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7/27/2019 02 Strategy Formulation
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Strategy F rmulation
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Strategic Man gement Model
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Levels of
Corporate Strategy Business Strategy Functional Strategy
strategies
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Corporate Strategy The corporate parent Corporate parenting
rationales Portfolio decisions Extent of diversity Management and control of
subsidiaries
BusinCompetiti
Bases of comstrategy
Sustainabilityadvantage
Competitionoperation
Strategies inhypercompet
conditions
Strategi
ess ore Strategy
petitive
of competitive
r co-
itive
Directions andMethods of
Development
Protect and build Market development Product development Diversification through
Internal development Acquisitions
Alliances Success criteria of
strategies
Choices
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What is the Strategiccen
(How does it seekbusin
Is the corpostyle app
What is the logic of the portfolio?
Four Key Questions
role of the corporatere?
o add value to thesses?)
What is the nature andextent of
diversification?
rate controlopriate?
f Corporate Strategy
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Potential Added Value Rol
Efficiency/leverage Expertise Investment and competence
Fostering innovation-coachin Mitigating risk Image/networks Collaboration/co-ordination/
Standards/performance asse Intervention (e.g. acquisition, dis Acting in a visionary capacity
es of the Corporate Parent
uilding
/learning
rokerage
smentosal, change agency)
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Corporat
Corporate strategy determines thefunctional areas of marketing, proddevelopment, and human resources
Corporate strategy determinebusiness, but also its resourceadvantages, and overall coord
Corporate strategy is used bycorporations.
Strategy
eans for utilizing resources in thection, finance, research andto reach the organizations goals.
not only the scope of thedeployment, competitive
ination of functional areas.ll organizations, not just
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Corporat
Corporate strategy planners are concorporate culture, competition, diff interrelationships between business
social issues. They attempt to match the re
opportunities and threats in t
They are also concerned withfirms business units so that tends desired.
Strategy
cerned with broad issues such asrentiation, diversification,units, and environmental and
ources of the organization with thee environment.
defining the scope and role of theey are coordinated to reach the
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Vis
A vision statement outlines what a ctomorrow; it is inspirational; it provi
Corporate vision is a short, succinct,the organization intends to becomefuture, often stated in competitive tof intentions that are broad, all-inclimage that a business must have of ithem. It describes aspirations for thmeans that will be used to achieve t
http://www.ic.gc.ca/epic/site/stco-levc.nsf/en/qw00046e.html
ion
ompany wants to be. It focuses ondes clear decision-making criteria.
and inspiring statement of whatand to achieve at some point in therms. Vision refers to the categorysive and forward-thinking. It is thets goals before it sets out to reachfuture, without specifying the
hose desired ends.
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Vis
Warren Bennis, a noted writer on le"To choose a direction, an executiveimage of the possible and desirable
This image, which we call a vision,precise as a goal or a mission state
Vision without action is a daydreamnightmare. - Japanese Proverb
ion
dership, says:must have developed a mentaluture state of the organization.
ay be as vague as a dream or asent.
Action without vision is a
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Mission S
A mission statement is an organizatiform. It makes concrete the leader'sof the organization. For many corpo
any attempt to motivate employeespriorities.
tatement
on's vision translated into writtenview of the direction and purposeate leaders it is a vital element in
and to give them a sense of
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Mission SA mission statement should be a shand priorities. In turn, goals are spetime periods and are stated in termbusiness is to increase stakeholder
stakeholders are shareholders whowork for the business, and clients oand/or services from the business.
http://www.1000ventures.com/business_guide/crosscuttings/vision_missi
tatementrt and concise statement of goalsific objectives that relate to specificof facts. The primary goal of any
alue. The most important
wn the business, employees whocustomers who purchase products
n_strategy.html
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Strategic Int
Strategic intent is a high-level staorganization will achieve its visiocreating a desirable future (statestrategic intent is your company'in the long term.
