Introduction to Strategy

Learning Objectives

I.What is strategy?
i. Examine the concept of strategy through the lens of the:

i. Planning school

ii. Configuration school

iii. Positioning school

iv. Emergent school (Mintzberg’s 5 Ps)

ii. What are the implications of each conceptual frame to business planning in today’s global
environment?

© 2013 Berlin Asong. All rights reserved. 2

Learning Objectives
II. Examine the nature of strategy in:
i. Profit organisations

ii. Not-for-profit organisations

iii. Single product or service organisations

iv. Multiproduct organisations

v. Social media organisations with respect to influences such as organisational goals, stakeholders’
expectations, competitive environment and challenges.
III. Analyse different levels of organisational strategy.
i. Distinguish between corporate strategy, business unit strategy, functional strategy and tactic.

ii. Evaluate the degree of strategic alignment between them, whether such alignment improves or
hinders organisational effectiveness.

You are now doing a business course.
Why a business course? Why do the
course with XYZ University? How will
your grades fit with your aspirations?


Describe your life? What
makes your life different from
your peers’? Is it the same as it
was five years ago?


How do I become a
successful person?


How do I
become this person
or that person?


Your answers to the
preceding questions border
on the subject of strategy.


Pause for a moment…

What is
strategy?

…compare your
definition with the
following definitions.


Strategy is the determination
of the basic long-term goals and
objectives of an organization…

Alfred Chandler, 1962


…and the adoption
of courses of action…



…and the allocation of
resources necessary for
carrying out these goals.



Managers determine the firm’s long-term goals…
Strategy analysis

Taking stock of the…

PESTEL forces.


…enables managers to spot
market opportunities & threats.


Managers design how to achieve the firm’s goals…
Strategy formulation

Managers allocate resources for achieving the firm’s goals…
Strategy execution


Strategy is
the direction
& scope of an
organisation
over the long
term…


…through its configuration of
resources and competences with
the aim of fulfilling stakeholder
expectations.
Johnson, Scholes & Whittington; Exploring Corporate Strategyy; 2008


Employees Investors

Suppliers/distributors

Consumers

Organisation

Government/Regulators
Communities


Strategy is about being
unique…choosing a
unique position.
Michael E. Porter


Strategy involves performing different activities than rivals’, or
performing similar activities in a different way, defining a unique
position, making clear trade-offs and tightening fit.
Michael E. Porter


Strategy is a pattern
in a stream of decisions
and actions.
Henry Mintzberg, 1979


2003

2013

…shaped by forces
within and out of the
control of managers.

Why is there
no standard
meaning of
strategy?


1

It’s a vocabulary
that is tritely misused.


Examples

“Our strategy
is to deliver top line
and margin growth”.

© 2013 Berlin Asong. All rights reserved.

Examples

Our strategy is
to “be the best.”


Examples

“Our strategy is to create
sustainable shareholder value by
growing our operations
organically and through
acquisitions.”


Examples

“Our strategy is to transform the
company from a traditional, high-volume
product wholesaler, to a next generation
communications products wholesaler
and managed solutions provider.”


2

It’s a vocabulary connoted
by researchers & practitioners
to satisfy an agenda.


3

Strategy is a
borrowed vocabulary…


Comes from the Greek word...

strategia

…meaning

art of war.

…which is

to cleverly win a war.


Therefore…

Strategy is the means
by which an organisation
achieves its goals. Berlin Asong, 2008


The Planning, Configuration, Positioning, & Emergent
schools’ definitions are distinct parts of the same subject called…

STRATEGY .
Henry Mintzberg, 1979


Mintzberg’s 5Ps for Plan
explaining strategy.
Perspective Ploy

Henry Mintzberg, "Five Ps for Strategy" in The Strategy Process, pp 12-19, H Mintzberg
and JB Quinn eds., 1992, Prentice-Hall International Editions, Englewood Cliffs NJ.
Position Pattern


Plan

Designed intentions
for achieving articulated
outcomes.


Ploy

Specific actions
used to outrun the
competition.


VRIN-(ORK) Framework
Valuable

Renewable Rare

Resources
Organisation

Knowledgeable Inimitable

Non-
substitutable

Increasing the barrier
of industry entry as
did Ryanair between
2002 and 2004.

ERE O’Higgins, (2005), “Ryanair : The Low Fares Airline”, Case no. 305-066-1, University
College Dublin, Ireland, p. 14


It could be a
strategic
alliance. 52

What’s the ploy behind
Google’s acquisition of
Motorola Mobility (Aug 2011)?


Pattern

Intended
Strategy
Deliberate Realized
Strategy Strategy

Unrealized Emergent
Strategy Strategy Henry Mintzberg, 1979


1976

2013

A pattern in a stream
of actions and decisions.

