Ch01
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The document outlines key concepts in strategic management including: 1. It discusses different frameworks for analyzing strategy including understanding the environment, assessing resources, setting goals, and effective implementation. 2. It describes the evolution of strategic management from an emphasis on planning to a focus on positioning, competitive advantage, and reconciling flexibility with control. 3. It presents Mintzberg's critique of formal strategic planning and argues that strategy emerges through a process rather than being fully designed in advance.
Ch01
- 1. PRESENTATION SLIDES T o a ccompany : Contemporary Strategy Analysis ( 6 th edition, Blackwell Publishing, 2008 ) Robert M. Grant Assisted by Kate Grant
- 2. The Concept of Strategy The role of strategy in success A framework for strategy analysis The evolution of strategic management Corporate strategy and business strategy Strategy making: Design or process? The role of strategy OUTLINE
- 3. Components of Success Clear delineation of individual roles. Alignment of incentives with team goals. Nurturing esprit de corp Tight control. Long-term commitment. Effective propaganda. Inspirational leadership. Commitment and discipline. Charismatic leadership. Team building. Attention to detail. IMPLEMENT- ATION Systematic development of individual stamina and team capabilities Recognized economic and military weaknesses and core political strengths Recognized limited raw talent. Exploited strengths in self-promotion, product development & relationship management RESOURCE APPRAISAL Diagnosis of the physical, psychological and strategic determinants of individual and team performance Intimate knowledge of terrain Understanding U.S. political system. Identified emerging trends in popular culture. Understood key success factors in showbiz UNDER-STANDING THE E NVIRONMENT Winning the Tour de France Reunification of Vietnam under Communist rule. Single-minded quest for stardom. GOALS LANCE ARMSTRONG GIAP & NORTH VIETNAMESE MADONNA
- 4. Successful Strategy Long-term, simple and agreed objectives Profound understanding of the competitive environment Objective appraisal of resources What Makes a Successful Strategy? EFFECTIVE IMPLEMENTATION
- 5. What is Strategy? Distinguishing strategy from tactics : Strategy is the overall plan for deploying resources to establish a favorable position. Tactic is a scheme for a specific maneuver. Characteristics of strategic decisions: Important. Involve a significant commitment of resources. Not easily reversible.
- 6. The Evolution of Strategic Management DOMINANT THEME 1950s 1960s-early 70s Mid-70s-mid-80s Late 80s –1990s 2000s Budgetary Corporate Positioning Competitive Strategic planning & planning advantage innovation control Financial Planning Selecting Focusing on Reconciling control growth &- sectors/markets. sources of size with diversification Positioning for competitive flexibility & leadership advantage agility Capital Forecasting. Industry analysis Resources & Cooperative budgeting. Corporate Segmentation capabilities. strategy. Financial planning. Experience curve Shareholder Complexity. planning Synergy Portfolio analysis value. Owning E-commerce. standards. — Knowledge Management— Coordination Corporate Diversification. Restructuring. Alliances & & control by planning depts. Global strategies. Reengineering. networks Budgeting created. Rise of Matrix structures Refocusing. Self -organiz systems corporate Outsourcing. ation & virtual planning organization MAIN ISSUES KEY CONCEPTS& TOOLS MANAGE-MENT IMPLIC- ATIONS
- 7. The Basic Framework Strategy: the Link between the Firm and its Environment THE FIRM • Goals & Values • Resources & Capabilities • Structure & Systems THE INDUSTRY ENVIRONMENT • Competitors • Customers • Suppliers STRATEGY STRATEGY
- 8. Sources of Superior Profitability RATE OF PROFIT ABOVE THE COMPETITIVE LEVEL How do we make money? INDUSTRY ATTRACTIVENESS Which businesses should we be in? COMPETITIVE ADVANTAGE How should we compete? CORPORATE STRATEGY BUSINESS STRATEGY
- 9. Strategy Making : Design or Process? Strategy as D esign Planning and rational choice INTENDED STRATEGY M any decision makers responding to multitude of external and internal forces REALIZED STRATEGY EMERGENT STRATEGY Strategy as P rocess Mintzberg’s Critique o f Formal Strategic Planning: The fallacy of prediction – the future is unknown The fallacy of detachment -- impossible to divorce formulation from implementation The fallacy of formalization --inhibits flexibility, spontaneity, intuition and learning.
- 10. Strategy Making Processes within the Company: Multiple Roles of Strategy Strategy as Decision Support Strategy as Coordination and Communication Strategy as Target Improves the quality of decision making Creates consistency and unity Improves perform- ance by setting high aspirations
- 11. The Role of Analysis Strategy analysis improves decision processes, but doesn’t give answers. Strategy analysis assists us to identify and understand the main issues. Strategy analysis helps us to manage complexity. Strategy analysis can enhance flexibility and innovation by supporting learning.