Strategic Management

Robert Jones 2012

Based on Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education

Definition of 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.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 2.1
Layers of the business environment
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 1.2
The vocabulary of strategy
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 1.3
A model of the elements of strategic management
Analysis external, internal
and stakeholders
(fairly straightforward)
Options
and selection of
option
(not so difficult)
Implementation
(now it gets tricky ! )
Based on Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Strategy as a Subject of Study
Unique resources, core competences Resource based
theory (Hamel,
Prahalad)
1980s
Innovation to deal with change Firms as organisms
(Eisenhardt, Stacey)
1990s
Assessing competitive forces (5 forces) and
positioning
Market positioning
(Porter)
1980s
Complexity and uncertainty. Influence of
experience, politics, culture, history
Adaptive processes
(Quinn)
1980s
Systematised and analytical approach Corporate planning 60/70s
What would you do if you were CEO? Harvard case study 1960s
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Mintzberg, H. Ten Strategy Schools (The Strategy Safari)



Bowman, C. Generic Strategies a Substitute for Thinking
There are many ways of looking at strategy:
The risk of strategic drift
Exhibit 1.4
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Good strategy is in the overlap

Often, the environment E moves
and the organisation does not move
- this can be fatal (strategic drift)
Internationalisation
Size of market
Range of competitors
Relationships
overseas
Institutional/cultural
orientation to
strategy and profit
orientation
E-Commerce
Speed and direction
of technology change
Expectations about
how to do business
E-commerce
capability
Service small markets
Contemporary Strategy Themes (1)
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Changing purposes
Change from pure
profit driven
Corporate scandals
Corporate social
responsibility
AND drive for
shareholder value
Public sector more
business-like
target setting and
service orientation

Knowledge and
Learning
Innovation
Generate and
integrate
knowledge/promote
learning
New ways of doing
business
People interactions

Contemporary Strategy Themes (2)
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit I.i
The role of the paradigm in strategy
formulation
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit I.v
Three strategy lenses
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Macroenvironment PESTEL (1)
Exhibit 2.2
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Government policy

The 2012 Financial Statement

How will this influence business and strategy?
http://www.youtube.com/watch?v=d0-V_HrrzcU

http://www.youtube.com/watch?v=RuQY_WKbHEM&feature=related

Wille Walsh, IAG plc (British Airways) and Mike OLeary, Ryanair
respond to recent changes in APD Air Passenger Duty
Drivers of Globalisation
Source: Based on G. Yip, Total Global Strategy ll, FT/Prentice Hall, 2003, chapter 2.
Exhibit 2.3
This is an excellent framework
we will build on this in later lectures
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Porters Diamond
The Determinants of National Advantage
Source: M. Porter, Competitive Advantage of Nations, Macmillan, 1990.
Exhibit 2.4
This is an excellent framework
when looking at
conditions for business
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
First test yourself
you have seen this before
fill in the blanks
The Five Forces Framework

Source: Adapted from M.E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors 1980, Free Press, 1980, p. 4.
Copyright 1980,1988 by The Free Press, a division of Simon & Schuster Inc. Reproduced with permission.
Exhibit 2.5
The Life-Cycle Model
Exhibit 2.6
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Strategic Capability- the terminology
Exhibit 3.2
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
The Value Chain
Source: M.E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance, Free Press, 1985. Used with permission of
The Free Press, a division of Simon & Schuster, Inc. 1985, 1988 by Michael E. Porter. All rights reserved.
Exhibit 3.6
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
The Value Network
Source: M.E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance, Free Press, 1985. Used with permission of
The Free Press, a division of Simon & Schuster Inc. 1985, 1988 by Michael E. Porter. All rights reserved.

Exhibit 3.7
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
See my lecture on Competences

based on application of the Value Chain

With examples of

Zara

Ryanair

Apple

Honda

Toyota


http://cambridgemba.wordpress.com/strategy/
Knowledge Creation Processes
Exhibit 3.9
Source: I. Nonaka and H. Takeuchi, The Knowledge-Creating Company, Oxford University Press Inc., 1995. Reprinted by
permission of Oxford University Press.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Expectations and Purposes - Outline
Corporate governance
Organisational stakeholders
Stakeholder mapping
Ethical issues
Culture
Cultural web
Communication of organisational purposes
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Expectations and Purposes
Exhibit 4.1
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Stakeholder Mapping: the Power/Interest Matrix
Exhibit 4.5
Source: Adapted from A. Mendelow, Proceedings of the Second International Conference on Information Systems, Cambridge, MA,
1991.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
The Cultural Web
Exhibit 4.11
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit III.1
Strategic choices
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
The Strategy Clock
Exhibit 5.2a
Note: The strategy clock is adapted from the work of Cliff Bowman (see D. Faulkner and C. Bowman, The Essence of Competitive
Strategy, Prentice Hall, 1995.) However, Bowman uses the dimenstion Perceived Use Value.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
The Strategy Clock
Exhibit 5.2b
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Competitive Strategies in Hypercompetitive
Conditions
Competitive advantage is temporary
Rapid imitation
Not sustainable
Competitive advantage relates to
Organisations ability to change
Speed
Flexibility
Innovation
Disruption of market
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Competition and Collaboration
Exhibit 5.5
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Game Theory - Prisoners Dilemma
Exhibit 5.6
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Corporate Level Issues
Exhibit 6.1
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Related Diversification
Exhibit 6.3
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Diversity and Performance
Exhibit 6.4
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Reasons for International Diversity
Market-based Exploit cultural/
geographic differences
Globalisation of markets &
competition
Cash in on differences in culture
Following customers Administrative differences
Bypass limitations in home market Specific geographical/
economic differences
Utilise strategic capabilities Economic benefits
Broaden market size Economies of scale
Internationalise value-adding
activities
Stabilisation of earnings across
markets
Enhance knowledge
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
The Growth Share (or BCG) Matrix
Exhibit 6.8
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Public Sector Portfolio Matrix
Exhibit 6.9
Source: J.R. Montanari and J.S. Bracker, Strategic Management Journal, vol. 7, no. 3 (1986), reprinted by permission of
John Wiley & Sons Ltd.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Indicators of SBU Strength and Market Attractiveness
Exhibit 6.10a
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Market Attractiveness/SBU Strength Matrix
Exhibit 6.10b
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Strategy Guidelines Based on Directional Policy
Matrix
Exhibit 6.10c
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education