Strategicmanagement1

Johnson, Whittington and Scholes, Exploring Strategy, 9th
Edition, © Pearson Education Limited 2011
Slide 1.1
1: Introducing Strategy

Slide 1.2
Learning outcomes
• Summarise the strategy of an organisation in a ‘strategy
statement’.
• Identify key issues for an organisation’s strategy
according to the Exploring Strategy model.
• Distinguish between corporate, business and
operational strategies.
• Understand how different people contribute to strategy
at work.
• Appreciate the contributions of different academic
disciplines and theoretical lenses to practical strategy
analysis.

Slide 1.3
Definitions of strategy (1)
• ‘..the determination of the long-run goals and objectives
of an enterprise and the adoption of courses of action
and the allocation of resource necessary for carrying out
these goals’
Alfred Chandler
• ‘Competitive strategy is about being different. It means
deliberately choosing a different set of activities to deliver
a unique mix of value’
Michael Porter
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, 1996, November–December,
p. 60

Slide 1.4
Definitions of strategy (2)
• ‘..a pattern in a stream of decisions’
Henry Mintzberg
• ‘..the long-term direction of an organisation’
Exploring Strategy
Sources:
H. Mintzberg, Tracking Strategy: Toward a General Theory, Oxford University Press,
2007, p. 3

Slide 1.5
Strategic decisions

Slide 1.6
Three horizons for strategy (1)
• Horizon 1 :
Extend and defend core business.
• Horizon 2 :
Build emerging businesses.
• Horizon 3 :
Create viable options.

Slide 1.7
Three horizons for strategy (2)
Figure 1.2 Three horizons for strategy
Source: M. Baghai, S. Coley and D. While, The Alchemy of Growth, 2000, Texere Publishers: Figure 1.1, p. 5

Slide 1.8
Stakeholders
Stakeholders are those individuals or
groups that depend on an organisation to
fulfil their own goals and on whom, in turn, the
organisation depends.

Slide 1.9
Levels of strategy (1)
Operational strategy
Business-level
strategy
Corporate-
level
strategy
News Corporation
diversifying from print
journalism into social
networking.
Website and marketing
improvements at My
Space to attract more
users.
MySpace engineers
increasing processing
Capacity.

Slide 1.10
Levels of strategy (2)
• Corporate-Level Strategy is concerned with
the overall purpose and scope of an
organisation and how to add value to
business units.
• Business-Level Strategy is concerned with
the way a business seeks to compete
successfully in its particular market.
• Operational Level Strategy is concerned
with how different parts of the organisation
deliver the strategy in terms of managing
resources, processes and people.

Slide 1.11
Strategy statements
Strategy statements should have three
main themes:
• the fundamental goals that the organisation
seeks, which draw on the stated mission,
vision and objectives
• the scope or domain of the organisation’s
activities
• and the particular advantages or capabilities
it has to deliver all these.

Slide 1.12
Working with strategy (1)
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.
• All managers can contribute to the formation
of strategy through ideas and feedback.

Slide 1.13
Working with strategy (2)
Organisations may also use strategy
specialists:
• Many large organisations have in-house
strategic planning or analyst roles.
• Strategy consultants can be engaged from
one of many general 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).

Slide 1.14
Strategy’s three branches (1)
• CONTEXT – internal and external.
• CONTENT – strategic options.
• PROCESS – formation and implementation.

Slide 1.15
Strategy’s three branches (2)
Figure 1.3 Strategy’s three branches

Slide 1.16
The exploring strategy model
Figure 1.4 The Exploring Strategy Model

Slide 1.17
Strategic position (1)
The strategic position is concerned with the
impact on strategy of the external
environment, the organisation’s strategic
capability (resources and competences), the
organisation’s goals and the organisation’s
culture.

Slide 1.18
The
Strategic
Position
Environment
Culture
PurposeCapability

Slide 1.19
Fundamental questions for Strategic Position:
• What are the environmental opportunities and
threats?
• What are the organisation’s strengths and
weaknesses?
• What is the basic purpose of the organisation?
• How does culture shape strategy?

Slide 1.20
Strategic choices (1)
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.

Slide 1.21
Strategic
Choices
Business-
level
Innovation
International
Corporate-
level
Acquisitions &
Alliances

Slide 1.22
Fundamental questions for Strategic Choice:
• How should 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?

Slide 1.23
Strategy in action (1)
Strategy in action is about how strategies
are formed and how they are implemented.
The emphasis is on the practicalities of
managing.

Slide 1.24
Strategy
in Action
Processes
Changing
EvaluatingOrganising
Practice

Slide 1.25
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?

Slide 1.26
Exploring strategy in
different contexts
The Exploring Strategy Model can be applied in
many contexts.
In each context the balance of strategic issues
differs:
• Small Businesses (e.g. Purpose and Growth
issues)
• Multinational Corporations (e.g. Geographical
Scope and Structure/Control issues)
• Public Sector Organisations (e.g. Service/Quality
and Managing Change issues)
• Not For Profit Organisations (e.g. Purpose and
Funding issues)

Slide 1.27
The strategy lenses (1)
The strategy lenses are ways of looking at
strategy issues differently in order to generate
many insights. Looking at problems in
different ways will raise new issues and new
solutions.

Slide 1.28
The strategy lenses (2)
Strategy can be seen as:
• Design
• Experience
• Variety (Ideas)
• Discourse

Slide 1.29
Strategy as design
Figure C.i Design lens

Slide 1.30
Strategy as experience
Figure C.ii Experience lens

Slide 1.31
Strategy as variety
Figure C.iii Variety lens

Slide 1.32
Strategy as discourse
Figure C.iv Adaptive tension

Slide 1.33
The strategy lenses summary
Table C.ii A summary of the strategy lenses

Slide 1.34
Chapter summary (1)
• Strategy is the long-term direction of an organisation. A
‘strategy statement’ should cover the goals of an
organisation, the scope of the organisation’s activities and
the advantages or capabilities the organisation brings to
these goals and activities.
• Corporate-level strategy is concerned with an
organisation’s overall scope; business-level strategy is
concerned with how to compete; and operational strategy
is concerned with how resources, processes and people
deliver corporate- and business-level strategy.
• Strategy work is done by managers throughout an
organisation, as well as specialist strategic planners and
strategy consultants.

Slide 1.35
Chapter summary (2)
• Research on strategy context, content and process
shows how the analytical perspectives of economics,
sociology and psychology can all provide practical
insights for approaching strategy issues
• The Exploring Strategy Model has three major elements:
understanding the strategic position, making strategic
choices for the future and managing strategy-in-action.
• Strategic issues are best seen from a variety of
perspectives, as exemplified by the four strategy lenses
of design, experience, variety and discourse.

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