CRAFTING AND IMPLEMENTING SUCCESSFUL

STRATEGIES

Morteza Sardari
SESSION 1
 Introducing myself
My background
My recent papers
 Relationship Between Effectuation/Causation and New Venture Performance
 antecedents of effectual action
 How attention to different institutional logics of diverse financiers increases the chance of fund-raising and
survival of high-tech seed ventures
 The impact of Technology Maturity and Financial Partnering on the Growth of High-tech Ventures
 Organizational network dynamic capability in high-tech start-ups
 How to raise external fund for high-tech ventures
 How to align staffing practices with business strategies
 Analyzing Iranian non-profit archive organizations’ critical success factor and assessing the performance of these
organizations
 My decisions for future
 Population ecology perspective:
The environment pick the successful firms
 There is no reason to presume that the great structural variability among organizations
reflects only or even primarily adaptation. There are a number of obvious limitations
on the ability of organizations to adapt. That is, there are a number of processes that
generate structural inertia:
• Always there are assets that are not easily transferable to other tasks or functions.
• Organizational decision-makers face constraints on the information they receive.
• When organizations alter their structure, political equilibria are disturbed.
• organizations face constraints generated by their own history: norms
• Legal and fiscal barriers to entry and exit from markets.
• Internal constraints upon the availability of information are paralleled by external
constraints.
• Legitimacy constraints also emanate from the environment.
 RBV perspective:
The VRIN resources make firms successful
(Barney, 1991)

According to this perspective, in heterogeneous environments, resources that

are valuable, rare, inimitable, non-sobstitutatable create sustainable competitive
advantage.
 Strategy perspective
Strategic competitiveness
 Strategic competitiveness is achieved when a firm successfully formulates and
implements a value-creating strategy.

strategy
 A strategy is an integrated and coordinated set of commitments and actions.
 They are designed to exploit core competencies and gain a competitive advantage.
 When choosing a strategy, firms make choices among competing alternatives as the
pathway for deciding how they will pursue strategic competitiveness.
 In this sense, the chosen strategy indicates what the firm will do as well as what the
firm will not do.
 The I/O Model of Above-Average Returns
 It assumes:
 First, the external environment is assumed to impose pressures and constraints that
determine the strategies.
 Second, resources are highly mobile across firms,
 Third, organizational decision makers are assumed to be rational and committed to
acting in the firm’s best interests.
 Strategy looks like an elephant
It was six men of Indostan
To learning much inclined,
Who went to see the Elephant
(Though all of them were blind)
That each by observation
Might satisfy his mind.
The First approached the Elephant,
And happening to fall
Against his broad and sturdy side,
At once began to brawl:
"God bless me but the Elephant
Is very like a wall."
 Strategy looks like an elephant
The Second, feeling of the tusk,
Cried, "Ho! What have we here
So very round and smooth and sharp?
To me 'tis mighty clear
This wonder of an Elephant
Is very like a spear!"
The Third approached the animal,
And happening to take
The squirming trunk within his hands,
Thus boldly up and spake:
"I see," quoth he, "The Elephant
Is very like a snake!"
The Fourth reached out an eager hand,
And felt around the knee,
"What most this wondrous beast is like
Is mighty plain," quoth he;
" 'Tis clear enough the Elephant
Is very like a tree!"
 Strategy looks like an elephant
The Fifth, who chanced to touch the ear,
Said: "E'en the blindest man
Can tell what this resembles most;
Deny the fact who can,
This marvel of an Elephant
Is very like a fan!"
The Sixth no sooner had begun
About the beast to grope,
Than, seizing on the swinging tail
That fell within his scope,
"I see," quoth he, "the Elephant
is very like a rope!"
And so these men of Indostan
Disputed loud and long,
Each of his own opinion
Exceeding stiff and strong,
Though each was partly in the right,
And all were in the wrong!
 Moral
So oft in theologic wars,
The disputants, I ween,
Rail on in utter ignorance
Of what each other mean,
And prate about an Elephant
Not one of them has seen!
 Schools of strategy
 The Design School: Strategy is getting fixed between the internal strengths and the outer threats
and opportunities.
 The Planning School: structural planning process with many levels of decision making.
 The Positioning School: aims to define the position through the industry situation
 The Entrepreneurial School: The unique figure of the future is defined by a team leader who is
utilized as the source of vision and mission.
 The Cognitive School: the process of strategic decision-making which is based on the concept and
its frameworks already exist.
 The Learning School: exploits the strategy model like a learning process where the competencies
and capabilities are important parts of the process and strategies that are underpin.
 The Power School: The school which focuses on the strategy making pillared of power.
 The Cultural School: It defines the importance of culture as an enabler of the strategic formulation.
 The Environmental School: This believes that the strategies and the companies have a life cycle
and it rotates continually.
 The Configuration School: The transformation process is viewed as the strategy for the company in
order to undertake such revolutionary alteration.
 Some lessons from Mintzberg
 "Strategy sets direction.“
Advantage: The main role of strategy is to chart the course of an organization in order
for it to sail cohesively through its environment.
Disadvantage: Strategic direction can also serve as a set of blinders to hide potential
dangers.
 "Strategy focuses effort.“
Advantage: Strategy promotes coordination of activity.
Disadvantage: There may be no peripheral vision, to open other possibilities.
 "Strategy defines the organization.“
Advantage: providing people with a shorthand way to understand their organization and
to distinguish it from others.
Disadvantage: To define an organization too sharply may also mean define it too simply,
sometimes to the point of stereotyping, so that the rich complexity of the system is lost.
 "Strategy provides consistency.“
Advantage: Strategy is needed to reduce ambiguity and provide order.
The I/O Model of Above-Average Returns
The Resource-Based Model of Above-Average Returns
 Stakeholders

