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Exploring Strategy, Text and Cases - (1 Introducing Strategy)

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Exploring Strategy, Text and Cases - (1 Introducing Strategy)

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Chapter 1

Introducing strategy

Key terms Learning outcomes

business-level strategy 12 After reading this chapter you should be able to:
corporate-level strategy 12 • Summarise the strategy of an organisation in a
functional strategy 12 ‘strategy statement’.
four strategy lenses 23 • Distinguish between corporate, business and
Exploring Strategy Framework 12 functional strategies.

mission statement 8 • Identify key issues for an organisation’s strategy

using the Exploring Strategy Framework.
objectives 9
• Understand different people’s roles in strategy work.
statements of corporate values 9
• Appreciate the importance of different
strategic choices 15 organisational contexts, academic disciplines and
strategic position 14 theoretical lenses to practical strategy analysis.
strategy 5
strategy in action 16
strategy statements 9
three-horizons framework 6
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

vision statement 9

Whittington, R., Regnér, P., Angwin, D., Johnson, G., Scholes, K., Whittington, R., Regnér, P., Angwin, D., Johnson, G., & Scholes, K. (2019). Exploring strategy, text
and cases. Pearson Higher Education & Professional Group.
Created from esade on 2023-10-29 19:36:31.
1.1 Introduction

1.1 Introduction
The Chief Executive Officer (CEO) of a medium-sized family business knew they had a
problem. New aggressive competition in their main European markets was threatening their
performance just as demand was softening. To help him address this major problem the
CEO invited in a consultancy firm to assess whether this was the right time for his business
to find new international markets for growth or to invest more in product innovation to
stimulate demand. Claudia, the junior consultant in the team, heard the consulting partner
explain how they would carry out a systematic analysis of the company’s situation to under-
stand its success, assess the challenges posed by the competition and shifting markets and
identify broader opportunities and threats from the wider environment. It would be her
task to assemble key data and conduct analysis to generate future possible options for the
business. These would help inform the CEO’s decision about how his business could improve
its competitive position. The consulting firm would assist with implementation if needed.
The problem presented by the CEO to the consultants is one of strategy. It is concerned
with key issues for the future of the organisation. For instance, how should the company
compete in the future with aggressive new entrants? What growth options are there for
the company? If further internationalisation is a good strategy, what would be the optimal
method to achieve this outcome and what might be the resourcing implications? All of these
strategy questions are vital to the future survival of the organisation.
Strategy questions naturally concern entrepreneurs and senior managers at the top of
their organisations. But these questions matter more widely. Outside of the organisation,
stakeholders such as investors, including banks, venture capitalists and analysts, influence
the strategy. Inside the organisation, middle managers also have to understand the strategic
direction, both to know how to get top management support for their initiatives and to
explain it to the people they are responsible for. Anybody looking for a management-track job
needs to be ready to discuss strategy with their potential employer. Indeed, anybody taking
a job should first be confident that their new employer’s strategy is actually viable. There
are even specialist career opportunities in strategy, for example like Claudia, as a strategy
consultant or as an in-house strategic planner, often key roles for fast-track young managers.

Figure 1.1 Strategy: its definition, purpose, analysis and work

What is strategy?

The purpose of strategy

The Exploring Strategy Framework

Working with strategy

This book is relevant to any kind of organisation responsible for its own direction into the
future. Thus the book refers to large private sector multinationals and small entrepreneurial
start-ups; to family businesses, both large and small; to public-sector organisations such as
schools and hospitals; and to not-for-profits such as charities or sports clubs. Strategy matters
to almost all organisations, and to everybody working in them.
In this chapter you will begin with examining the main definitions of strategy, build your
understanding of strategy’s purpose, be introduced to the Exploring Strategy Framework for
analysing an organisation’s strategy and increase your awareness of working, as students
and managers, with strategy in different contexts (see Figure 1.1). But first, why is the book
entitled Exploring Strategy?

1.1.1 Why ‘Exploring Strategy’?

There are a large number of strategy textbooks available on the market so it is important
to realise why readers choose Exploring Strategy. As strategists we believe that one of strat-
egy’s distinctive features is that it draws upon many other perspectives, including economics,
finance, marketing, operational management, organisational behaviour, psychology to
name a few. However many strategy textbooks adopt a single disciplinary focus, such as an
economics perspective, for instance, that ignores other critical issues, such as the work of
strategists, the influence of organisational politics, history and culture. Others focus much
more on the behavioural side of strategy and largely overlook the importance of finance
and economics. Exploring Strategy is distinctive in emphasising a comprehensive view of
strategy, and this will enable you to explore the insights of many disciplinary perspec-
tives including both the economics of strategy and the people side of managing strategy
in practice.
A further reason for the word ‘Exploring’ in the title is rooted in the practical world of
strategy work. Our focus on the practice and practicalities of strategy reveals that there are
rarely obvious answers. Indeed, many strategy problems are highly complex and managers
should beware of over-simplified ‘solutions’. Therefore in strategy it is important both to
recognise the real scope of problems and to explore several options. Through exploration
you will widen your awareness of practical issues relevant to strategy, recognise the difficul-
ties of interconnectedness, and probe each option carefully before making informed choices.
We therefore believe that major strengths of Exploring Strategy, its comprehensiveness and
focus upon practice, will help reduce your risk of myopia to enable you to produce well-
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

informed, grounded solutions to complex strategic problems.

We also believe that ‘Exploring’ in the title is appropriate as this is a research-led book,
drawing upon world-class research and including the latest thinking on key strategic topics.
These feature throughout Exploring Strategy and particularly pioneering work is found in
the ‘Thinking differently’ sections at the ends of chapters. The ‘Strategy lens’ sections at the
end of the main parts of the book also introduce novel and distinctive themes. These will
ensure that you are at the cutting edge of strategy.
Exploring Strategy also explores a wide range of organisational and geographic contexts.
Through a diverse and substantial selection of illustrations and case studies, we include large
multinationals as well as medium-sized and entrepreneurial start-up firms. We give weight
not only to ‘for-profit’ companies but also family businesses that may also be not-for-profit,
public sector and other not-for-profit organisations. We examine these not only in devel-
oped economies in the West but also in a wide range of emerging markets and developing
countries. This broad base of organisations and contexts will give you a wider knowledge
base than is common in other strategy texts.

1.2 What is strategy?1

The origins of the word strategy have been traced back to the city of Athens in the sixth
century BC where it was developed to name a new military and political leadership posi-
tion. It combined the words stratos, which meant ‘army spread out over the ground’, and
agein, meaning ‘to lead’.2 To this practical consideration of managing and directing a large
complex force, the importance of strategy was highlighted by the Chinese military philos-
opher Sun Tzu, who defined strategy as ‘the great work of the organization. In situations
of life or death, it is the Tao of survival or extinction’ (Tao is a Chinese word that indicates
‘path’, ‘way’, ‘route’ and even ‘principle’). Since that time there have been many new defin-
itions of the word strategy, particularly by the military, but in the 1960s Alfred Chandler,
strategy’s founding theorist, brought strategy formally into a business context.3 Since then,
definitions of strategy have continued to refine our understanding of the term and several
prominent ones are examined below. However, for this book our initial basic definition of
strategy, which we shall elaborate upon at the end of the chapter, is as follows: strategy is
the long-term direction of an organisation. Thus, for example, the long-term direction of
Amazon is from book retailing to internet services in general. For Disney, it is from cartoons to
diversified entertainment. This section examines the practical implication of this definition of
strategy; distinguishes between different levels of strategy; and explains how to summarise
an organisation’s strategy in a ‘strategy statement’.

