HOWSTRATEGYSHAPESSTRUCTURE

C R A F T A S T R A T E G Y T H A T D E F I N E S Y O U R E N V I R O N M E N T

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THERE ARE TWOTYPES OF STRATEGY:

1 Structural

2 Reconstructural

TYPES OF STRATEGY

TYPES OF STRATEGY

STRUCTURAL

When new company is setting their corporate strategy,they analyze the environment, competitors etc. Then they

determine their position (SWOT analysis) and carvedistinctive strategic position where they can outperform

rivals.

TYPES OF STRATEGY

STRUCTURAL

Usually it is done in two ways:premium price or low costs.

TYPES OF STRATEGY

STRUCTURAL

The organization aligns its value chain accordingly,creating manufacturing, marketing, and humanresource strategies in the process. On the basis ofthese strategies, financial targets and budgetallocations are set.

Companys strategic options are bounded by theenvironment. In other words, structure shapesstrategy.

TYPES OF STRATEGY

Reconstructional

The reconstructionist approach is more appropriatein certain economic and industry settings. Thefirst task of an organizations leadership, is tochoose the appropriate strategic approach in lightof the challenges the organization faces.

Executives then need to make sure that theirorganizations are aligned behind it to producesustainable performance.

WHAT IS THE RIGHTSTRATEGIC APPROACHFOR YOU?

RIGHT STRATEGIC APPROACH

RIGHT STRATEGIC APPROACH

Factors that determines the right approach:

the structural conditions in which anorganization operatesits resources and capabilitiesits strategic mind-set

RIGHT STRATEGIC APPROACH

When the structural conditions of an industry orenvironment are attractive (or even not so much)and you have the resources and capabilities tocarve out a viable competitive position, thestructuralist approach is likely to produce goodreturns.

RIGHT STRATEGIC APPROACH

But when conditions are unfavorable and they aregoing to work against you whatever your resourcesand capabilities might be, organization shouldadapt a reconstructionist approach and build astrategy that will reshape industry boundaries

THE THREE STRATEGYPROPOSITIONS

RIGHT STRATEGIC APPROACH

Whichever approach is chosen, a strategys successhinges on the development and alignment of threepropositions:

value proposition that attracts buyersprofit proposition that enables the company tomake money out of the value propositionpeople proposition that motivates thoseworking for or with the company to executethe strategy

RIGHT STRATEGIC APPROACH

With an increasing number of businesses,governments, and nonprofits facing unattractiveenvironmental and structural conditions, leaderscan no longer afford to follow the common practiceof letting structure drive strategy in all situations.

RIGHT STRATEGIC APPROACH

Thank you for checking this presentation, hope you liked it!For full text and examples of usage of both strategies checkour blog: breakthroughideas.wordpress.com

materials from: https://hbr.org/2009/09/how-strategy-shapes-structure