In complexity science's terms, strexploration rules into the next leexploration rules and the transitimigrate from its current design adesign and ecosystem.
ent Defined
ement of the means by which your. It is a statement of design forin present terms). Simply put, avision of what it wants to achieve
tegic intent is decomposition of el of detail, the linkages to then rules that define how it willd ecosystem to a future business
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Purpose of St
The logic, uniqueness and discovcome to life are vitally importantunderstand, believe and live acco
Strategy should be a stretch exerstrategic intent is to help individucommon intention to survive andthrough time and space
http://www.1000ventures.com/business_guide/crosscuttings/strategic_int
rategic Intent
ry that make your strategic intentfor employees. They have tording to it.
ise, not a fit exercise. Expression of als and organizations share thecontinue or extend themselves
nt.html
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Strategic
Broadly defined targets that an orgastrategy succeed. Strategic objectivand (according to Peter Drucker) fall
Market standing: desired sha Innovation: development of
and methods required to sup
Human resources: selection
Financial resources: identifictheir use;
bjectives
nization must achieve to make itss are, in general, externally focusedinto eight major classifications:
re of the present and new markets;ew goods and services, and of skills
ply them;nd development of employees;
tion of the sources of capital and
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Strategic
Physical resources: equipme Productivity: efficient use of Social responsibility: awaren
effects on the wider commu Profit requirements: achieve
being and growth.
http://www.businessdictionary.com/definition/strategic-objective.html
bjectives
t and facilities and their use;he resources relative to the output;ss and responsiveness to theity of the stakeholders;ent of measurable financial well
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Strategic and finStrategic objectives
A bigger market shareA higher, more secure industry rankHigher product qualityLower costs relative to key competitors
Broader or more attractive product linesA stronger reputation with customersSuperior customer serviceRecognition as a leader in technology and/orproduct innovationIncreased ability to compete in internationalmarketsExpanded growth opportunitiesTotal customer satisfaction
Source: Thompson and Strickland (1999) Strategic Management (9 th Ed.),
ancial objectivesFinancial objectives
Faster revenue growthFaster earning growthHigher dividendsWider profit margins
Higher returns on invested capitalStronger bond and credit ratingsBigger cash flowsA rising stock priceRecognition as a blue chip companyA more diversified revenue baseStable earnings during recessionary periods
p. 31.
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Strategic
Course of action that leads to the acorganization's strategy
http://www.businessdictionary.com/definition/strategic-direction.html
Direction
hievement of the objectives of an
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Organic & Inorgani
Organic growth means that the cown business activity and its own
While inorganic growth means thmerger, or take-over.
Growth Strategies
mpany itself has grown from itsresources
at the company has grown by
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Ansofs
Present
Present MarketPenetration
New MarketDevelopmen
Product
Market
model
New
ProductDevelopment
Diversification
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Growth Strategi
known as "product-mission matrix"matrix", the Ansoff Matrix remains aunderstand the risk component of vproduct versus market development
The matrix was first published in a 1diversification
Four strategies given in the matrix,existing product market share in exirequires the identification of new cuexpansion requires developing newdiversification requires new produc
(http://www.easy-strategy.com/igor-ansoff.html consulted on 17th November 2
s - Ansoff Matrix
r the "2 x 2 growth vector componentpopular tool for firms that wish torious growth strategies, including
, and diversification.57 article called 'Strategies for
arket penetration requires increasingting markets; market expansionstomers for existing products; productproducts for existing customers; ands to be produced for new markets.08)
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Growth Strategies-
Vertical integration is a type of relatof nearly total ownership and contrupstream suppliers and its downstreintegrated it is. Note, however, thatmeasure to denote this.
Vertically integrated companies arecommon owner. Usually each memdifferent product or service, and thecommon need. It is contrasted withpart of the production process is exsegments. A common successful horIntel (INTC) has dominated the comchips to several different manufactu(TOSBF) , and the Hewlett-Packard C
Vertical Integration
ed diversification that describes a stylel. The degree to which a firm owns itsam buyers determines how verticallyhere is no ratio or quantifiable
nited through a hierarchy and share aer of the hierarchy produces aproducts are combined to satisfy a
horizontal integration, in which oneanded across several different marketizontal integration example is howuter processor market, supplying such
rers, such as Dell (DELL) , Toshibaompany (HPQ) .