1.2.1 Defining strategy

Defining strategy as the long-term direction of an organisation implies a more compre-
hensive view than some influential definitions. Figure 1.2 shows the strategy definitions of
several leading strategy theorists: Alfred Chandler and Michael Porter, both from the Harvard
Business School, Peter Drucker from Claremont University, California and Henry Mintzberg,
from McGill University, Canada. Each points to important elements of strategy. Chandler
emphasises a logical flow from the determination of goals and objectives to the alloca-
tion of resources. Porter focuses on deliberate choices, difference and competition. Drucker
suggests that it is a theory about how a firm will win.4 Mintzberg, however, takes the view

Figure 1.2 Definitions of strategy

‘. . . the determination of the long-run goals and objectives of an

enterprise and the adoption of courses of action and the allocation of resources
necessary for carrying out these goals’
Alfred D. Chandler

‘Competitive strategy is about being different. It means deliberately choosing a

different set of activities to deliver a unique mix of value’
Michael Porter

‘a firm’s theory about how to ‘a pattern in a stream of ‘the long-term direction of an

gain competitive advantages’ decisions’ organisation’
Peter Drucker Henry Mintzberg Exploring Strategy

Sources: A.D. Chandler, Strategy and Structure: Chapters in the History of American Enterprise, MIT Press, 1963, p. 13; M.E. Porter, ‘What is strategy?’,
Harvard Business Review, November–December 1996, p. 60; P.F. Drucker, ‘The theory of business’, Harvard Business Review, September–October
1994, pp. 95–106; H. Mintzberg, Tracking Strategies: Towards a General Theory, Oxford University Press, 2007, p. 3.

that strategy is less certain and uses the word ‘pattern’ to allow for the fact that strategies
do not always follow a deliberately chosen and logical plan, but can emerge in more ad hoc
ways. Sometimes strategies reflect a series of incremental decisions that only cohere into a
recognisable pattern – or ‘strategy’ – after some time.
There are two advantages to our opening definition of strategy. First, the long-term direc-
tion of an organisation can include both deliberate, logical strategy and more incremental,
emergent patterns of strategy. Second, long-term direction can include both strategies that
emphasise difference and competition, and strategies that recognise the roles of cooperation
and even imitation.
The three elements of this strategy definition – the long term, direction and organisation –
can each be explored further. The strategy of Tesla Motors illustrates important points (see
Illustration 1.1):

• The long term. Strategies are typically measured over years, for some organisations a
decade or more. The importance of a long-term perspective on strategy is emphasised
by the ‘three horizons’ framework shown in Figure 1.3. The three-horizons framework
suggests organisations should think of their businesses or activities in terms of
different ‘horizons’, defined by time. Horizon 1 businesses are basically the current core
activities. In the case of Tesla Motors, Horizon 1 includes the original Tesla Roadster car
and subsequent models. Horizon 1 businesses need defending and extending but the
expectation is that in the long term they risk becoming flat or declining in terms of profits
(or whatever else the organisation values). Horizon 2 businesses are emerging activities
that should provide new future sources of profit. For Tesla, that might include the new
mega-battery business. Finally, there are Horizon 3 possibilities, which are more open
and for which outcomes are even more uncertain. These are typically risky research and
development projects, start-up ventures, test-market pilots or similar: at Tesla, these might
be further solar electric initiatives, rockets and space transportation. For a fast-moving
organisation like Tesla, Horizon 3 might generate profits a few years from the present
time. In a pharmaceutical company, where the R&D and regulatory processes for a new
drug take many years, Horizon 3 might be a decade ahead. While timescales might differ,
as industries and types of firm can move at different rates, the basic point about the ‘three
horizons’ framework is that managers need to avoid focusing on the short-term issues of
their existing activities. Strategy involves pushing out Horizon 1 as far as possible, at the
same time as looking to Horizons 2 and 3.
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

Figure 1.3 Three horizons for strategy

Horizon 3 > create viable options

Performance
potential
Horizon 2 > build emerging businesses

Horizon 1 > extend and defend core business

Time (years)

Source: Adapted from M. Baghai, S. Coley and D. White, The Alchemy of Growth, Texere Publishers, 2000. Figure 1.1, p. 5.

Illustration 1.1 Tesla Motors: the future is electric!

a high-end sports car with lower price and emissions than
competitors – and a lower resource cost to the planet.

Model S
0–60 mph < 2.5 seconds; 100mpg; world-class handling;
Zero tailpipe emissions; +300 mile range; zero mainten-
ance for 100,00 miles (other than tyres); 50 per cent price
of the cheapest competitive sportscar.1

Tesla’s strategy is ‘to succeed in the high end of the market,

where customers will pay a premium for a sports car without
Are there enough Teslas in the world? compromise, and then drive down market rapidly to higher
Source: Jim West/Alamy Stock Photo unit volume and lower prices with each successive model. All
free cash flow is ploughed back into R&D to drive down costs
The Tesla Roadster is a staggeringly quick car with a difference. and bring follow on products to market as fast as possible.
There’s no wheel-spin, no traction control stutter, no driveline Roadster customers are actually paying for development of
shutter. Stamp on the throttle and the driver gets 686 lbs of the low cost family car.’2
torque immediately, rocketing the car from 0–60 mph in 3.2 Tesla aims to provide zero emission electric power gener-
seconds and with negligible noise – the car is electric. ation from their ‘giga’ battery factory in line with their over-
The Tesla Roadster is the main product of Tesla Motors. Its arching purpose to move from mine-and-burn hydrocarbons
charismatic chairman and main funder is PayPal cofounder, towards a sustainable solar electric economy. 2 Tesla Energy
and SpaceX CEO, Elon Musk. Barely a decade old, Tesla Motors now sells batteries for home and business use and aims to
is already gigantic, $52bn market capitalisation, and adored. offer an energy system for the world.
It’s been called ‘the world’s most important automotive However, things continue to be problematic as Tesla battles
company’ and the Tesla’s Model S, ‘the Most Loved Vehicle Model 3 production and distribution difficulties and will need to
in America’ – out-selling Mercedes S-class and BMW 7 series. make further large capital investments. Despite axing 7 per cent
And yet the last successful American car start-up was Ford, of its workforce in January 2019,3 improving production output
founded 111 years ago. How can Tesla Motors be so successful? and price reductions to counter a federal tax credit cut, Elon
Tesla is the brain-child of three Silicon Valley engineers Musk’s previous outbursts, dismissing analysts’ ‘boring bone-
convinced by global warming arguments and looking for alter- head questions’, an aborted attempt to take the company private
native fuel sources for cars. Co-founder Eberhard asked: ‘How and worries that his other business interests are distracting him,
much of the energy that comes out of the ground makes your are causing analysts such as Goldman Sachs to predict that Tesla
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

car go a mile?’1 He observed ‘hydrogen fuel cells are terrible – shares will fall 30 per cent in months with the rise of luxury
no more efficient than gas. Electric cars were superior to marque competitor products. But when your mission is to save
everything.’1 He then discovered a bright yellow all-electric the earth, maybe Elon Musk’s outspokenness is not surprising.4
two-seater bullet car with zero emissions, ‘tzero’, built by AC Notes
propulsion. Inspired, Eberhard kept saying to potential recruits – * A car company without a factory.
‘try and touch the dashboard.’1 He would then hit the acceler- ** A phrase from Harvard professor Clayton Christensen.

