strategy lecture mar2012
TRANSCRIPT
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Strategic Management
Robert Jones 2012
Based on Johnson, Scholes & Whittington (2005)
ExploringCorporate Strategy, 7th Edition, Pearson Education
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Definition of Strategy
Strategy is the directionand scopeof an
organisation over the long term,which
achieves advantagein a changing
environmentthrough its configuration of
resources and competenceswith the aim
of fulfilling stakeholderexpectations.
Johnson, Scholes & Whittington (2005)
ExploringCorporate Strategy, 7th Edition, Pearson Education
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Exhibit 2.1
Layers of the business environment
Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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Exhibit 1.2
The vocabulary of strategy
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Exhibit 1.3
A model of the elements of strategic management
Analysisexternal, internaland stakeholders
(fairly straightforward)
Options
and selection ofoption
(not so difficult)
Implementation
(now it gets tricky ! )
Based on Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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Strategy as a Subject of Study
Unique resources, core competencesResource based
theory (Hamel,
Prahalad)
1980s
Innovation to deal with changeFirms 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 approachCorporate planning60/70s
What would you do if you were CEO?Harvard case study1960s
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Mintzberg, H. Ten Strategy Schools (The Strategy Safari)
Bowman, C. Generic Strategiesa Substitute for Thinking
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There are many ways of looking at strategy:
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The risk of strategic drift
Exhibit 1.4 Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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Internationalisation Size of market
Range of competitors
Relationshipsoverseas
Institutional/cultural
orientation to
strategy and profit
orientation
E-Commerce Speed and direction
of technology change
Expectations abouthow to do business
E-commercecapability
Service small markets
Contemporary Strategy Themes (1)
Johnson, Scholes & Whittington (2005)
ExploringCorporate Strategy, 7th Edition, Pearson Education
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Changing purposes Change from pure
profit driven
Corporate scandals
Corporate socialresponsibility
AND drive forshareholder value
Public sector morebusiness-like target setting andservice orientation
Knowledge andLearning
Innovation
Generate andintegrateknowledge/promotelearning
New ways of doingbusiness
People interactions
Contemporary Strategy Themes (2)
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Exhibit I.i
The role of the paradigm in strategy
formulation
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Exhibit I.v
Three strategy lenses
Johnson, Scholes & Whittington (2005)
ExploringCorporate Strategy, 7th Edition, Pearson Education
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MacroenvironmentPESTEL (1)
Exhibit 2.2 Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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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=d0-V_HrrzcUhttp://www.youtube.com/watch?v=d0-V_HrrzcUhttp://www.youtube.com/watch?v=d0-V_HrrzcUhttp://www.youtube.com/watch?v=d0-V_HrrzcUhttp://www.youtube.com/watch?v=d0-V_HrrzcUhttp://www.youtube.com/watch?v=d0-V_HrrzcU -
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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
http://www.youtube.com/watch?v=RuQY_WKbHEM&feature=relatedhttp://www.youtube.com/watch?v=RuQY_WKbHEM&feature=related -
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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)ExploringCorporate Strategy, 7th Edition, Pearson Education
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Porters DiamondThe Determinants of National Advantage
Source:M. Porter, Competitive Advantage of Nations, Macmillan, 1990.
Exhibit 2.4
This is an excellent frameworkwhen looking at
conditions for business
Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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First test yourself
you have seen this before
fill in the blanks
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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
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The Life-Cycle Model
Exhibit 2.6 Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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Strategic Capability- the terminology
Exhibit 3.2 Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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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)ExploringCorporate Strategy, 7th Edition, Pearson Education
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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)ExploringCorporate Strategy, 7th Edition, Pearson Education
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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/
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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.
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Expectations and Purposes - Outline
Corporate governance
Organisational stakeholders
Stakeholder mapping
Ethical issues
Culture
Cultural web
Communication of organisational purposes
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Expectations andPurposes
Exhibit 4.1 Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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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.
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The Cultural Web
Exhibit 4.11 Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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Exhibit III.1
Strategic choices
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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 ofCompetitive
Strategy, Prentice Hall, 1995.) However, Bowman uses the dimenstion Perceived Use Value.
Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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The Strategy Clock
Exhibit 5.2b Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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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
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Competition and Collaboration
Exhibit 5.5 Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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Game Theory - Prisoners Dilemma
Exhibit 5.6 Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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Corporate Level Issues
Exhibit 6.1 Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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Related Diversification
Exhibit 6.3 Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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Diversity and Performance
Exhibit 6.4 Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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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
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The Growth Share (or BCG) Matrix
Exhibit 6.8 Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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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.
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Indicators of SBU Strength and Market Attractiveness
Exhibit 6.10a Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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Market Attractiveness/SBU Strength Matrix
Exhibit 6.10b Johnson, Scholes & Whittington (2005)ExploringCorporate Strategy, 7th Edition, Pearson Education
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Strategy Guidelines Based on Directional Policy
Matrix