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Types of Verti
Vertical Integration comes in three f vertical integration, forward (downsbalanced (equal) vertical integration
Backward Vertical IntegrationThe company sets up subsidiaries thatproduction of its products. For exampletire company, a glass company, and a msubsidiaries is intended to create a stab
consistent quality in their final product.Ford and other car companies in the 19centralizing the production of cars and
al Integration
lavors: backward (upstream)ream) vertical integration, and.
roduce some of the inputs used in the, an automobile company may own aetal company. Control of these threele supply of inputs and ensure a
It was the main business approach of 20s, who sought to minimize costs byar parts.
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Balanced Vertical Integration The company sets up subsidiaries th
distribute their outputs.
If you view McDonald's (MCD), for emanufacturer, backwards vertical inown the farms where they raise thewell as the factories that processesForwards vertical integration wouldcenters for every area and the fast f integration would mean that they o
Types of Verti
http://www.wikinvest.com/wiki/Vertical_integration
at both supply them with inputs and
ample, as primarily a foodegration would mean that they wouldcows, chickens, potatoes and wheat asverything and turns it all into food.
imply that they own the distributionod retailers. Balanced verticaln all of the mentioned components.
al Integration
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Diversi
Diversification Defined as a strategy which take
current markets or products or c Related Diversification
Strategy development beyond cthe value system or industry in
Vertical Integration Describes either backward or for
activities in the value system
Horizontal Integration Development into activities whiccomplementary to, a companys
ication
the organization away from itsmpetences
rrent products and markets, but withinwhich the company operates
ward integration into adjacent
h are competitive with, orpresent activities
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Horizontal
Expansion via acquisition oadding outlets to a chain. F
publisher might acquire anincrease its stable of editorotherwise enhance its com
integration
f a competitor or byor example, a book
other publishing house tos and authors or topetitiveness.
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Raw materialsmanufacture
Raw materialssupply
Componentsmanufacture
Componentssupply
Transport
Competitiveproducts
Complementaryproducts
Distributionoutlets
Transport
Manufacturer
BackwardIntegration
HorizontalIntegration
ForwardIntegration
Related Diversification O
Machinerymanufacture
Machinery supply
Product/Processresearch/design
Financing
Marketinginformation
Repairs andservicing
By-products
tions for a Manufacturer
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Possible Advantages Examples/CommentsControl SuppliersQuantityQualityPrice
Tea processors own plantationsComponents for motor cars maPrinting facilities can be cheape
Control of Markets Manufacturers own retail outle
Access of Information Car manufacturer own credit secustomer preferences
Cost Savings Fully integrated steel plants sav
Building on:Core competencesQuality
Firm of accountants moving intPrecision engineering equipmetechnical requirement
Spreading Risk Avoids over-reliance on one pro
Resource Utilization Manufacturer acquiring compa
Parenting So the corporate parent can un
Reasons for Relat
to secure continuity of supplyneed to be manufactured by the company
r if in-house
s to gain guaranteed distribution
rvices, car hire firms and servicing firms to access information on
e costs of reheating and transport
tax advice or corporate recoveryt manufacturer in one market entering another with similar
duct or market, but builds on related experience
y for compatible products to fill capacity
erstand business units
ed Diversification
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Possible Advantages Examples/Com
Exploiting underutilisedresources and competences
Farmers use fieldLocal authorities
Escape from present business A companys prodiversification pr
Spreading Risk Some companieseggs in one bask
Even out cyclical effects in agiven sector
Toy manufactureindustry
Need to use excess cash orsafeguard profits
Buying a tax loss
Personal values or objectives of powerful figures
Personal image ldiversification
Reasons for Unrel
ents
s for camp sitesuse plastic waste for new materials
ucts may be in decline and unrelatedesents the only possible escape
believe that it is good sense not to have all theiret and so diversify into unrelated areas.
