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Strategy Concept Introduction


Johnson and Scholes define strategy as follows: "Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".

In other words, strategy is about:
  • Where is the business trying to get to in the long-term? (direction)
  • Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope)
  • How can the business perform better than the competition in those markets? (advantage)
  • What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)
  • What external, environmental factors affect the businesses' ability to compete? (environment)
  • What are the values and expectations of those who have power in and around the business? (stakeholders)


CLASS requirements:

Video: What Strategy is - from M. E. Porter




Readings: Introducción a la Estrategia


  1. Nota: Concepto de Estrategia [Spa]
  2. Nota: Las 5Ps de la estrategia [Spa]

Libro: Capitulo 1, Dirección Estrategica, 2006, Grant.

CASE - Study:




Strategy at Different Levels of a Business


Strategies exist at several levels in any organisation - ranging from the overall business (or group of businesses) through to individuals working in
  • Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a "mission statement".
  • Business Unit Strategy - is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.
  • Operational Strategy - is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.



How Strategy is Managed


In its broadest sense, strategic management is about taking "strategic decisions" - decisions that answer the questions above. In practice, a thorough strategic management process has three main components, shown in the figure below:
strategy_balls.gif
  • Strategic Analysis - This is all about the analysing the strength of businesses' position and understanding the important external factors that may influence that position. The process of Strategic Analysis can be assisted by a number of tools like SWOT.

  • Strategic Choice - This process involves understanding the nature of stakeholder expectations (the "ground rules"), identifying strategic options, and then evaluating and selecting strategic options.

  • Strategy Implementation - Often the hardest part. When a strategy has been analysed and selected, the task is then to translate it into organisational action.