Strategic Management © Robert Jones 2012 Based on Johnson, Scholes & Whittington (2005) Exploring Corporate Strategy, 7th Edition, Pearson Education

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

Exhibit 2.1

Layers of the business environment


Exhibit 1.2

The vocabulary of strategy


Exhibit 1.3

A model of the elements of strategic management

Analysis – external, internaland stakeholders(fairly straightforward)

Optionsand selection ofoption(not so difficult)

Implementation (now it gets tricky ! )

Based on Johnson, Scholes & Whittington (2005) Exploring Corporate Strategy, 7th Edition, Pearson Education

Strategy as a Subject of Study

Unique resources, core competencesResource based theory (Hamel, Prahalad)

1980s

Innovation to deal with changeFirms as organisms(Eisenhardt, Stacey)

1990s

Assessing competitive forces (5 forces) and positioning

Market positioning (Porter)

1980s

Complexity and uncertainty. Influence of experience, politics, culture, history

Adaptive processes(Quinn)

1980s

Systematised and analytical approachCorporate planning60/70s

What would you do if you were CEO?Harvard case study1960s


Mintzberg, H. Ten Strategy Schools (The Strategy Safari)

Bowman, C. Generic Strategies – a Substitute for Thinking

There are many ways of looking at strategy:

The risk of strategic drift

Exhibit 1.4 Johnson, Scholes & Whittington (2005) Exploring Corporate Strategy, 7th Edition, Pearson Education

Good strategy is in the overlap

Often, the environment E movesand the organisation does not move- this can be fatal (strategic drift)

• Internationalisation– Size of market– Range of competitors– Relationships

overseas– Institutional/cultural

orientation to strategy and profit orientation

• E-Commerce– Speed and direction

of technology change– Expectations about

how to do business– E-commerce

capability– Service small markets

Contemporary Strategy Themes (1)


• Changing purposes– 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

• Knowledge and Learning– Innovation – Generate and

integrate knowledge/promote learning

– New ways of doing business

– People interactions

Contemporary Strategy Themes (2)


Exhibit I.i

The role of the paradigm in strategy formulation


Exhibit I.v

Three strategy lenses


Macroenvironment – PESTEL (1)


Government policy

The 2012 Financial Statement

How will this influence business and strategy?

http://www.youtube.com/watch?v=d0-V_HrrzcU




http://www.youtube.com/watch?v=RuQY_WKbHEM&feature=related

Wille Walsh, IAG plc (British Airways) and Mike O’Leary, Ryanairrespond to recent changes in APD Air Passenger Duty



Drivers of Globalisation

Source: Based on G. Yip, Total Global Strategy ll, FT/Prentice Hall, 2003, chapter 2.

Exhibit 2.3

This is an excellent framework –we will build on this in later lectures


Porter’s Diamond The Determinants of National Advantage

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

Exhibit 2.4

This is an excellent frameworkwhen looking atconditions for business


First test yourself –you have seen this beforefill 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


Strategic Capability- the terminology


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.


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.


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/

http://cambridgemba.wordpress.com/strategy

Knowledge Creation Processes

Exhibit 3.9

Source: I. Nonaka and H. Takeuchi, The Knowledge-Creating Company, Oxford University Press Inc., © 1995. Reprinted by permission of Oxford University Press.


Expectations and Purposes - Outline

• Corporate governance• Organisational stakeholders• Stakeholder mapping• Ethical issues• Culture• Cultural web• Communication of organisational purposes


Expectations and Purposes


Stakeholder Mapping: the Power/Interest Matrix

Exhibit 4.5

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


The Cultural Web


Exhibit III.1

Strategic choices


The Strategy Clock

Exhibit 5.2a

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’.


The Strategy Clock

Exhibit 5.2b Johnson, Scholes & Whittington (2005) Exploring Corporate Strategy, 7th Edition, Pearson Education

Competitive Strategies in Hypercompetitive Conditions

• Competitive advantage is temporary– Rapid imitation– Not sustainable

• Competitive advantage relates to– Organisation’s ability to change– Speed– Flexibility– Innovation– Disruption of market


Competition and Collaboration


Game Theory - Prisoner’s Dilemma


Corporate Level Issues


Related Diversification


Diversity and Performance


Reasons for International DiversityMarket-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


Public Sector Portfolio Matrix

Exhibit 6.9

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


Indicators of SBU Strength and Market Attractiveness

Exhibit 6.10a Johnson, Scholes & Whittington (2005) Exploring Corporate Strategy, 7th Edition, Pearson Education

Market Attractiveness/SBU Strength Matrix

Exhibit 6.10b Johnson, Scholes & Whittington (2005) Exploring Corporate Strategy, 7th Edition, Pearson Education

Strategy Guidelines Based on Directional Policy Matrix

Exhibit 6.10c Johnson, Scholes & Whittington (2005) Exploring Corporate Strategy, 7th Edition, Pearson Education

Documents

Strategic Management © Robert Jones 2012 Based on Johnson, Scholes & Whittington (2005) Exploring Corporate Strategy, 7th Edition, Pearson Education