rs make subcontract plastic moulded products for
situation
cally or nationally may be a motive for high-profile
ted Diversification
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BCG
The market-growth/market-share(BCG) approach, is based on the philgrowth rate and its market share ardetermining its marketing strategy.
a) All the firms SBUs and prsingle, overall matrix andappropriate strategies forportfolio strategies.
b) Managers can use this mproducts expected futurrequirements.
odel
atrix , the Boston Consulting Grouposophy that a products marketimportant considerations in
ducts should be integrated into aevaluated to determineindividual products and overall
del to determine and classify eachcash contributions and future cash
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BCGRelative Mark
High
High STARS
Low Cash Cows
I n d u s t r y
S a
l e s
G r o w
t h R a
t e
( % )
odelt Share Position
Low
Questions Mark
Dogs
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BCG
The BCG, classifies a firms products
Stars have a high share of the magrowth; they use more cash thanadd capacity, and increase marke
Cash cows have a high share of tgrowth; typically they generatemaintain market share. Example:towels
odel-1
into four basic types:rket and good prospects forthey generate to finance growth,share. Example: Apples iPod
e market but low prospects forore cash than is required toProcter & Gambles Bounty paper
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BCG
Dogs have a low share of the mathese products are often found iGeneral Motors (now outdated)
Question marks , sometimes calleshare of a growing market and gecash to build market share. Exam
The long-term health of an organiza
products that generate cash (and pr that use cash to support growth.
odel
ket and low prospects for growth;established markets. Example:ldsmobile brand
d problem children, have a smallnerally require a large amount of le: Mercedes mountain bikes
tion depends on having some
ovide acceptable profits) and others
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Business
The next step in strategic planning idirections and develop strategies fo1. A strategic business unit (SBU) is
profit center within the parent corecognize the strategic performancarefully allocate resources amon
trategy-1
to determine future businessindividual business units.division, product line, or other
pany. Strategic planners shouldce capabilities of each SBU and
the divisions.
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Business
2. Several tools allow a firmbusiness units, or even inclassified and visually dis
attractiveness of variousrelative market share wit A market is a group of indiv
have needs for products inability, willingness, and autproducts.
The percentage of a marketproduct from a specific comproducts (or business unit
trategy-2
s portfolio of strategicividual products, to belayed according to the
arkets and the businesssin those markets.duals and/or organizations thatproduct class and have the
ority to purchase these
that actually buys a specificpany is referred to as that) market share .
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Defining Compe
Coulter (2002, p. 62) explains that PIndustrial Organisation view, whichfocuses on the structural forces
environment of firms, and how thesThis view proposes that getting and meant analysing the external forcesand actions what was found.
titive Advantage
rter (1985) developed the
ithin an industry, the competitive
influenced competitive advantage.keeping competitive advantageand then basing strategic decisions
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Defining Compe
Also, according to Coulter (2002, p.The Resource Based View (RBV) pr more important than industry struct
competitive advantage, and sees or collection of assets and capabilities.
itive Advantage
3)poses that a firms resources areure in getting and keeping
anisations as very different
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Relational View on C
Dyer and Singh suggests that counderstood by using a Relational
Traditionally Michael Porter's Ind
Resource-Based View is used to ureturns are achieved by organisatanalysing the relationship betweunderstanding if it is not restrictelearning, lowering transaction co
They identified various sources ofacilitating sub-processes and the
mpetitive Advantage
petitive advantages can also beView on Competitive Advantage.ustry Structure View or the
nderstand how above-normalions, but Dyer and Singh argue thatn organisations provides newd to studying benefits (e.g.ts, and pooling of resources) alone.
rents, and examined thepreserving mechanisms.
