Table of Contents
Lecture 1 – Introducing Strategy ... 2
Lecture 2 – Macro-Environmental Analysis ... 5
Lecture 3 – Industry & Sector Analysis ... 8
Lecture 4 – Resources & Capabilities ...13
Lecture 5 – Stakeholder & Culture ...17
Lecture 6 – Business Strategy & Models ...25
Lecture 7: Scenario Planning ...31
Lecture 8 – Corporate Governance ...32
Lecture 9 – Corporate Strategy & Diversification ...35
Lecture 10 – Strategy in Action ...41
Lecture 1 – Introducing Strategy
Definition of Strategy
Strategy → long-term direction and purpose of organisation.
• Includes deliberate, logical strategy and more incremental, emergent patterns of strategy.
• Includes both strategies that emphasise difference and competition, and strategies that recognise roles of cooperation and imitation.
The three elements of strategy definition – the long term, direction and organisation.
Leading theories Definition of strategy
Chandler Logical flow from determination of goals/objectives to allocation of resources.
Porter Focuses on deliberate choices, difference and competition.
Drucker How a firm will win.
Mintzberg Mintzberg → strategy is less certain → strategies do not always follow deliberately chosen/logical plan but can emerge in ad hoc ways.
Ways to define organisation’s purpose:
Mission statements Provide employees/stakeholders with clarity about what the organisation is fundamentally there to do.
Vision Statement Concerned with the future the organisation seeks to create.
Statement of Corporate Values
Underlying core ‘principles’ that guide strategy and define way that organisation should operate.
Statement of objectives Statements of specific outcomes that are to be achieved.
• financial terms (e.g. Profit).
• market-based objectives (e.g. Market Share).
Strategy statements Strategy statements:
1. Fundamental goals that organisation seeks 2. Scope of organisation’s activities.
3. Particular advantages or capabilities it has to deliver all of these.
Levels of Strategy
Corporate-level strategy → concerned with overall scope of organisation and how value is added.
Business-level strategy → concerned with way business seeks to compete successfully in particular market (aka ‘competitive strategy’).
Functional strategy → concerned with how different parts of organisation deliver strategy effectively in terms of managing resources, processes and people.
Exploring Strategy Framework
Exploring Strategy Framework includes understanding:
1. Strategic position 2. Strategic choices;
3. Strategy in action.
Part 1 – Strategic position
Strategic position – concerned with impact on strategy of:
• Macro-environment,
• Industry environment,
o i.e. Competitors, suppliers and customers.
• Strategic capability (resources and competences)
o Resources (e.g. machines & buildings) and competences (e.g. technical &
managerial skills).
• Stakeholders & culture.
Part 2 – Strategic choices
Strategic choices → options for strategy in terms of directions (which strategy might move) and methods (which strategy might be pursued).
Typical strategic choices:
• Business strategy and models
o How organisation seeks to compete at individual business level.
• Corporate strategy diversification
o Appropriate degree of diversification, with regard to products offered and markets served.
o How to manage internal relationships between business units and corporate head-office.
Part 3 – Strategy in action
How strategies are formed and implemented.
Strategy development processes
Rational-analytic view → strategies developed through rational and analytical processes.
• Linear sequence.
1. Statements of overall strategy and mission, vision and objectives.
2. Macro-environmental and industry analyses followed by capability analysis.
3. Strategic options evaluated
4. Putting resources in place and addressing key change processes.
Emergent view → strategy development as incremental adaptation →often inspired by actions low down in organisation.
• Good ideas/opportunities often come from practical experience at bottom of organisation, not just from top management.
Lecture 2 – Macro-Environmental Analysis
Macro-Environmental Analysis
Broad environmental factors that impact many organisations, industries and sectors.
PESTEL framework
PESTEL analysis → 6 environmental factors:
Political factors
Political factors include:
• Government policies.
• Taxation changes.
• Foreign trade regulations.
• Political risk in foreign markets.
• Exposure to civil society organisations (e.g. lobbyists, social media).
Political risk analysis → analysis of threats and opportunities arising from potential political change.
2 key dimensions to political risk analysis:
• Macro–micro dimension
o Macro risk → attaches to whole countries;
o Micro risk → attaches to specific organisation.
• Internal–external dimension
o Internal factors → issues within country (e.g. government change)
o External factors → arise outside country but have impact within it (e.g. OPEC oil prices).