ator – they couldn’t! With Lamborghini-level acceleration, this Sources: (1) E. Musk, ‘The Secret Tesla Motors Master Plan (just
demonstrated electric cars didn’t have to be golf carts. between you and me)’, 2 August 2006; (2) D. Baer, ‘The making of
Tesla: invention, betrayal, and the birth of the Roadster’, Business
At the time industry logic said electric cars would never Insider, 11 November 2014; (3) Sainato, ‘How do they expect to run
succeed, as GM had spent $1bn trying to develop one that without us’, theguardian.com, 30 January 2019; (4) R. Water and P.
was then scrapped and battery technology had not improved Campbell, ‘Tesla: Reality begins to collide with the Elon Musk’s vision’,
in a hundred years. However Eberhard realised lithium-ion Financial Times, 15 June 2018.
batteries were different – improving 7 per cent p.a. So Tesla
was positioned to ride the current of technological history. Questions
The founders had no experience making cars, but realised
1 How does Tesla Motor’s strategy fit with the various
car companies now outsourced everything, even styling. Manu-
strategy definitions in Figure 1.2?
facturing partners were ready to be connected; a ’fab-less’ car
company was possible.* Production began in 2008. The busi- 2 What seems to account for Tesla’s success and current
ness plan described the Roadster as ‘disruptive’ technology** – difficulties?

• Strategic direction. Over the years, strategies follow some kind of long-term direction
or trajectory. The strategic direction of Tesla Motors is from the original electric car to a
diversified set of solar power offerings. Sometimes a strategic direction only emerges as
a coherent pattern over time. Typically, however, managers and entrepreneurs try to set
the direction of their strategy according to long-term objectives. In private-sector busi-
nesses, the objective guiding strategic direction is usually maximising profits for share-
holders. However, profits do not always set strategic direction. First, public-sector and
charity organisations may set their strategic direction according to other objectives: for
example, a sports club’s objective may be to move up from one league to a higher one.
Second, even in the private sector profit is not always the sole criterion for strategy. Thus
family businesses may sometimes sacrifice the maximisation of profits for family object-
ives, for example passing down the management of the business to the next generation.
The objectives behind strategic direction always need close scrutiny.
• Organisation. In this book, organisations are not treated as discrete, unified entities.
Organisations involve many relationships, both internally and externally. This is because
organisations typically have many internal and external stakeholders, in other words
people and groups that depend on the organisation and upon which the organisation
itself depends. Internally, organisations are filled with people, typically with diverse,
competing and more or less reasonable views of what should be done. At Tesla, co-founder
and original CEO Eberhard was fired by new Chairman Elon Musk. In strategy, therefore, it
is always important to look inside organisations and to consider the people involved and
their different interests and views. Externally, organisations are surrounded by important
relationships, for example with suppliers, customers, alliance partners, regulators and
investors. For Tesla, relationships with investors and advertisers are crucial. Strategy, there-
fore, is also vitally concerned with an organisation’s external boundaries: in other words,
questions about what to include within the organisation and how to manage important
relationships with what is kept outside.

Because strategy typically involves managing people, relationships and resources, the
subject is sometimes called ‘strategic management’. This book takes the view that managing
is always important in strategy. Good strategy is about the practicalities of managing as well
as the analysis of strategising.

1.2.2 The purpose of strategy: mission, vision, values

and objectives
What is a strategy for? Harvard University’s Cynthia Montgomery5 argues that the core of
a strategist’s job is defining and expressing a clear and motivating purpose for the organ-
isation. Even for private-sector organisations this is generally more than simple profit-
maximisation as long-term prosperity and employee motivation usually require expressions
of purpose that go beyond just profits. According to Montgomery, the stated purpose of the
organisation should address two related questions: how does the organisation make a differ-
ence; and for whom does the organisation make that difference? If the stakeholders of an
organisation can relate to such a purpose it can be highly motivating. Indeed, research by Jim
Collins and Jerry Porras suggests that the long-run success of many US corporations – such
as Disney, General Electric or 3M – can be attributed (at least in part) to the clear guidance
and motivation offered by such statements of purpose.6
There are four ways in which organisations typically define their purpose:

• A mission statement aims to provide employees and stakeholders with clarity about
what the organisation is fundamentally there to do. This is often expressed in the

apparently simple but challenging question: ‘What business are we in?’ Two linked ques-
tions that can clarify an organisation’s ‘business’ are: ‘What would be lost if the organisa-
tion did not exist?’; and ‘How do we make a difference?’ Though they do not use the term
‘mission statement’, Collins and Porras7 suggest that understanding the fundamental
mission can be done by starting with a descriptive statement of what the organisation
actually does, then repeatedly delving deeper into the organisation’s purpose by asking
‘why do we do this?’ They use the example of managers in a gravel and asphalt company
arriving at the conclusion that its mission is to make people’s lives better by improving
the quality of built structures. At the University of Utrecht the mission includes educating
students, training the next generation of researchers and addressing social issues.
• A vision statement is concerned with the future the organisation seeks to create. The
vision typically expresses an aspiration that will enthuse, gain commitment and stretch
performance. So here the question is: ‘What do we want to achieve?’ Porras and Collins
suggest managers can identify this by asking: ‘If we were sitting here in twenty years what
do we want to have created or achieved?’ They cite the example of Henry Ford’s original
vision in the very early days of automobile production that the ownership of a car should
be within the reach of everyone. For the Swedish music site Spotify, the vision is to become
‘the Operating System of music’, a universal platform for listening just as Microsoft is for
office software.
• Statements of corporate values communicate the underlying and enduring core ‘prin-
ciples’ that guide an organisation’s strategy and define the way that the organisa-
tion should operate. For example, Alphabet (previously Google), famously includes in its
values ‘you can be serious without a suit’, ‘fast is better than slow’ and ‘don’t be evil’. It
is important that these values are enduring, so a question to ask is: ‘Would these values
change with circumstances?’ And if the answer is ‘yes’ then they are not ‘core’ and not
‘enduring’. An example is the importance of leading-edge research in some universities.
Whatever the constraints on funding, such universities hold to the enduring centrality of
research. On the other hand, as Alphabet has grown and diversified, some critics wonder
whether the company still abides by its principle of ‘don’t be evil’ (see Chapter 13 end case).
• Objectives are statements of specific outcomes that are to be achieved. These are often
expressed in precise financial terms, for instance, the level of sales, profits or share valu-
ation in one, two or three years’ time.8 Organisations may also have quantifiable market-
based objectives, such as market share, customer service, repeat business and so on.
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

Sometimes objectives focus on the basis of competitive advantage: for example, low-cost
airlines such as RyanAir set objectives on turnaround time for their aircraft because
this is at the core of their distinctive low-cost advantage. Increasingly organisations are
also setting objectives referred to as ‘the triple bottom line’, by which is meant not only
economic objectives such as those above, but also environmental and social objectives to
do with their corporate responsibility to wider society (see Section 5.4).

Although visions, missions and values may be liable to become bland and too wide-
ranging,9 they can offer more enduring sources of direction and motivation than the concrete
nature of objectives. It is therefore crucial that vision, mission and values are meaningful
when included in strategy statements.