 Stakeholders are the individuals,

groups, and organizations that
can affect the firm’s vision and
mission, are affected by the
strategic outcomes achieved, and
have enforceable claims on the
firm’s performance.
 What is strategy?
 The root of the problem for many companies is the failure to distinguish between
operational effectiveness and strategy. The quest for productivity, quality, and speed
has spawned a remarkable number of management tools and techniques, but those
companies have been frustrated by their inability to translate those gains into
sustainable profitability.

 Operational effectiveness (OE) means performing similar activities better than rivals
perform them. In contrast, strategic positioning means performing different
activities from rivals’ or performing similar activities in different ways.

 The problem with OE is that competitors can quickly imitate management

techniques, new technologies, input improvements, and superior ways of meeting
customers’ needs. Instead, Competitive strategy is about being different. It means
deliberately choosing a different set of activities to deliver a unique mix of value.
 Example of strategic Positions
 Southwest has staked out a unique and valuable strategic position based on a
tailored set of activities. On the routes served by Southwest, a full-service airline
could never be as convenient or as low cost.

 Ikea, the global furniture retailer based in Sweden, also has a clear strategic
positioning. Ikea targets young furniture buyers who want style at low cost.
 The Origins of Strategic Positions
 First, positioning can be based on producing a subset of an industry’s products or
services. It is called variety-based positioning because it is based on the choice of
product or service varieties rather than customer segments.

 A second basis for positioning is that of serving most or all the needs of a particular
group of customers. It is called needs-based positioning, which comes closer to
traditional thinking about targeting a segment of customers.

 The third basis for positioning is that of segmenting customers who are accessible in
different ways. Although their needs are similar to those of other customers, the best
configuration of activities to reach them is different. It is called access-based
positioning. Access can be a function of customer geography or customer scale—or of
anything that requires a different set of activities to reach customers in the best way.
 A Sustainable Strategic Position Requires Trade-offs
 Trade-offs occur when activities are incompatible. Simply put, a trade-off means that
more of one thing necessitates less of another. e.g. An airline can choose to serve meals
adding cost and slowing turnaround time at the gate or it can choose not to, but it
cannot do both without bearing major inefficiencies.

 Trade-offs arise for three reasons: The first is inconsistencies in image or reputation. A
company known for delivering one kind of value may lack credibility and confuse
customers—or even undermine its reputation—if it delivers another kind of value or
attempts to deliver two inconsistent things at the same time.
 Second, and more important, trade-offs arise from activities themselves. Different
positions (with their tailored activities) require different product configurations, different
equipment, different employee behavior, different skills, and different management
systems.
 Finally, trade-offs arise from limits on internal coordination and control. By clearly
choosing to compete in one way and not another, senior management makes
organizational priorities clear.
 strategic fit creates competitive advantage
 Fit locks out imitators by creating a chain that is as strong as its strongest link.

 First-order fit is simple consistency between each activity (function) and the overall
strategy.

 Second-order fit occurs when activities are reinforcing.

 Third-order fit is called optimization of effort. Coordination and information exchange

across activities to eliminate redundancy and minimize wasted effort are the most basic
types of effort optimization.

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