1 Introducing Strategy Learning Outcomes 1 Understand the

1: Introducing Strategy

Learning Outcomes (1) £ Understand the characteristics of strategic decisions and what is meant by strategy and strategic management, distinguishing them from operational management £ Understand how strategic priorities vary by level: corporate, business, and operational £ Understand the basic vocabulary of strategy Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -2

Learning Outcomes (2) £ Understand the three key elements of the Exploring Corporate Strategy strategic management model £ Understand the kinds of people involved in strategy – managers, in-house specialists and strategy consultants – and the work they do Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -3

What is Strategy? Strategy is the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations. Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -4

Characteristics of Strategic Decisions £ Long-term direction £ Scope of an organisation’s activities £ Competitive advantage £ Strategic fit with business environment £ Organisation resources and competences £ Values and expectations of power players Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -5

Implications of Strategic Decisions £ Complexity £ Integration £ Uncertainty £ Relationships and networks £ Operational decisions £ Change Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -6

Levels of Strategy Corporatelevel strategy Business-level strategy Operational strategy Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -7

What is a Strategic Business Unit? A strategic business unit (SBU) is a part of an organisation for which there is a distinct external market for goods or services that is different from another SBU. Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -8

Vocabulary of Strategy £ Mission £ Strategic capability £ Vision £ Strategies £ Goal £ Business model £ Objective £ Control Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -9

Vocabulary of Strategy: Nokia £ Vision/Mission £Connecting is about helping people feel close to what matters. Wherever, whenever, Nokia believes in communicating, sharing, and in the awesome potential in connecting the 2 billion who do with the 4 billion who don’t. Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -10

Vocabulary of Strategy: Kingston University £ Mission £To promote participation in higher education, which it regards as a democratic entitlement; to strive for excellence in learning, teaching, and research; to realise the creative potential and fire the imagination of all its members; and to equip its students to make effective contributions to society and the economy. Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -11

What is Strategic Management? Strategic management includes understanding the strategic position of a organisation, making strategic choices for the future, and managing strategy in action. Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -12

Exhibit 1. 3 The Exploring Corporate Strategy Model Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -13

What is Strategic Position? Strategic position is concerned with the impact on strategy of the external environment, an organisation’s strategic capability and the expectations and influence of stakeholders. Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -14

Strategic Position Environment Capability The Strategic Position Purpose Culture Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -15

What are Strategic Choices? Strategic choices involve understanding the underlying bases for future strategy at both the business unit and corporate levels and the options for developing strategy in terms of both the directions and methods of development. Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -16

Strategic Choices Businesslevel Corporatelevel Strategic Choices Innovation International Evaluation Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -17

What is Strategy in Action? Strategy in action is concerned with ensuring that strategies are working in practice. Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -18

Strategy in Action Processes Structuring Strategy in Action Changing Exploring Corporate Strategy 8 e, © Pearson Education 2008 Resourcing Practice 1 -19

Research Approaches to Strategy Content Exploring Corporate Strategy 8 e, © Pearson Education 2008 Process 1 -20

Perspectives on Strategy Complexity Theory Discourse Strategy-as-Practice Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -21

Strategy Lenses £ Strategy as design £ Strategy as experience £ Strategy as ideas £ Strategy as discourse Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -22

Exhibit 1. i Design Lens Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -23

Exhibit 1. ii Experience Lens Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -24

Exhibit I. iv Idea Lens Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -25

Exhibit I. v Discourse Lens Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -26

Chapter Summary £ Strategy as direction and scope of an organisation over the long term £ Strategic decisions made at multiple levels in an organisation £ Strategic position, strategic choices, and strategy in action as the major elements of strategic management £ Two primary streams include strategy content and strategy process £ Strategy is a kind of job £ Strategic issues best seen through several lenses Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -27

Case Example: Electrolux (1) Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -28

Case Example: Electrolux (2) £ Why are the issues facing Electrolux strategic? £ What levels of strategy can you identify? Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -29

Case Example: Electrolux (3) £ Review the strategic choices Electrolux has? £ What are the main issues that might determine the success or failure of Electrolux’s strategies? Exploring Corporate Strategy 8 e, © Pearson Education 2008 1 -30