1.2.3 Strategy statements

David Collis and Michael Rukstad10 at the Harvard Business School argue that all entrepre-
neurs and managers should be able to summarise their organisation’s strategy with a ‘strategy
statement’. Strategy statements should have three main themes: the fundamental goals

(mission, vision or objectives) that the organisation seeks; the scope or domain of the
organisation’s activities; and the particular advantages or capabilities it has to deliver
all of these.
Mission, vision and objectives have been described above in 1.2.2 so here we concentrate
on the other two main themes, scope and advantage, with examples of all three given in
Illustration 1.2:

• Scope. An organisation’s scope or domain refers to three dimensions: customers or clients;

geographical location; and extent of internal activities (‘vertical integration’). For a univer-
sity, scope questions are twofold: first, which academic departments to have (a business
school, an engineering department and so on); second, which activities to do internally
themselves (vertically integrate) and which to externalise to subcontractors (for example,
whether to manage campus restaurants in-house or to subcontract them).
• Advantage. This part of a strategy statement describes how the organisation will achieve
the objectives it has set for itself in its chosen domain. In competitive environments, this
refers to the competitive advantage: for example, how a particular company or sports club
will achieve goals in the face of competition from other companies or clubs. The organ-
isation needs to be better than others at achieving its particular goal. In the public sector,
advantage might refer simply to the organisation’s capability in general. But even public-
sector organisations frequently need to show that their capabilities are not only adequate,
but superior to other rival departments or perhaps to private-sector contractors.

Collis and Rukstad suggest that strategy statements covering goals, scope and advan-
tage should be no more than 35 words long. The three themes are deliberately made highly
concise. Brevity keeps such statements focused on the essentials and makes them easy to
remember and communicate. Thus for Tesla, a strategy statement might be: ‘To accelerate
the advent of a sustainable solar economy by developing and incorporating superior battery-
based technologies into compelling mass market electric products and bringing them to
market as soon as possible.’ The IKEA business idea is a little more specific: ‘To create a better
everyday life for the many people [by offering] a wide range of well-designed, functional
home furnishing products at prices so low that as many people as possible will be able to
afford them.’ Of course, such strategy statements are not always fulfilled. Circumstances may
change in unexpected ways. In the meantime, however, they can provide a useful guide both
to managers in their decision-making and to employees and others who need to understand
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

the direction in which the organisation is going. The ability to give a clear strategy statement
is a good test of managerial competence in an organisation.
As such, strategy statements are relevant to a wide range of organisations. For example, a
small entrepreneurial start-up can use a strategy statement to persuade investors and lenders
of its viability. Public-sector organisations need strategy statements not only for themselves,
but to reassure clients, funders and regulators that their priorities are the right ones. Volun-
tary organisations need persuasive strategy statements in order to inspire volunteers and
donors. Thus organisations of all kinds frequently publish materials relevant to such strategy
statements on their websites or annual reports. Illustration 1.2 provides published materials
on the strategies of two very different organisations: the technology giant Samsung from
the private sector and York University in the UK from the public sector.

Illustration 1.2 Strategy statements

Both Samsung Electronics, the Korean telecommunications, computing and TV giant,
and York University, a leading British university, publish a good deal about their
strategies.
Samsung Electronics make a positive contribution to the development of a fairer
and sustainable world.
At Samsung, we follow a simple business philosophy: to We aim to provide an environment that attracts the very
devote our talent and technology to creating superior prod- best staff and students from all over the world, encourages
ucts and services that contribute to a better global society. and facilitates academic endeavour, and provides a supportive
Every day, our people bring this philosophy to life. Our atmosphere for the development and sharing of knowledge.
leaders search for the brightest talent from around the We want to be a University in which every member of staff
world, and give them the resources they need to be the best and every student feels valued as an individual. Even as we
at what they do. The result is that all of our products – from grow, we want to retain a genuine sense of belonging and
memory chips that help businesses store vital knowledge to community in our departments, colleges, clubs and societies.
mobile phones that connect people across continents – have We particularly value our colleges’ support for the cultural,
the power to enrich lives. And that’s what making a better social, academic and personal development of our students.
global society is all about. We will play an active role in the City of York, which is central
According to Samsung’s new motto it intends to give to our identity, and are committed to a mutually supportive
the world inspiration to create the future of electronics. relationship with the City and the region.
This new vision reflects Samsung Electronics’ commitment Guided by these values, we aim to build a University that
to inspiring its communities by leveraging Samsung’s three distinguishes itself in three ways:
key strengths: ‘New Technology’, ‘Innovative Products’,
and ‘Creative Solutions’. As part of this vision, Samsung Key objective 1: to be a world leader in research, by
has mapped out a specific plan of reaching $400 billion in being sufficiently large to be excellent, resilient and
revenue and becoming one of the world’s top five brands financially sustainable.
by 2020. To this end, Samsung has also established three Key objective 2: to offer outstanding teaching and
strategic approaches in its management: ‘Creativity’, ‘Part- learning, by being organised in the most efficient and
nership’, and ‘Talent’. effective way.
As we build on our previous accomplishments, we look
Key objective 3: to offer all our students an outstanding
forward to exploring new territories, including health, medi-
and valuable experience, by working effectively with
cine, and biotechnology. Samsung is committed to being a
other organisations and stakeholders.
creative leader in new markets, becoming No. 1 business in
the Global IT industry and in the Global top 5. Sources: Edited extracts from www.samsung.com and the University
of York Strategy, www.york.ac.uk
York University Strategy 2014–2020
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

York is a University with strong values. In all our activ-

ities, we are unconditionally committed to excellence, as
Questions
measured by the highest national and international stand- 1 Construct short strategy statements covering the goals,
ards. We see ourselves as operating in a global environ- scope and advantage of Samsung and the York Univer-
ment, with important local and national responsibilities sity. How much do the different private and public
and aim to be among the best universities in the world. We sector contexts matter?
encourage creativity, independence, enterprise and initia- 2 Construct a strategy statement for your own organisa-
tive. We support academic freedom and autonomy and we tion (university, sports club or employer). What impli-
promote open academic debate and discussion. We will be cations might this statement have for your particular
inclusive and provide equal opportunities for all. We apply course or department?
the highest ethical standards to all our activities and want to

1.2.4 Levels of strategy

So far we have considered an organisation as a whole, but inside an organisation, strategies
can exist at three main levels.

• Corporate-level strategy is concerned with the overall scope of an organisation

and how value is added to the constituent businesses of the organisational whole.
Corporate-level strategy issues include geographical scope, diversity of products or
services, acquisitions of new businesses, and how resources are allocated between the
different elements of the organisation. For Tesla, moving from car manufacture to battery
production for homes and businesses is a corporate-level strategy. Being clear about
corporate-level strategy is important: determining the range of businesses to include is
the basis of other strategic decisions, such as acquisitions and alliances.
• Business-level strategy is about how the individual businesses should compete in
their particular markets (this is often called ‘competitive strategy’). These might be
stand-alone businesses, for instance entrepreneurial start-ups, or ‘business units’ within
a larger corporation. Business-level strategy typically concerns issues such as innovation,
appropriate scale and response to competitors’ moves. For Tesla this means rolling out a
lower cost electric car to build volume and capture market share in advance of potential
competitor entry. In the public sector, the equivalent of business-level strategy is deci-
sions about how units (such as individual hospitals or schools) should provide best-value
services. Where the businesses are units within a larger organisation, business-level strat-
egies should clearly fit with corporate-level strategy.
• Functional strategies are concerned with how the components of an organisation
deliver effectively the corporate- and business-level strategies in terms of resources,
processes and people. For example, Tesla continues to raise external finance to fund its
rapid growth: its functional strategy is partly geared to meeting investment needs. In most
businesses, successful business strategies depend to a large extent on decisions that are
taken, or activities that occur, at the functional level. Functional decisions need there-
fore to be closely linked to business-level strategy. They are vital to successful strategy
implementation.

