Intro Strat Mgmt 2012

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Welcome to

BSP028 Strategic Management

Dr Angelika Zimmermann


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Evacuation in case of fire

Evacuation procedure

Location of the fire assembly point


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The Module: Aims To develop a critical understanding of the concepts

involved in strategic management and theirapplication in the private and public sectors

To develop skills in the area ofstrategic analysis,the development of strategic options and the

implementation of strategy To encourage a positive attitude to change, with a

desire for excellence and a visionary and positiveapproach to future developments

To encourage an openness to new ideas and anawareness of alternatives

To develop skills in obtaining, analysing andapplying information from a variety of sources


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Lecture Topics

Introduction to Strategic Management

1. Analysing the Environment2. Strategic Capability

3. Corporate Governance

4. Business Level Strategy

5. Corporate level strategy

6. Evaluating Strategies7. Strategy implementation

8. Strategic Leadership

9. Organisation Structure and Design

10. The Cultural Context

11. Business Ethics and Corporate Responsibility12. Managing Strategic Change


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Main Textbooks

Johnson, G., Whittington, R. and Scholes, K., (2011)

Exploring Corporate Strategy. Enhanced Media Edition

(with student access kit) (9th ed.) Prentice Hall: London

Website address: www.pearsoned.co.uk/ecs7

Lynch, R. (2006) Corporate Strategy (4th ed.). Prentice

Hall: London

Finlay, P. (2000) Strategic Management. Prentice Hall:

London

Grant, R.M. and Jordan, J. (2012) Foundations of

Strategy. Wiley: Chichester
http://www.pearsoned.co.uk/ecs7http://www.pearsoned.co.uk/ecs7


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Methods

Teaching approach Assessment

see Reading list on learn


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Introduction to Strategic Management

Intended learning outcomes

To develop an understanding of the definitions

and functions of strategic management

To distinguish between prescriptive and

emergent approaches to Strategy To be aware of factors affectig the strategies of

different types of organisations

To take into account prominent contemporary

issues when analysing strategy


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What is a Strategy?

Greek Strategia = The art ofleading an army(stratos=army; agein=tolead)

But: Strategy is nowadaysnot in the hands of topleaders alone

No single agreed definition

General def.: The means toachieve the organisationspurpose and objectives


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Quotes

The flame of competition has changed from smokeyyellow to intense white heat. For companies to

survive and prosper they will have to have a vision,a mission and strategy.Peter Ellwood, CEO Lloyds TSB Group

Far too many companies either have no goals at all,other than cost reduction, or their boss hides them

in his head. Theres no hope for companies inBritain unless more top management accepts the

need for a widely communicated set of clearobjectives.Peter Beck, ex-Chairman, The Strategic Planning Society(adapted from Thompson & Martin, p.7)


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Strategic terms

Mission Overriding purpose (e.g., What business are we in?)

Vision Desired future state

Goals

General statement of purpose or aim Objective

More precise statement of the goal

Strategic capability Resources, activities and processes

Strategies Means to achieve purpose and objectives (paths,

decisions)

Long-term direction of the organisation


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Definitions (1)

Corporate strategy is the pattern of major

objectives, purposes or goals and

essential policies or plans for achieving

goals, stated in such a way as to define whatbusiness the company is in or is to be in and

the kind of companyit is or is to be. (Andrews,1971; Lynch, 2003)


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Definitions (2)

Strategy is the direction and scope of an

organisation over the long term, which

achieves advantages in a changing

environment through its configuration ofresources and competences with the aim of

fulfilling stakeholder expectations. (Johnson etal., 2005)


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Illustration: British Airways (1)

How do mission, goals, and strategiesof BA differ from those of other

airlines you know?

Johnson et al., p. 14
http://images.google.co.uk/imgres?imgurl=http://www.2747.com/2747/world/airline/britishairways.jpg&imgrefurl=http://www.2747.com/2747/world/airline/britishairways.htm&h=768&w=1024&sz=360&hl=en&start=1&tbnid=ggLGMXjhtmOJsM:&tbnh=113&tbnw=150&prev=/images%3Fq%3Dbritish%2Bairways%26gbv%3D2%26svnum%3D10%26hl%3Den%26sa%3DG


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Illustration: British Airways (2)

Chairmans report 2010:

,We are in the grip of a devastating global

economic downturn and the next year will be

extremely difficult for us. In times of crisis, it isessential that we keep our sights fixed on the

future. That is why we are continuing with our

plans to firmly establish British Airways as a high

performing, market-focused, global premium

airline.
http://images.google.co.uk/imgres?imgurl=http://www.2747.com/2747/world/airline/britishairways.jpg&imgrefurl=http://www.2747.com/2747/world/airline/britishairways.htm&h=768&w=1024&sz=360&hl=en&start=1&tbnid=ggLGMXjhtmOJsM:&tbnh=113&tbnw=150&prev=/images%3Fq%3Dbritish%2Bairways%26gbv%3D2%26svnum%3D10%26hl%3Den%26sa%3DGhttp://images.google.co.uk/imgres?imgurl=http://www.2747.com/2747/world/airline/britishairways.jpg&imgrefurl=http://www.2747.com/2747/world/airline/britishairways.htm&h=768&w=1024&sz=360&hl=en&start=1&tbnid=ggLGMXjhtmOJsM:&tbnh=113&tbnw=150&prev=/images%3Fq%3Dbritish%2Bairways%26gbv%3D2%26svnum%3D10%26hl%3Den%26sa%3DG


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Levels of strategy

Corporate strategy What business the company should be in

How value will be added to the different parts

Business-level strategy (Strategic business unit)

How to compete successfully in particular markets

Operational strategies

How the component parts of the organisation can

effectively deliver the corporate- and businesslevel

strategies (resources, processes, people)


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Exhibit 1.3 The Exploring Corporate Strategymodel


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What is Strategic Management? The processby which organisations determine their

purpose, objectivesand desired levels ofattainment, decide on actions for achieving theseobjectives in an appropriate timescale and frequentlyin a changing environment; implement the actions;and assess progress and results.(Thomson & Martin, 2005)

Elements:

Understanding the strategic posi t ionof anorganisation;

Making strategic cho icesfor the future;

Turning strategy in to act ion

-Both art and science (business judgement, values,speculation) -


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Prescriptivevs.EmergentApproach(Mintzberg, 1987; Quinn, 1980)

The future can be

estimated

Long-term strategic

plan> Develop strategy first,

then implement it

The future is uncertain

Complete strategic plan

not useful

> Experiment: developand implement strategy

iteratively


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Strategic Management in different

contexts

Small businesses

International corporations

Manufacturing and service organisations

Public sector

Not-for-profit organisations


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Small businesses

Single or limited amount of

markets, products/services Strategy made by less

people (no dept. forstrategic analysis)

Competitive strategy andcapability especiallyimportant

Legacy of foundersexpectation may persist

Private ownership, limitedfinances

> limited choice ofstrategies


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Multinational corporations

Diverse products andmarkets

Stronger market position

Issues: Structure and control

Relationships betweenbusinesses and corporateparent

Competition betweenbusiness units for resources

Logistics of distributedoperations

Global scale economies vs.local market identity
http://images.google.co.uk/imgres?imgurl=http://images.businessweek.com/ss/06/01/big_outsourcers/image/intro.gif&imgrefurl=http://images.businessweek.com/ss/06/01/big_outsourcers/source/1.htm&h=437&w=440&sz=61&hl=en&start=13&tbnid=ENySLctR4Uer5M:&tbnh=126&tbnw=127&prev=/images%3Fq%3Dmultinational%2Bcompanies%26gbv%3D2%26svnum%3D10%26hl%3Den


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Manufacturing and service organisations

Competitive advantage

through quality of

productversus service

But: good service iscompetitive advantage

for selling products
http://images.google.co.uk/imgres?imgurl=http://www.bbc.co.uk/schools/gcsebitesize/img/gcsechem_75.jpg&imgrefurl=http://www.bbc.co.uk/schools/gcsebitesize/chemistry/usefulproductsair/ammonia_haberrev2.shtml&h=380&w=315&sz=25&hl=en&start=1&tbnid=2SVw-Z8zHj4r0M:&tbnh=123&tbnw=102&prev=/images%3Fq%3Dproduction%2Bplant%26gbv%3D2%26svnum%3D10%26hl%3Denhttp://images.google.co.uk/imgres?imgurl=http://www.indiancallcenterz.com/img/telemarketing_agent.jpg&imgrefurl=http://www.indiancallcenterz.com/outbound_service.php&h=237&w=175&sz=33&hl=en&start=9&tbnid=6nst9o1GG7JSeM:&tbnh=109&tbnw=80&prev=/images%3Fq%3DCall%2Bcenters%26gbv%3D2%26svnum%3D10%26hl%3Den