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The four sources of relational rentscan be represented as follows:1) Relation-specific assets
Duration of safeguards Volume of inter firm transacti
2) Knowledge-sharing routines
Partner-specific absorptive ca
Incentives to encourage trans
Relational View on C
nd their facilitating sub-processes
ns
acity
arency and discourage free riding
mpetitive Advantage
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3) Complementary resources and c
Ability to identify and evaluat Role of organisational comple
4) Effective governance Ability to employ self-enforce
enforcement governance mec
Ability to employ informal ver
governance
Relational View on C
pabilitiespotential complementaritiesentarities to access benefits
ent rather than third-party anismsus formal self-enforcement
mpetitive Advantage
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The new elements of the Relatiomechanisms that preserve the re
Organisations that are willing to i
able to produce above-normal resetting up joint production faciliti
Volkswagen and Ford did this aft
Relational View on C
http://www.boekestijn.org/1602789.htm
al View are found in thelational rents.
vest in relation-specific assets are
nts. A simple way to do this is byes.r looking to the European Market.
mpetitive Advantage
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Strategic Position & Act
Ma Its four quardrant framework indi
conservative, defensive or compappropriate for a given organizati
represents two internal dimensioCompetive Advantage (CA)] and t[Environmental Stability (ES) and
These four factors are most impoorganizations overall strategic po
ion Evaluation (SPACE)
rixcates whether aggressive,titive strategies are moston. The axes of the SPACE matrix
ns [Financial Strength (FS) andwo external dimensionsIndustry Strength (IS)]rtant determinants of ansition.
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+1
0
+2
+4
+3
+5
+6
-6
-5
-3
-4
-2
-1
0-1-2-3-4-5-6
FS
CA
ES
Conservative
Defensive
+1 +2 +3 +4 +5 +6IS
Aggressive
Competitive
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Quadrant II
1. Market development2. Market penetration3. Product development4. Horizontal integration5. Divestiture6. liquidation
Quadrant III
1. Retrenchment2. Related diversification3. Unrelated diversification4. Divestiture5. liquidation
WEAKCOMPETITIVE
POSITION
RAPID MARKE
SLOW MARKE
Quadrant I
1. Market development2. Market penetration3. Product development4. Forward integration5. Backward integration6. Horizontal integration
7. Related diversification
Quadrant IV
1. Related diversification2. Unrelated diversification3. Joint ventures
STRONGCOMPETITIVE
POSITION
GROWTH
GROWTH
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Di
Disposition or sale of an asset bydivest an asset which is not perfocompany's core business, or whicbuyer or as a separate entity tha
est
a company. A company will oftenrming well, which is not vital to theh is worth more to a potentialas part of the company.
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Typologies
Mintzbergs Deliberate Vs. Emerg Miles and Snows Typologies of S Porters Generic Strategies
Mintzbergs Generic Competitive Johnson and Scholes, The Strateg
f Strategies
ent Strategiesrategy
Strategiesic Lenses
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Deliberate Vs. E
Planned Strategy: Precise intentiona central leadership, and backed upsurprise-free implementation in ancontrollable, or predictable (to ensuthese strategies are highly deliberat
Entrepreneurial Strategy: Intentionunarticulated vision of single leader,opportunities; the organisation is uleader and located in protected nichstrategies are relatively deliberate b
ergent Strategies
are formulated and articulated byby formal controls to ensure theirnvironment that is benign,
re no distortion of intentions);.
exist as the personal,and so are adaptable to newder the personal control of thee in its environment; theseut can emerge too.
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Deliberate Vs. E
Ideology Strategy: Intentions exist as the corganisation, controlled through strong shaproactive vis--vis its environment; these s
Umbrella Strategy: A leadership in partial cstrategic targets or boundaries within whicproducts be high priced and at the technolactual products are to be is left to emerge);(the boundaries) and partly emergent (thebe called deliberate- emergent, in that theflexibility to manoeuvre and from patterns
ergent Strategies
llective vision of all the members of thered norms; the organisation is oftenrategies are rather deliberate.
ontrol of organisational actions definesothers must act (for example, that all new
gical cutting edge, although what theseas a result, strategies are partly deliberate
patterns within them): this strategy can alsoleadership purposely allows others thewithin the boundaries.