This need to link the corporate, business and functional levels underlines the importance
of integration in strategy. Each level needs to be aligned with the others. The demands of
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

integrating levels define an important characteristic of strategy: strategy is typically complex,

requiring careful and sensitive management. Strategy is rarely simple.

1.3 The Exploring Strategy Framework

In order to help you to evaluate an organisation’s strategy, this book provides a three-part
framework that emphasises the interconnected nature of strategic issues. The Exploring
Strategy Framework includes understanding the strategic position of an organisation;
assessing strategic choices for the future; and managing strategy in action. Figure 1.4
shows these elements and defines the broad coverage of this book. Together, the three
elements provide you with a practical template for studying strategic situations. The
following sections of this chapter will introduce the strategic issues that arise under each of
these elements of the Exploring Strategy Framework. But first it is important to understand
why the framework is drawn in this particular way.

Figure 1.4 could have shown the framework’s three elements in a linear sequence – first
understanding the strategic position, then making strategic choices and finally turning
strategy into action. Indeed, this logical sequence is implicit in the definition of strategy given
by Alfred Chandler (Figure 1.2) and many other textbooks on strategy. However, as Henry
Mintzberg recognises, in practice the elements of strategy do not always follow this linear
sequence. Choices often have to be made before the position is fully understood. Sometimes
too a proper understanding of the strategic position can only be built from the experience
of trying a strategy out in action. The real-world feedback from launching a new product is
often far better at uncovering the true strategic position than remote analysis carried out in
a strategic planning department at head office.
The interconnected circles of Figure 1.4 are designed to emphasise this potentially
non-linear nature of strategy. Position, choices and action should be seen as closely related,
and in practice none has priority over another. Although the book divides its subject matter
into three sections in sequence, this does not mean that the process of strategy must follow
a logical series of distinct steps. The three circles are overlapping and interdependent. The
evidence provided in later chapters will suggest that strategy rarely occurs in tidy ways and
that it is better not to expect it to do so.
However, the Exploring Strategy Framework does provide you with a comprehensive and
integrated framework for analysing an organisation’s position. It allows you to consider the
choices it has and how strategies might be put into action. You can use each of the chap-
ters to help you ask fundamental strategy questions and to select essential concepts and
techniques that will help you answer them. Working systematically through questions and
answers will provide you with the basis for persuasive strategy recommendations.

Figure 1.4 The Exploring Strategy Framework

Macro-
environment

Industry Stakeholders
Strategic
position
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Resources Culture

Business
Evaluating
strategy

Corporate
International Processes Organising
strategy Strategic Strategy
choices in action

Entrepreneur- Acquisitions Leading &

ship & alliances Practice
changing

1.3.1 Strategic position

The strategic position is concerned with the impact on strategy of the external environ-
ment, the organisation’s strategic resources and capabilities, the organisation’s goals and
the organisation’s culture. Understanding these four factors is central for evaluating future
strategy. These issues, and the fundamental questions associated with them, are covered in
the four chapters of Part I of this book:

• Strategic purpose. Most organisations claim for themselves a particular purpose, as encap-
sulated in their vision, mission, values and objectives. These may be captured in a key
strategy tool, the Strategy Statement. But often an organisation’s purpose is unclear,
contested or unrealistic. Chapter 1 explains the components of a strategy statement and
allows you to analyse an organisation’s strategic purpose and ask ‘what does it seek to
achieve?’ The three-horizons framework will also allow you to assess the sustainability of
an organisation’s strategy.
• Macro-environment. Organisations operate in complex multi-level environments. At the
macro level organisations are influenced by political, economic, social, technological,
ecological and legal forces. These may present both opportunities and threats for organ-
isations. Chapter 2 contains key frameworks such as PESTLE, forecasting approaches and
scenario cube to help you assess key drivers of change in the macro context that may affect
organisations and their industries.
• Industry and sector. At the industry level competitors, customers and suppliers also present
challenges. These environments vary widely in terms of their competitive pressures and
overall attractiveness and may present further opportunities and threats to the organ-
isation. Key frameworks such as Porter’s Five Forces, industry life cycle, strategic groups,
strategy canvas are all reviewed in detail with supporting examples in Chapter 3 to
help you focus your analysis on priority issues in the face of contextual complexity and
dynamism.
• Resources and capabilities. Each organisation has its own strategic resources (e.g. machines
and buildings) and capabilities (e.g. technical and managerial skills) that support its posi-
tion in a market. The fundamental question on capability regards the organisation’s
strengths and weaknesses (for example, where is it at a competitive advantage or disad-
vantage?). Are the organisation’s capabilities adequate to the challenges of its environ-
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ment and the demands of its goals? The key frameworks of VRIO, value chain, activity
systems and SWOT are all described in detail with examples in Chapter 4 to enable you to
analyse such resources and capabilities.
• Stakeholders and governance. The wishes of key stakeholders should define the purpose
of an organisation. Here the issue of corporate governance is important: how to ensure
that managers stick to the agreed purpose. Questions of purpose and accountability raise
issues of corporate social responsibility and ethics: is the purpose of an organisation an
appropriate one and are managers sticking to it? Techniques that enable you to iden-
tify stakeholders, assess their relative importance through the use of a power/attention
matrix, and identify the chain of corporate governance are described in Chapter 5.
• History and culture. Organisational cultures can also influence strategy. So can the cultures
of a particular industry or particular country. These cultures are typically a product of
an organisation’s history. The consequence of history and culture can be strategic drift,
a failure to create necessary change. A fundamental question here, therefore, is: how
does culture fit with the required strategy? Chapter 6 demonstrates how you can analyse,
challenge and even turn to your advantage the various cultural influences on strategy by
recognising different layers of culture and using the cultural web analysis

The Exploring Strategy Framework (Illustration 1.1) points to the following positioning
issues for Tesla Motors. What is the future of the company given the growing social, economic
and political demands for businesses to be environmentally sustainable? Are its distinctive
capabilities really valued sufficiently by consumers to provide a financial return to investors
and to allow sustained investment in further innovative products? How will Tesla cope with
rising competition from car industry giants that are now selling electric and hybrid cars?

