What is strategy &
types of strategy
The plan
Strategy definition Advantages and Types of strategy
disadvantages of
strategic planning
2
Strategy definition
• Long term direction
• Sustainable competitive
advantage
• Resources and competencies
• Stakeholder expectations
3
Advantages & disadvantages of strategic planning
ADVANTAGE OR DISADVANTAGE?
Predict the future Identify risks Consistency
Rigidity Cost Control
4
Advantages & disadvantages of strategic planning
ADVANTAGES DISADVANTAGES
o Identify risks o Predict the future
o Consistency o Rigidity
o Control o Cost
5
Types of strategy 1 – Rational planning
• Analysis
• Choice
• Implementation
• Stable environment,
large organisation
6
Types of strategy 2 – Emergent
• Analysis & Choice together
• Implementation
• Dynamic environment,
large organisation
7
Types of strategy 3 – Logical incrementalism
• Small scale changes
• Bounded rationality
• DANGER = strategic drift
• Stable environment, small
organisation
8
Types of strategy 4 – Freewheeling opportunism
• No formal strategy
• Exploit opportunities
• Reactive
• Dynamic environment,
small organisation
9
Example
Stable
Complex
A freewheeling opportunism
approach for strategic
formulation would be Hostile
advantageous for which
ONE of the following types of Static
environment?
Bureaucratic
10
Example - Answer
Stable
Complex
A freewheeling opportunism
approach for strategic
formulation would be Hostile
advantageous for which
ONE of the following types of Static
environment?
Bureaucratic
11
Summary
Strategy definition Advantages and Types of strategy
disadvantages of
strategic planning
12
Strategy lenses &
levels of strategy
The plan
Strategy lenses Certainty and
agreement
Approaches to
strategic planning Levels of strategy
14
Strategy lenses
• Strategy as design
• Strategy as experience
• Strategy as variety / ideas
• Strategy as discourse
15
Certainty and agreement (Stacey, 2007)
Certainty (How)
Close to Far From
Close to
Agreement (Outcomes)
Rational Judgement
e.g. Donald Trump e.g. Apple
Political Edge of chaos
e.g. Labour party e.g. Google
Far from
16
Approaches to strategic planning
Accounting led Position based Resource based
(Outside in) (Inside out)
17
Levels of strategy
Senior management
Corporate Entire company
strategy e.g. overseas expansion
Business level Middle management
strategy Strategic Business Unit
e.g. products to sell
Lower level managers
Operational strategy Departmental level
e.g. marketing plan
18
Example – Levels of strategy
Throughout all levels of its Corporate
organisation, a restaurant chain is
hoping to promote a new strategy.
This strategy will include the Strategic
direction for the whole business,
and for all of its subsidaries and all
functions within each business unit.
Operational
Choose ALL levels of strategy that Business level
the restaurant chain is initiating:
Rational
19
Example – Levels of strategy
Throughout all levels of its Corporate
organisation, a restaurant chain is
hoping to promote a new strategy.
This strategy will include the Strategic
direction for the whole business,
and for all of its subsidaries and all
functions within each business unit.
Operational
Choose ALL levels of strategy that Business level
the restaurant chain is initiating:
Rational
20
The plan
Strategy lenses Certainty and
agreement
Approaches to
strategic planning Levels of strategy
21
The strategy
process
Introduction
Content covered
What is strategy? Types of strategy
Strategy lenses Levels of strategy
23
Learning outcomes
• Analyse the advantages and
disadvantages of strategy development
• Analyse the essential features and
characteristics of strategy
• Analyse different approaches to
strategy development
• Analyse the different levels of strategy
24
Study hints
Cost leader Differentiator Services
25