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Process Strategy: The leadership controls thired and so gets a chance to influence straetc.), leaving the actual content of strategydeliberate (concerning process) partly eme
deliberately-emergent.
Disconnected Strategy: Members are sub uorganisation and produce patterns in the stof , or in direct contradiction to, the centralat large; the strategies can be deliberate fo
Deliberate Vs. E
e process aspects of strategy (who getstegy, what structures they work within,to others; strategies are again partlyrgent (concerning content), and
nits loosely coupled to the rest of theream of their own actions in the absenceor common intentions of the organisationthose who make them.
ergent Strategies
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Consensus Strategy: Through mutual adjuspatterns that pervade the organisation in tintentions; these strategies are rather eme
Imposed Strategy: The external environmethrough direct imposition (say, by an outsidstrong stakeholder such as a government pthrough implicitly pre-empting or boundinthat must fly jumbo jets to remain viable);emergent, although they may be internalis
Deliberate Vs. E
Adapted from Mintzberg and Waters (1985, p. 270)
ment, various members converge one absence of central or commongent in nature.
nt dictates patterns in action, eithere owner by a strong customer or by assing legislation affecting the business) ororganisational choice (as in a large airlinehese strategies are organisationallyd and made deliberate.
ergent Strategies
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Miles and Sno
In their 1978 book Organization Str and Snow argue that different compcompanies decide to address three
entrepreneurial engineering (or operational) administrative problemsThe entrepreneurial problem is howmarket share. The engineering probimplement its solution to the entre
s Typologies
tegy, Structure, and Process, Milesany strategies arise from the wayundamental problems:
a company should manage itslem involves how a company shouldreneurial problem.
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Miles and Sno
The administrative problem consideitself to manage the implementatioproblems. Although businesses choproblems, Miles and Snow suggest tsimilar solutions. As a result, they pstrategic types of organizations:
prospectors defenders
analyzers reactors
s Typologies
rs how a company should structureof the solutions to the first twose different solutions to these
hat many companies developstulate that there are four general
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Miles and Snows T
StrategyProspectors Organisation seeks innovations
Demonstrates ability to survey dynfit the changing environmentFrequently and continually innovatiCompetitors are uncertain about a
Defenders Search for market stabilityProduce only a limited product lineSeek to protect (defend) their well-Do whatever is necessary to aggres
Can carve out and maintain nichespenetrate
pologies of Strategy
Characteristics
mic environment and develop new products-services to
ng, developing and testing new products-servicesProspectors future strategic decisions and actions
for a narrow segment of the total potential marketstablished business
sively prevent competitors from entering their turf
ithin their industry that competitors find difficult to
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StrategyAnalysers Strategy of analysis and imitati
Thoroughly analyse new businedeciding to jump in
Watch for and copy the promisiReactors Lack a coherent strategic plan
Simply react to environmentalMake strategic adjustments onlUnable to respond quickly to ecapabilities are lacking or are n
Miles and Snows T
Characteristicsnss ideas (products, services, markets) before
ng and successful ideas of prospectors
hangesy when finally forced to do sovironmental changes because resources andt developed or exploited properly
pologies of Strategy
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Porters Gen
CompetitiveScope
Broad Cost LeaNarrow Focus (C
ric Strategies
CompetitiveAdvantage
Low Cost Product-ServiceDifferences
dership Differentiationost) Focus (Differentiation)
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Support Differentiation Strategydifferentiation by product supposupport services provided by the
Quality Differentiation Strategy:strategy in which firms competeperformance at a comparable pristrategy pursue the superior proadvantage .
Mintzbergs Generic
The competitive strategy of t gives emphasis to the customerorganisation.
Differentiation by quality explains ay delivering higher reliability ande. The firms following this type of uct quality to gain the competitive
ompetitive Strategies
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Design Differentiation Strategy:differentiation by product designorganisations that compete on thproduct features and design conf this type of strategy try to give cufeatures and designs.