1.3.2 Strategic choices

Strategic choices involve the options for strategy in terms of both the directions in which
strategy might move and the methods by which strategy might be pursued. For instance,
an organisation might have a range of strategic directions open to it: the organisation could
diversify into new products; it could enter new international markets; or it could transform its
existing products and markets through radical innovation. These various directions could be
pursued by different methods: the organisation could acquire a business already active in the
product or market area; it could form alliances with relevant organisations that might help
its new strategy; or it could try to pursue its strategies on its own. Typical strategic choices,
and the related fundamental questions, are covered in the five chapters that make up Part
II of this book, as follows:

• Business strategy and models. There are strategic choices in terms of how the organ-
isation seeks to compete at the individual business level. For example, a business unit
could choose to be the lowest cost competitor in a market, or the highest quality. The
fundamental question here, then, is what strategy, and what business model, should a
company use to compete? To help you decide, Chapter 7 explains the classic generic strat-
egies framework, the Strategy Clock, a key business model components framework and
common business models. Key dilemmas for business-level strategy, and ways of resolving
them, are also discussed.
• Corporate strategy and diversification. The highest level of an organisation is typically
concerned with issues of corporate scope; in other words, which businesses to include
in the portfolio. This relates to the appropriate degree of diversification, with regard to
products offered and markets served. Corporate-level strategy is also concerned both with
internal relationships, both between business units and with the corporate head-office.
Chapter 8 provides you with the corporate strategy directions framework, the BCG model,
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the directional policy framework and the parenting matrix to help you assess diversifica-
tion strategies and the appropriate relationships within the corporate portfolio.
• International strategy. Internationalisation is a form of diversification, but into new
geographical markets. Here the fundamental question is: where internationally should
the organisation compete? Chapter 9 shows you how to prioritise various international
options and key strategies for pursuing them, using an internationalisation drivers frame-
work, Porter’s Diamond, a global integration and local responsiveness matrix, the CAGE
framework, an international cross-comparison cultural model, an international compet-
itor retaliation framework and a subsidiary roles in multinational firms matrix.
• Entrepreneurship and innovation. Most existing organisations have to innovate constantly
simply to survive. Entrepreneurship, the creation of a new enterprise, is an act of innova-
tion too. A fundamental question, therefore, is whether the organisation is innovating
appropriately. Chapter 10 helps you make choices about entrepreneurship and innova-
tion. It shows how to make those choices based on an entrepreneurial opportunity recog-
nition model, steps in the entrepreneurial process framework, evaluating entrepreneurial
growth stages and innovation dilemmas models, the diffusion S-curve, the disruptive inno-
vation model and the portfolio of innovation options framework.

• Mergers, acquisitions and alliances. Organisations have to make choices about methods
for pursuing their strategies. Many organisations prefer to build new businesses with their
own resources. Other organisations develop by acquiring other businesses or forming alli-
ances with complementary partners. The fundamental question in Chapter 11, therefore,
is whether to buy another company, ally or to go it alone. To help you make this choice the
chapter contains an M&A process model, a post-acquisition matrix, a strategic alliances
motives figure, an alliance evolution model and a buy, ally or DIY decision tree.

Again, issues of strategic choice are live in the case of Tesla Motors (Illustration 1.1).
The Exploring Strategy Framework asks the following kinds of questions here. Should
Tesla continue to produce new higher volume cheaper cars or remain specialised? How far
should it widen the scope of its businesses: is producing batteries for homes really helping
or detracting from car production? Where should Tesla innovate next?

1.3.3 Strategy in action

Managing strategy in action is about how strategies are formed and how they are
implemented. The emphasis is on the practicalities of managing. These issues are covered
in the five chapters of Part III, and include the following, each with their own fundamental
questions:

• Evaluating strategies. Managers have to decide whether existing and forecast perform-
ance is satisfactory and then choose between options that might improve it. The funda-
mental evaluation questions are as follows: are the options suitable in terms of matching
opportunities and threats; are they acceptable in the eyes of significant stakeholders;
and are they feasible given the capabilities available? Chapter 12 introduces a range of
financial and non-financial techniques to help you appraise performance and evaluate
strategic options. To begin with the SAFE framework provides criteria for evaluating stra-
tegic performance, followed by many techniques including gap analysis, decision trees,
ROCE, DCF, sensitivity analysis, cost–benefit assessment, shareholder value analysis and
real options.
• Strategy development processes. Strategies are often developed through formal planning
processes. But sometimes the strategies an organisation actually pursues are emergent –
in other words, accumulated patterns of ad hoc decisions, bottom-up initiatives and rapid
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responses to the unanticipated. Given the scope for emergence, the fundamental ques-
tion is: what kind of strategy process should an organisation have? Chapter 13 helps you
to address the question of whether to plan strategy in detail or leave plenty of oppor-
tunities for emergence by showing how deliberate and emergent strategies develop, by
providing you with a strategic direction model and a strategy development in different
contexts framework.
• Organising and strategy. Once a strategy is developed, the organisation needs to organise
for successful implementation. Each strategy requires its own specific configuration of
structures and systems. The fundamental question, therefore, is: what kinds of structures
and systems are required for the chosen strategy? To help you answer this question,
Chapter 14 provides you with models of functional, multidivisional, matrix and multi-
national structures, a strategy styles matrix, a strategy map and the McKinsey 7-S.
• Leadership and strategic change. In a dynamic world, strategy inevitably involves change.
Managing change involves leadership, both at the top of the organisation and lower
down. There is not just one way of leading change, however: there are different styles

and different levers for change. So the fundamental question is: how should the organ-
isation manage necessary changes entailed by the strategy? Chapter 15 therefore helps
you to identify the drivers for change in the change kaleidoscope framework, examine
options for managing change with the styles of leadership matrix, the forcefield analysis
model and Kotter’s Eight Steps of Change Model, and considers how to choose between
them with the types of change framework.
• The practice of strategy. Inside the broad processes of strategy development and change
is a lot of hard, detailed work. The fundamental question in managing this work is:
who should do what in the strategy process? Chapter 16 thus helps you to understand
which people to include in the process with the ‘Who to include in Strategy Making?’
Matrix; what activities practitioners should do, such as using the formal channels for
issue-selling model; and which methodologies can help them do it, such as a hypoth-
esis testing approach. These kinds of practicalities are a fitting end to the book and
essential equipment for those who will have to go out and participate in strategy work
themselves.

With regard to strategy in action, the Exploring Strategy Framework raises the following
kinds of questions for Tesla. How will Tesla return value to shareholders going forwards?
How will the rate of innovation at Tesla be maintained? Should Tesla move towards a more
disciplined strategy development process rather than depend on the vision of Elon Musk?
Does Tesla need more structure and systems? As Tesla grows, how should any changes that
may be necessary be managed?
Thus the Exploring Strategy Framework offers you a comprehensive way for analysing an
organisation’s position, considering alternative choices, and selecting and implementing
strategies. This review of the main elements of the framework now allows us to refine and
extend our earlier broad definition of strategy in Section 2.1 to state that ‘Strategy is the
long term direction of an organisation, formed by choices and actions about its resources
and scope, in order to create advantageous positions relative to competitors and peers
in changing environmental and stakeholder contexts’. This definition and each chapter
provide a comprehensive checklist for strategy. These fundamental questions are summed
up in Table 1.1. Any assessment of an organisation’s strategy will benefit from asking these
questions systematically. The frameworks for answering these and related questions can be
found in the respective chapters.
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Table 1.1 The strategy checklist

Sixteen fundamental questions in strategy

Strategic position Strategic choices Strategy in action

1. What is the basic purpose of the 7. What business strategy and 12. Are strategies suitable, acceptable
organisation? model should be used? and feasible?
2. What are the macro- 8. Which businesses should be 13. What kind of strategy-making
environmental drivers for change? included in a portfolio? process is needed?
3. How can the organisation identify 9. Where should the organisation 14. What are the required
a competitive position? compete internationally? organisation structures and
4. What are the organisation’s 10. Is the organisation innovating systems?
distinctive capabilities? appropriately? 15. How should the organisation
5. What are stakeholders’ 11. Should the organisation buy manage necessary changes?
expectations? other companies, ally or go it 16. Who should do what in the
6. How does culture fit the strategy? alone? strategy process?

