02 strategy formulation

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


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


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


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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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


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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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


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

02 strategy formulation

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