Position

A unique position that
aligns the firm’s competences
with its environment.


…it’s about not doing
everything for everybody.


Take Apple’s
iPhone. There are
50 reasons to
dislike the iPhone
yet it trumps the
competition in
many ways.


Perspective

How the firm perceives
itself and the world, and the
influence of that on strategy.


Is Apple a software or
hardware company? Does
it see itself as such?


From Apple Computer to
Apple. Why? How does that
redefine the culture and
direction of the company?


Perspective
gives personality
to strategy.


Features of Strategy
It has a direction & scope
It operates in an environment
Has short-term & long-term orientations
It involves seeking “competitive” advantage
It could (and may not) be known in advance
Configuration of resources | competences
Driven by the attainment of goals
It’s an ongoing process
Stakeholders’ benefits
Noticeable pattern


STRATEGY IN DIFFERENT
ORGANISATION TYPES


Discuss the nature of
strategy in these organisations:
Home Office
Facebook
Goldman Sachs
MacMillan Cancer Support
Your university or college
Small family-sized firm
News Corporation
McDonald’s
Apple Inc.
L’Oreal

Use the framework below
to focus your discussion:

Purpose Stakeholder(s) Competitive Challenges
Environment.


Public Service Organisation

Environment.


Publicly traded organisation

Environment.


Tourism Company

Environment.


Charity Organisation

Environment.


Social media Organisation

Environment.


Multi-products organisation

Environment.


Small family-sized firm


Environment.


Multi-national organisation

Environment.


LEVELS OF STRATEGY
IN ORGANISATIONS


Corporate Strategy

Business Level
Strategy

Functional Strategy

Other sub-strategies


Corporate Strategy

A term used to describe the long-term
plan of a large organisation.


Characteristics of Corporate strategy:

Long-term planning efforts.
May affect the entire organisation.
Made by top or mid-level executives.
Involve huge capital investment.
May take years to get results.

Examples
Entering a new market
Exiting a market
Opening new stores
Acquiring other firms
Partnering with suppliers
Leadership change
Etc.

Ford’s 2005 Turnaround Plan Affects the Entire Organisation.
Six year on, the benefits of the plan is yet to materialise fully.


Business unit Strategy

A term used to describe
the long-term plan of a subsidiary
division of an organisation.


Corporate Strategy

Business Level
Strategy

Functional Strategy



Corporate Strategy

Business units Strategy

Functional Strategy



Corporate Strategy

Business units Strategy Americas Europe Asia-Africa

S-Business units Strategy

Operational Strategy



Characteristics of Business unit strategy:

Long-termplanningefforts.
Affectstheentiredivision.
Madebydivisional-levelexecutives.
Maybeaffectedbycorporate-levelstrategy
Involvehugecapitalinvestment.
Maytakeyearstogetresults.

Functional Strategy

A term used to describe
plans designed & carried out by
functional departments of an
organisation.


Marketing Finance Operations

Manufacturing HRM R&D

Administration IT PR


Corporate Strategy

Business Level
Strategy

Functional Strategy



Characteristics of Functional unit strategy:

Affectstheentiredepartment&division.
Short-termtolong-termplanningefforts.
Madebydivisional&functionallevelexecutives.
Affectedbycorporate-level&divisionalstrategies.
Maybereactivetochangingbusinessenvironment.
Mayinvolvehugecapitalinvestment.
Takemonthstogetresults.
Maybereactiveinnature.

Tactics

The daily actions & decisions
that drive the organisations
towards its short-term, medium & long-term goals.


Characteristics of Tactics:

Dailyorweeklydecisions.
Areusuallyreactiveinnature.
Aimstogetimmediateresults.
Takeweeksormonthstogetresults.
Usually,madebymid-/lowlevelmanagers.
Reactiveinnature.


Corporate level Tactics

Business level Tactics

Marketing Tactics

HRM Tactics

Production Tactics

R&D Tactics


Modifying
the package
of products.


Sales promotions


How are these
tiers of strategies
interrelated?


Corporate Plan

Business units Plan

Functional Plan

Other sub-plans


Functional
strategy

SBU
strategy

Corporate
strategy


Functional
strategy

Tactics

SBU
strategy Tactics

Corporate
strategy
Tactics

Tactics

Tactics Tactics Tactics
Tactics


Must these tiers of
strategies be aligned
with each other?


In principle, various
organisational plans ought to
be aligned with one another.


…in practice, not always the
case. Misalignment can cause
problems in the long-term.
Browne, S. & Cuddihy, L. (2011), “Questioning the Currency of Marketing Planning Today”.
Irish Marketing Review, vol. 21, no. 1/2, p. 49


Corporate Plan

Business units Plan

Marketing Plan

Other sub-plans


Introduction to Strategy

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