The logic of the Exploring Strategy Framework can be applied to our personal lives as
much as to organisations. We all have to make decisions with long-run consequences for our
futures and the issues involved are very similar. For example, in pursuing a career strategy,
a job-seeker needs to understand the job market, evaluate their strengths and weaknesses,
establish the range of job opportunities and decide what their career goals really are (posi-
tioning issues). The job-seeker then narrows down the options, makes some applications
and finally gets an offer (choice issues). Once the job-seeker has chosen a job, he or she sets
to work, adjusting their skills and behaviours to suit their new role (strategy in action). Just
as in the non-linear, overlapping Exploring Strategy Framework, experience of the job will
frequently amend the original strategic goals. Putting a career strategy into action produces
better understanding of strengths and weaknesses and frequently leads to the setting of
new career goals.

1.4 Working with strategy

Strategy itself is a kind of work that almost all levels of management have to engage in
and this is often co-evolved with powerful external stakeholders such as investors, regu-
lators and advisers, and even media. Within organisations it is not just the preserve of top
decision-makers but middle and lower-level managers also have to understand their organ-
isation’s strategic objectives and contribute to them as best they can. Managers have to
communicate strategy to their teams, and will achieve greater performance from them the
more convincing they are in doing so. Indeed, as responsibility is increasingly decentralised
in many organisations, middle and lower-level managers play a growing part in shaping
strategy themselves. Because they are closer to the daily realities of the business, lower-level
managers can be a crucial source of ideas and feedback for senior management teams.
Being able to participate in an organisation’s ‘strategic conversation’ – engaging with senior
managers on the big issues facing them – is therefore often part of what it takes to win
promotion.11
For many managers, then, strategy is part of the job. However, there are specialist strat-
egists as well, in both private and public sectors. Many large organisations have in-house
strategic planning or analyst roles.12 Typically requiring a formal business education of
some sort, strategic planning is a potential career route for many readers of this book, espe-
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

cially after some functional experience. Strategy consulting has been a growth industry
in the last decades, with the original leading firms such as McKinsey & Co., the Boston
Consulting Group and Bain joined now by more generalist consultants such as Accen-
ture, IBM Consulting and PwC, each with its own strategy consulting arm.13 Again, busi-
ness graduates are in demand for strategy consulting roles, such as that of Claudia in the
opening example.14
The interviews in Illustration 1.3 give some insights into the different kinds of strategy work
that managers and strategy specialists can do. Galina, the manager of an international subsid-
iary, Chantal, a strategy consultant, and Harminder, heading a strategy office in a not-for-
profit organisation all have different experiences of strategy, but there are some common
themes also. All find strategy work stimulating and rewarding. The two specialists, Chantal
and Harminder, talk more than Galina of analytical tools such as scenario analysis, sensitivity
analysis and hypothesis testing. Galina discovered directly the practical challenges of real-
world strategic planning, having to adapt the plan during the first few years in the United
Kingdom. She emphasises the importance of flexibility in strategy and the value of getting her
managers to see the ‘whole picture’ through involving them in strategy-making. But Chantal

and Harminder too are concerned with much more than just analysis. Chantal emphasises the
importance of gaining ‘traction’ with clients, building consensus in order to ensure implemen-
tation. Harminder also realises that delivering recommendations is just the beginning of the
strategy process and getting buy-in from key stakeholders is critical for implementation. He
sees strategy and delivery as intimately connected, with people involved in delivery needing
an understanding of strategy to be effective, and strategists needing to understand delivery.
Strategy, therefore, is not just about abstract organisations. It is about linking analysis with
implementation on the ground. It is complex work that real people do. An important aim of
this book is to equip readers to do this work better.

1.5 Studying strategy

This book is both comprehensive and serious about strategy. To understand the full range of
strategy issues – from analysis to action – it is important to be open to the perspectives and
insights of key disciplines such as economics, finance, marketing, sociology and psychology.
To be serious about strategy means to draw as far as possible on rigorous research about
these issues. This book aims for an evidence-based approach to strategy, hence the articles
and books referenced at the end of each chapter.15
This book therefore covers equally the three main branches of strategy research: conven-
tionally, these are known as strategy context, strategy content and strategy process. In terms
of the Exploring Strategy Framework (Figure 1.4), context broadly relates to positioning,
content to choice and process to action. Each of these branches contains various research
streams whose lessons can be readily applied to practical questions of strategy issues.
Figure 1.5 shows the three branches and their respective research streams: these are listed
in the approximate historical order of their emergence as strong research streams, the arrows
representing the continuously developing nature of each. In more detail, the three branches
and the characteristic analytical approaches of their main research streams are as follows:

• Strategy context refers to multiple layers of environment, internal and external to organ-
isations. All organisations need to take into account the opportunities and threats of
their external environments. Macro-environmental analysis has been an enduring theme
in strategy with early recognition of multiple pressures upon industries in the 1960s.
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

Figure 1.5 Strategy’s three branches

Context Content Process

(internal and external) (strategic options) (formation and implementation)

Research: Research: Research:

Macro-environmental Choice Strategic planning
Industry analysis and Choice and change
Cultural analysis performance Strategy-as-practice
Resource-based
view

Illustration 1.3 Strategists

For Galina, Chantal and Harminder, strategy is a large part of their jobs.
Galina Consulting work can involve financial and market
modelling (see Chapters 3 and 12), interviewing clients and
At the age of 33, after a start in marketing, Galina became customers, and working closely with the client’s own teams.
managing director of a Russian-owned British IT company. Chantal explains:
As well as developing the strategy for her local business,
she has to interact regularly with headquarters: ‘Moscow ‘As a consultant, you spend a lot of time in building solid
is interested in the big picture, not just the details. They are fact-based arguments that will help clients make business
interested in the future of the business.’ decisions. But as well as the facts, you have to have the
She had to adapt substantially the subsidiary’s strategic plans: ability to get traction. People have to agree, so you have
to build consensus, to make sure that recommendations
‘When we first came here, we had some ideas about are supported and acted on.’
strategy, but soon found the reality was very different to
the plans. The strategy was not completely wrong, but in Chantal summarises the appeal of strategy consulting: ‘I
the second stage we had to change it a lot: we had to change enjoy the learning, at a very high speed. There’s the oppor-
techniques and adapt to the market. Now we are in the third tunity to increase your skills. One year in consulting is like
stage, where we have the basics and need to focus on trends, two years in a normal business.’
to get ahead and be in the right place at the right time.’ Harminder
Galina works closely with her management team on
In his early forties, Harminder is a UK citizen working over-
strategy, taking them on an annual ‘strategy away-day’ (see
seas in Saudi Arabia, heading up a key part of the Strategy
Chapter 16): ‘Getting people together helps them see the
and Planning Office in a large hospital with a multi-million
whole picture, rather than just the bits they are responsible
pound investment responsibility.
for. It is good to put all their separate realities together.’
Galina is enthusiastic about working on strategy: ‘Rational linear analysis is very important here. We have an
abundance of data from all the major consultancies and
‘I like strategy work, definitely. The most exciting thing is
a number of high-profile US academic advisors and need
to think about where we have come from and where we
to assemble it for forecasting and trend analysis purposes.
might be going. We started in a pub five years ago and
A great deal of time is taken crafting documents for key
we have somehow implemented what we were hoping
stakeholders. Informally we use a range of strategy tools
for then. Strategy gives you a measure of success. It tells
and techniques including statistical analysis, scenario
you how well you have done.’
analysis (see Chapter 2), sensitivity analysis (see Chapter 12),
Her advice is: ‘Always have a strategy – have an ultimate hypothesis testing (see Chapter 16) and also carry out many
idea in mind. But take feedback from the market and from internal surveys to monitor implementation progress.’
your colleagues. Be ready to adjust the strategy: the adjust-
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Harminder has been surprised by the sheer amount of