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Public sector

Ideology more important More outside control (e.g., government,

political agenda rather than market)

Strategy dictated by provider of funds ratherthan user of service

Competition for funds rather than customers
http://images.google.co.uk/imgres?imgurl=http://www.supportal.org.uk/UploadedImages/NHS_logo.jpg&imgrefurl=http://www.supportal.org.uk/ASPScripts/NewsItem.asp%3FNewsId%3D645&h=286&w=705&sz=21&hl=en&start=1&tbnid=PALs4FbXqZosrM:&tbnh=57&tbnw=140&prev=/images%3Fq%3Dnhs%26gbv%3D2%26svnum%3D10%26hl%3Denhttp://images.google.co.uk/imgres?imgurl=http://www.thomaston.lib.me.us/imagestpl/welcome.jpg&imgrefurl=http://www.thomaston.lib.me.us/&h=338&w=450&sz=41&hl=en&start=15&tbnid=mXyz7WgjELRRBM:&tbnh=95&tbnw=127&prev=/images%3Fq%3Dpublic%2Blibrary%26gbv%3D2%26svnum%3D10%26hl%3Denhttp://images.google.co.uk/imgres?imgurl=http://www.quickonthenet.com/2005/4166/pix/gallery/Logo-Illustration-Post-Office.jpg&imgrefurl=http://norfolkblogger.blogspot.com/2007_03_01_archive.html&h=400&w=559&sz=137&hl=en&start=9&tbnid=Mn1TD90GjTIyRM:&tbnh=95&tbnw=133&prev=/images%3Fq%3Dpost%2Boffice%26gbv%3D2%26svnum%3D10%26hl%3Den


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Not-for profit sector

Ideology of central strategic importance Competition for funds

Different expectations of funding bodies
http://images.google.co.uk/imgres?imgurl=http://www.japaneselifestyle.com.au/travel/images/nara_todaiji.jpg&imgrefurl=http://www.japaneselifestyle.com.au/travel/nara_todaiji.htm&h=271&w=480&sz=37&hl=en&start=1&tbnid=p3oS38E5tMvDVM:&tbnh=73&tbnw=129&prev=/images%3Fq%3Dbuddhist%2Btemple%26gbv%3D2%26svnum%3D10%26hl%3Den%26sa%3DGhttp://upload.wikimedia.org/wikipedia/en/thumb/1/17/Matthias_Church_budapest.jpg/300px-Matthias_Church_budapest.jpghttp://images.google.co.uk/imgres?imgurl=http://81.89.141.215/liftco-mast/admin/websites/images/Help%2520the%2520Aged.JPG&imgrefurl=http://81.89.141.215/liftco-mast/websites/&h=384&w=512&sz=19&hl=en&start=1&tbnid=y7oOKWNLCAet3M:&tbnh=98&tbnw=131&prev=/images%3Fq%3Dhelp%2Bthe%2Baged%26gbv%3D2%26svnum%3D10%26hl%3Denhttp://images.google.co.uk/imgres?imgurl=http://z.about.com/d/healing/1/0/2/r/2007_greenpeace.jpg&imgrefurl=http://healing.about.com/od/healernetwork/ig/Calendars/Earth-Calendar.htm&h=500&w=500&sz=56&hl=en&start=1&tbnid=r8i0zkYHKxF1EM:&tbnh=130&tbnw=130&prev=/images%3Fq%3DGreenpeace%26gbv%3D2%26svnum%3D10%26hl%3Den


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Contemporary issues (1)

Internationalisation

Increases size of markets and range of competitors

Have to organise activities across borders

E-commerce: effect on strategic position Changes customer expectations

Easier access to competitors


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Contemporary issues (2)

Knowledge and learning

Fast-moving world > continuous learning is

necessary

Need to create knowledge from inside and outside(R&D)

Have to challenge the status quo, be innovative


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Assignment: IKEA case

5000 words

including supporting, charts, diagrams and tables,

but without references.

Read assignment guidelines! Hand in date 17th August 2012, 2pm

Submit a printed copy to MSc office, plus an

electronic version on Learn system


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Assignment: IKEA case

Complete the following tasks: Describe IKEAs main strategies and

evaluate them with regard to their

suitability. Use your evaluation to explainIKEAs successes and difficulties in the

past and present, and to contemplate its

potential successes and difficulties in

the future.

Documents

Intro Strat Mgmt 2012