Written Analysis

Article: Are you sure you have a Strategy? By Donald Hambrick and James Fredrickson

Name: Reshmi Mahesh Kumar

1) As per the article, strategy has become a catch all term used to mean whatever one wants it
to mean.
 Catch all - A term or category that encompasses a variety of different elements.

2) Tools for analysing a strategy (however, no guidance on how to use the tools);
 Five-forces analysis
 Core competencies
 Hyper competition
 The resource-based view of the firm
 Value chains, and a host of other analytical tools

 Porter’s 5 forces analysis – strategy as a matter of selecting industries and segment within
them

Threat of Entry

Bargaining Bargaining
power of Industry Rivalry power of buyers
suppliers

Threat of
substitutes

 Executives using coopetition or other game theories see their world as set of choices to deal
with adversaries and allies
 Coopetition - Collaboration between business competitors, in the hope of mutually beneficial
results.
 Game Theory – A theoretical framework for conceiving social situations among competing
players.
3) What is not Strategy?
Strategy is not pricing. It is not capacity decisions. It is not setting R&D budgets. These are
pieces of strategies and cannot be decided—or even considered—in isolation.

4) When executives call everything strategy, and end up with a collection of strategies, they
create confusion and undermine their own credibility. They especially reveal that they don't
really have an integrated conception of the business.

5) A strategy consists of an integrated set of choices, but it isn't a catchall for every important
choice an executive face. Without a strategy, time and resources are easily wasted on
piecemeal, disparate activities; mid-level managers will fill the void with their own, often
parochial, interpretations of what the business should be doing; and the result will be a
potpourri of disjointed, feeble initiatives.
 Parochial - Having a limited or narrow outlook or scope.

6) The company's mission and objectives guide strategy. Having said that, strategy is not a
simple linear process – great strategists are iterative, loop thinkers. The key is not in
following a sequential process, but rather in achieving a robust, reinforced consistency
among the elements of the strategy itself.

7) There are five elements of strategy;

 Arenas: where will we be active? - product category, market segment, geographic areas,
core technologies, value creation stages
 Vehicles: how will we get there? - Internal development, joint ventures, licensing,
franchising, acquisitions
 Differentiators: how will we win in the market-place? - Image, customizations, price, styling
reliability
 Staging: what will be our speed and sequence of moves? - Speed of expansion, sequences of
initiatives
 Economic logic: how will we obtain our returns? - Lower cost due to mass production,
unmatchable services, product features – example of ARAMARK

8) The importance of strategic comprehensiveness;

i. All five are important enough to require intentionality
ii. The five elements call not only for choice, but also for preparation and investment.
iii. All five elements must align with and support each other
iv. Finally, it is only after the specification of all five strategic elements that the
strategist is in the best position to turn to designing all the other supporting
activities.
9) Of Strategy, Better Strategy, and No Strategy
i. A business should not just have a strategy but a sound strategy.
ii. Tools such as industry analysis, technology cycles, value chains, and core
competencies, improve the soundness of strategies
iii. Strategy is not primarily about planning. It is about intentional, informed, and
integrated choices.