Introducing Strategy and Strategic Management

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Introducing Strategy and Strategic Management

• Lecture 2 - Business Strategy

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Learning Outcomes

• Understand characteristics of strategic thinking
  and strategy development processes
• Explain how strategic priorities vary by
  organisational level
• Understand strategic management in different
  commercial contexts
• Explain fundamental facets of the strategic
  management process

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Levels of Strategy/Strategic Thinking

• Corporate - allocation of resources among various
  divisions
• Business - dealing primarily with competitive
  positioning
• Functional - limited to the actions of the
  specific function
• (Hofer Schendel, 1978)

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Strategy-Making Pyramid in Diversified Company
(Thompson Strickland, 1998, p. 45)
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Strategy Development Process

• Analysis - external and internal environment
• Formulation - mission and policies
• Implementation - structure, systems, culture
• Adjustment/Evaluation - cycle to earlier steps
• (source Pitts and Lei, 1996, pp. 9 -11)

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Mission (Johnson and Scholes, 2002)

• overriding purpose of an organisation
• raison detre
• vision, intentions and aspirations, main
  activities, key values

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Mission Influenced By

• company history
• preferences, values and expectations of those in
  power
• environmental factors
• resources available
• distinctive competencies
• (source Wilson and Gilligan, 1997, p. 207
  Johnson and Scholes, 1988, p. 37)

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Power of Influence on MissionManagersEmployees
SuppliersCustomersGovernmentShareholdersPartne
rsSociety(as illustrated in Superdrug Plc case)
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Strategic Thinking, Decision Making and Problem
Solving

• Strategic Analysis/Position
• Strategic Choice
• Strategic Implementation
• (Johnson and Scholes, 2002)

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Strategic Position

• the environment
• resources and competencies
• expectations and purposes

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Strategic Choices

• corporate level strategies
• business level strategies
• development, directions and methods

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Strategy into Action

• managing change
• enabling
• organising

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Corporate Level Issues

• purpose and scope
• add value to shareholder investment
• resource allocation between SBUs
• structure and control of SBUs
• corporate financial strategy

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Business Unit Issues

• competitive strategy
• developing market opportunities
• developing new products and services

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Operational Issues

• integration of resources, processes, people and
  skills
• implementing strategy

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Strategy in Various Contexts

• SME - expectations of owner competitive
  positioning
• Multi-National - product/geographic scope
  portfolio decisions corporate structure and
  control

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Strategy in Various Contexts

• Public Sector - stakeholder influences (e.g.
  govt.) competition for resources
• Professional Services - expectations of
  professional bodies influence of partners
  increasingly, competitive positioning

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Summary

• characteristics of strategic thinking
• strategic priorities vary by organisational level
• need mission
• strategic management in different commercial
  contexts
• fundamental facets of the strategic management
  process