Exploring Strategy
11th edition
Text and Cases
Chapter 1
Introducing strategy
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Definitions of strategy
Sources: A.D. Chandler, Strategy and Structure: Chapters in the History of American Enterprise, MIT Press, 1963, p. 13; M.E. Porter, ‘What is strategy?’,
Harvard Business Review, November–December 1996, p. 60; P.F. Drucker, ‘The theory of business’, Harvard Business Review, September–October
1994, pp. 95–106; H. Mintzberg, Tracking Strategies: Towards a General Theory, Oxford University Press, 2007, p. 3.
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Slide 1.3
Strategic decisions
Source: From G. Johnson, K. Scholes and R. Whittington. Exploring Corporate Strategy, 8th edn, Pearson Education 2008.
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Purpose of strategy
A mission statement aims to provide
employees and stakeholders with clarity about
what the organisation is fundamentally there
to do.
• ‘What business are we in?’
• ‘What would be lost if the organisation did not
exist?’
• ‘How do we make a difference?’
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Purpose of strategy (cont.)
A vision statement is concerned with the future
the organisation seeks to create.
• ‘What do we want to achieve?’
• ‘If we were here in twenty years what do we
want to have created or achieved?’
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Purpose of strategy (cont.)
Statements of corporate values communicate
the underlying and enduring core ‘principles’
that guide an organisation’s strategy and
define the way that the organisation should
operate.
NB These values do NOT change with
circumstances.
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Purpose of strategy (cont.)
Objectives are statements of specific
outcomes that are to be achieved.
• Often stated in financial terms (e.g. Profit).
• May also be market-based objectives (e.g.
Market Share).
• May emphasise basis of competitive
advantage.
• ‘Triple Bottom Line’ – economic, social and
environmental objectives.
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Strategy statements
Strategy statements should have three main
themes:
• Fundamental goals that the organisation seeks,
which reflect the stated mission, vision and
objectives.
• The scope or domain of the organisation’s
activities.
• The particular advantages or capabilities it has
to deliver all of these.
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The exploring strategy framework
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The exploring strategy framework
The Exploring Strategy Framework includes
understanding the strategic position of an
organisation; assessing strategic choices for
the future; and managing strategy in action.
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Strategic position
The strategic position is concerned with the
impact on strategy of the macro-environment,
the industry environment, the organisation’s
strategic capability (resources and
competences), the organisation’s stakeholders
and the organisation’s culture.
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Strategic position
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Strategic position
Fundamental questions for Strategic position:
• What are the macro-environmental opportunities
and threats?
• How can the organisation manage industry forces?
• How are stakeholders aligned to the organisational
purpose?
• What resources and capabilities support the strategy?
• How does culture fit the strategy?
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Strategic choices
Strategic choices involve the options for
strategy in terms of both the directions in
which strategy might move and the methods
by which strategy might be pursued.
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Strategic choices
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Strategic choices
Fundamental questions for Strategic choice:
• How should individual business units compete?
• Which businesses to include in the portfolio?
• Where should the organisation compete
internationally?
• Is the organisation innovating appropriately?
• Should the organisation buy other companies,
form alliances or go it alone?
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Strategy in action
Strategy in action is about how strategies are
formed and how they are implemented.
The emphasis is on the practicalities of
managing.
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Strategy in action
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Strategy in action
Fundamental questions for Strategy in action:
• Which strategies are suitable, acceptable and feasible?
• What kind of strategy-making process is needed?
• What are the required organisation structures and
systems?
• How should the organisation manage necessary
changes?
• Who should do what in the strategy process? Which
people and what activities?
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Working with strategy
All managers are concerned with strategy:
• Top managers frequently formulate and control
strategy but may also involve others in the
process.
• Middle and lower level managers have to meet
strategic objectives and deal with constraints.
• All managers have to communicate strategy to
their teams and can contribute to the formation
of strategy through ideas and feedback.
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Working with strategy
Organisations may also use strategy specialists:
• Many large organisations have in-house strategic
planning or analyst roles.
• Strategy consultants can be engaged from
management consulting firms (e.g. Accenture,
IBM Consulting, PwC).
• There are a growing number of specialist
strategy consulting firms (e.g. McKinsey & Co.,
The Boston Consulting Group).
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Strategy’s three branches
• CONTEXT – internal and external.
• CONTENT – strategic options.
• PROCESS – formation and implementation.
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Strategy’s three branches
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