PRESENTATION SLIDES To accompany:

Contemporary Strategy Analysis (6th edition, Blackwell Publishing, 2008)

Robert M. GrantRobert M. Grant

Assisted by Kate Grant

The Concept of StrategyThe Concept of Strategy

• The role of strategy in success

• A framework for strategy analysis

• The evolution of strategic management

• Corporate strategy and business strategy

• Strategy making: Design or process?

• The role of strategy

OUTLINEOUTLINE

Components of SuccessComponents of Success

MADONNA GIAP & NORTH VIETNAMESE

LANCE ARMSTRONG

GOALS Single-minded quest for stardom.

Reunification of Vietnam under Communist rule.

Winning the Tour de France

UNDER-STANDING THE ENVIRONMENT

Identified emerging trends in popular culture. Understood key success factors in showbiz

Intimate knowledge of terrain Understanding U.S. political system.

Diagnosis of the physical, psychological and strategic determinants of individual and team performance

RESOURCE APPRAISAL

Recognized limited raw talent. Exploited strengths in self-promotion, product development & relationship management

Recognized economic and military weaknesses and core political strengths

Systematic development of individual stamina and team capabilities

IMPLEMENT- ATION

Commitment and discipline. Charismatic leadership. Team building. Attention to detail.

Tight control. Long-term commitment. Effective propaganda. Inspirational leadership.

Clear delineation of individual roles. Alignment of incentives with team goals. Nurturing esprit de corp

Successful

Strategy

Long-term, simple and

agreed objectives

Profound understanding of the competitive

environment

Objective appraisal of resources

What Makes a Successful Strategy?What Makes a Successful Strategy?

EFFECTIVE IMPLEMENTATION

What is Strategy?What is Strategy?

• Distinguishing strategy from tactics:– Strategy is the overall plan for deploying

resources to establish a favorable position.– Tactic is a scheme for a specific maneuver.

• Characteristics of strategic decisions:– Important.– Involve a significant commitment of resources.– Not easily reversible.

The Evolution of Strategic ManagementThe Evolution of Strategic Management

DOMINANTTHEME

1950s 1960s-early 70s Mid-70s-mid-80s Late 80s –1990s 2000s

Budgetary Corporate Positioning Competitive Strategicplanning & planning advantage innovationcontrol Financial Planning Selecting Focusing on Reconcilingcontrol growth &- sectors/markets. sources of size with

diversification Positioning for competitive flexibility &leadership advantage agility

Capital Forecasting. Industry analysis Resources & Cooperativebudgeting. Corporate Segmentation capabilities. strategy.Financial planning. Experience curve Shareholder Complexity. planning Synergy Portfolio analysis value. Owning

E-commerce. standards. — Knowledge Management—

Coordination Corporate Diversification. Restructuring. Alliances && control by planning depts. Global strategies. Reengineering. networksBudgeting created. Rise of Matrix structures Refocusing. Self -organizsystems corporate Outsourcing. ation & virtual

planning organization

MAINISSUES

KEY CONCEPTS

&TOOLS

MANAGE-MENT

IMPLIC-ATIONS

The Basic FrameworkStrategy: the Link between the

Firm and its Environment

The Basic FrameworkStrategy: the Link between the

Firm and its Environment

THE FIRM

• Goals & Values

• Resources & Capabilities

• Structure & Systems

THE FIRM

• Goals & Values

• Resources & Capabilities

• Structure & Systems

THE INDUSTRYENVIRONMENT

• Competitors

• Customers

• Suppliers

THE INDUSTRYENVIRONMENT

• Competitors

• Customers

• Suppliers

STRATEGYSTRATEGYSTRATEGY

Sources of Superior Profitability

RATE OF PROFIT ABOVE THE

COMPETITIVE LEVEL

How do we make

money?

INDUSTRY

ATTRACTIVENESS

Which businesses

should we be in?

COMPETITIVE ADVANTAGE

How should we compete?

CORPORATE STRATEGY

BUSINESS STRATEGY

Strategy Making : Design or Process?Strategy Making : Design or Process?

Strategy as Design

Planning andrational choice

INTENDEDSTRATEGY

Many decision makersresponding to multitude ofexternal and internal forces

REALIZED STRATEGY

EMERGENT STRATEGY

Strategy as Process

Mintzberg’s Critique of Formal Strategic Planning:•The fallacy of prediction – the future is unknown•The fallacy of detachment -- impossible to divorce formulation from implementation•The fallacy of formalization --inhibits flexibility, spontaneity, intuition and learning.

Mintzberg’s Critique of Formal Strategic Planning:•The fallacy of prediction – the future is unknown•The fallacy of detachment -- impossible to divorce formulation from implementation•The fallacy of formalization --inhibits flexibility, spontaneity, intuition and learning.

Strategy Making Processes within the Company: Multiple Roles of Strategy

Strategy Making Processes within the Company: Multiple Roles of Strategy

Strategy as DecisionSupport

Strategy as Coordinationand Communication

Strategy as Target

Improves the qualityof decision making

Creates consistencyand unity

Improves perform- ance by setting high aspirations

The Role of AnalysisThe Role of Analysis

• Strategy analysis improves decision processes, but doesn’t give answers.

• Strategy analysis assists us to identify and understand the main issues.

• Strategy analysis helps us to manage complexity.

• Strategy analysis can enhance flexibility and innovation by supporting learning.