Undifferentiated: Finally, the unsituations in which an organisatio
when it deliberately follows a co
Mintzbergs Generic
he competitive strategy of can be used to describee basis of providing desirableiguration. Organisations followingstomers a variety of product
ifferentiated strategy explains then has no basis for differentiation or
ycat strategy.
ompetitive Strategies
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The Strate
Strategy as Design The design lens views strategy de
positioning of the organization thstructured and directive process.
Main theme : Deliberate positionstructured and directive processe Assumptions about organizations Role of top management: Strateg Implications for change: Change
strategy Underpinning theories: Economi
ic Lenses
velopment as the deliberaterough a rational, analytic,
ing through rational, analytic,s: Mechanistic, hierarchical, logicalic decision makers
implementation of planned
s; decision sciences
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The Strate
Strategy as Experience The experience lens views strategy develop
experience of individual and collective expeassumptions.
Individual Experience: Mental (or cognitive)
sense of their situation. Organizational Culture is the basic assumpti
an organization, that operate unconsciouslyand organizations view of itself and its envir
Organizational Fields are networked of relatassumptions, values and ways of doing thing
ic Lenses
ent as the outcome of individual and collectiveience to individuals and the taken-for-granted
models people build over time to help make
ns and beliefs that are shared by members of and define in a basic taken-for-granted fashiononment.
d organizations which share commons.
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The Strate
Strategy as Experience
Main theme: Incremental develoand collective experience and th
Assumptions about organizationlegitimacy and past success
Role of top management: Enacto Implications for change: Change
major change
Underpinning theories: Institutiopsychology
ic Lenses
pment as the outcome of individualtaken for granted
s: Cultures based on history,
rs of their experienceincremental with resistance to
nal theory; theories of culture;
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The Strate
Strategy as IdeasThe ideas lens sees strategy as the emethe variety and diversity which exist in
Main Theme: Emergence of order a
diversity in and around the organiza Assumptions about organizations:
diversity
Role of top management: Coachesideas
Implications for change: Change inc Underpinning theories: Complexity
ic Lenses
rgence of order and innovation fromnd around organizations.d innovation through variety and
ionomplex systems of variety and
creators of context and champions of
remental but occasionally suddenand evolutionary theories
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Strategy Development
Strategic Planning Systems
It can provide a structured meancomplex strategic problem
It can encourage a longer-term vi It can be used as a means of cont
performance and progress agains
It can be useful means of coordin
May also help to communicate in It can be used as a way of involvi
rocess in Organizations
of analysis and thinking about
ew of strategyrol by regularly reviewingt agreed objectivesation
ended strategyg people in strategy development
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Strategy Development
Strategic LeadershipStrategic leadership may be an indivwhom strategy development and ch
Organizational PoliticsThe political view of strategy develothe outcome of processes of bargaipowerful internal or external intere
rocess in Organizations
idual or a group of people uponange are seen to be dependent
pment is, that strategies develop asing and negotiation amongt groups (or stakeholders)
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Strategy Development
Logical IncrementalismLogical incrementalism is the delibelearning through doing
The Learning OrganizationThe learning organization is capablevariety of knowledge, experience anculture which encourages mutual qshared purpose or vision
rocess in Organizations
ate development of strategy by
of continual regeneration from thed skills of individuals within aestioning and challenge around a
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Intended and R
Intended StrategyAn expression of desired strategic diplanned by managers.
Realised StrategyStrategy actually being followed by
alised Strategies
rection deliberately formulated or
n organization in practice
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Para
A paradigm is the set of assumptiontaken for granted in an organization
igm
s held relatively in common and
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The ParadigmDevelopment of
Strategy
Step 2ReconstructNew Strateg
Step 3Abandon paradigm andadopt a new one
Source: Adapted from P. Grinyer and J-C. Spender, Turnaround :Managerial recipes for strategic success , Associated Business Press, 197
The Dynamics of
ImplementationCorporate
Performance
Step 1Tighter Control
or Developy
If unsatisfactory
9, p. 203.
Paradigm Change