis• The evolution of strategic management• What is strategy? Who do we describe it?• How is strategy made?• Strategy and not-for-profit organizations

Ingredients of Success


Queen Elizabeth & The House of Windsor

Lady Gaga and the Haus of Gaga

Goals Life-long dedication to role as head of state and reigning monarch

Single-minded quest for stardom through her Lady Gaga persona

Understanding the Environment

Alertness to the changing political environmentSensitive to the mood and needs of the British people

Awareness of the new economics of the music business, the marketing potential of social networking and needs of Generation Y

Resource Appraisal Recognized lack of formal authority and need to exploit traditional loyalties and informal influence

Exploited her innate theatricality, eccentricity, design capability and musical skills

Implementation Resolute commitment; strong self discipline; emphasis on building an effective family team supported by loyal professionals

Devotion to living the Lady Gaga character; wiliness to create new images on almost a daily basis

What Makes a Successful Strategy?



The Basic Strategy FrameworkStrategy as a Link Between the Firm and its Environment

The Evolution of Strategic Management


Ryanair’s Activity System



• Distinguishing strategy from tacticso Strategy is the overall plan for deploying

resources to establish a favorable positiono Tactic is a scheme for a specific manoeuvre

• Characteristics of strategic decisionso Importanto Involve a significant commitment of resourceso Not easily reversible

What is Strategy?


Strategy: a plan, method or series of actions designed to achieve a specific goal or effect

Wordsmythe Dictionary (http://www.wordsmyth.net)

Strategy is the pattern of objectives, purposes or goals and the major policies and plans for achieving these goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be.

Kenneth Andrews - The Concept of Strategy (Irwin, 1971)

The determination of the long-run goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.

Alfred Chandler - Strategy and Structure (MIT Press, 1962)

Definitions of Strategy

Sources of Superior Profitability



Describing StrategyCurrent Positioning; Future Direction

Strategy Making: Decision or Process?


STRATEGY AS DESIGN

Planning and rational choice

STRATEGY AS PROCESS

Many decision makers responding to multitude of external and internal forces

INTENDED STRATEGY EMERGENT STRATEGY

REALIZED STRATEGY

Mintzberg’s Critique of Formal Strategic Planning

• The fallacy of prediction – The future is unknown• The fallacy of detachment – Impossible to divorce formulation from

implementation• The fallacy of formalization – Inhibits flexibility, spontaneity, intuition and

learning

Sources of Superior Profitability


Strategy as Decision Support

Improves the quality of decision making

Improves performance by setting high

aspirations

Strategy as Coordination & Communication

Strategy as Target

Creates consistency and unity


• Strategy analysis improves decision processes, but doesn’t give answers

• Strategy analysis assists us to identify and understand the main issues

• Strategy analysis helps us to manage complexity

• Strategy analysis can enhance flexibility and innovation by supporting learning

The Role of Analysis in Strategy Making

Applying Strategy Analysis to Not-For-Profits


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CH01a