ment is the most important.’
time and effort needed to consult key internal and external
Chantal stakeholders personally: ‘I have to consult every project
manager and director and, more importantly, politically
Chantal is in her early thirties and has worked in Paris for powerful and rich external stakeholders, regardless of their
one of the top three international strategy consultancies knowledge – and they have to be flattered to get buy-in.’
since graduating in business. Consulting was attractive to What Harminder likes about the job is making a difference
her originally because she liked the idea of helping organisa- by: ‘changing people’s perceptions, getting powerful individ-
tions improve. She enjoys strategy consulting because: ‘I like uals to make decisions and understand the reasons – rather
solving problems. It’s a bit like working on a mystery case: than hiding behind endless committees (see Chapter 16).’
you have a problem and then you have to find a solution to
Source: interviews (interviewees anonymised).
fit the company, and help it grow and to be better.’
The work is intellectually challenging:
‘Time horizons are short. You have to solve your case in
two to three months. There’s lots of pressure. It pushes
Questions
you and helps you to learn yourself. There are just three 1 Which of these strategy roles appeals to you most –
to four in a team, so you will make a significant contri- manager of a business unit in a multinational, strategy
bution to the project even as a junior. You have a lot of consultant or in-house strategy specialist? Why?
autonomy and you’re making a contribution right from 2 What would you have to do to get such a role?
the start, and at quite a high level.’

Subsequently researchers have focused upon various additional themes including insti-
tutional pressures establishing the ‘rules of the game’ within which companies operate.
Industry analysis took off as a research tradition in the early 1980s, when Michael Porter
showed how the tools of economics could be applied to understanding what makes indus-
tries attractive (or unattractive) to operate in.16 From the 1980s too, cultural analysts have
used sociological insights into human behaviour to point to the importance of shared
cultural understandings about appropriate ways of acting. In the internal context, cultural
analysts show that strategies are often influenced by the organisation’s specific culture.
In the external context, they show how strategies often have to fit with the surrounding
industry or national cultures. Resource-based view researchers focus on internal context,
looking for the unique characteristics of each organisation.17 According to the resource-
based view, the economic analysis of market imperfections, the psychological analysis of
perceptual or emotional biases, and the sociological analysis of organisational cultures
should reveal the particular characteristics (resources) that contribute to an organisation’s
specific competitive advantages and disadvantages.

• Strategy content concerns the content (or nature) of different strategies and their prob-
ability of success. Here the focus is on the merits of different strategic options. Strategy and
performance researchers started by using economic analysis to understand the success of
different types of diversification strategies. This research continues as the enduring central
core of the strategy discipline, with an ever-growing list of issues addressed. For example,
contemporary strategy and performance researchers examine various new innovation
strategies, different kinds of internationalisation and all the complex kinds of alliance
and networking strategies organisations adopt today. These researchers typically bring
a tough economic scrutiny to strategy options. Their aim is to establish which types of
strategies pay best and under what conditions. They refuse to take for granted broad
generalisations about what makes a good strategy.
• Strategy process, broadly conceived, examines how strategies are formed and imple-
mented. Research here provides a range of insights to help managers in the practical
processes of managing strategy.18 From the 1960s, researchers in the strategic planning
tradition have drawn from economics and management science in order to design rational
and analytical systems for the planning and implementing of strategy. However, strategy
involves people: since the 1980s, choice and change researchers have been pointing to how
the psychology of human perception and emotions, and the sociology of group politics
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and interests, tend to undermine rational analysis.19 The advice of these researchers is
to accept the irrational, messy realities of organisations, and to work with them, rather
than to try to impose textbook rationality. Finally, strategy-as-practice researchers have
recently been using micro-sociological approaches to closely examine the human real-
ities of formal and informal strategy processes.20 This tradition focuses attention on how
people do strategy work, and the importance of having the right tools and skills.

From the above, it should be clear that studying strategy involves perspectives and insights
from a range of academic disciplines. Issues need to be ‘explored’ from different points of
view. A strategy chosen purely on economic grounds can easily be undermined by psycho-
logical and sociological factors. On the other hand, a strategy that is chosen on the psycho-
logical grounds of emotional enthusiasm, or for sociological reasons of cultural acceptability,
is liable to fail if not supported by favourable economics. As underlined by the four strategy
lenses to be introduced later, one perspective is rarely enough for good strategy. A complete
analysis will typically need the insights of economics, psychology and sociology.

1.6 Exploring strategy further

So far we have stressed that strategic issues are typically complex, best explored from a
number of points of view. There is no simple, universal rule for good strategy. This section
introduces two further ways of exploring strategy: one depending on context, the other
depending on perspective.

1.6.1 Exploring strategy in different contexts

Although the basic elements of the Exploring Strategy Framework are relevant in most
circumstances, how they play out precisely is likely to differ according to organisational
contexts. To return to Illustration 1.2, both Samsung and York University share some funda-
mental issues about how to compete and what activities they should have in their portfolio.
However, for a Korean electronics company and a British university, the role of institutions,
particularly government, varies widely, affecting the freedom to choose and the ability to
change. In applying the Exploring Strategy Framework, it is therefore useful to ask what kinds
of issues are likely to be particularly significant in the specific context being considered. To
illustrate, this section shows how issues arising from the Exploring Strategy Framework can
vary in three important organisational contexts.

• Start-ups and small businesses. With regard to positioning, small businesses will certainly
need to attend closely to the environment, because they are so vulnerable to change. But,
especially in small entrepreneurial businesses, strategic purpose will be a determining
issue: for instance this may not necessarily just be profit, but might include objectives such
as remaining independent and maybe even a pleasant lifestyle. The range of strategic
choices is likely to be narrower than for larger businesses: for a small business acquisi-
tions may not be affordable, though they may have to decide whether to allow them-
selves to be acquired. Some issues of strategy in action will be different; for example
strategic change processes will not involve the same challenges as for large, complex
organisations.
• Multinational corporations. In this context, positioning in a complex global marketplace
will be very important. Each significant geographical market may call for a separate
analysis of the business environment. Likewise, operating in many different countries will
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

raise positioning issues of culture: variations in national culture imply different demands
in the marketplace and different managerial styles internally. Strategic choices are likely to
be dominated by international strategy questions about which geographical markets to
serve. The scale and geographical reach of most multinationals point to significant issues
for strategy in action, particularly those of organisational structure and strategic change.
• Family businesses. These firms vary widely in size and scope so their positioning issues will
range widely depending upon competitive strength in their industry. However, this may not
be the most important positioning issue as strategic purpose may be a defining issue. For
instance, profit may not be of foremost consideration as objectives such as family control,
handing over to the next generation and maybe even a pleasant lifestyle may be regarded
as of greater importance. Depending on the size of the family business, resource constraints
may or may not be a limiting issue in terms of strategic options but for large initiatives such
as making an acquisition, or being acquired, family concerns will probably be uppermost in
decision makers’ minds. In terms of strategy in action, family businesses are likely to need
to deal with particular complexities around strategic change and leadership.

• Public sector and not-for-profits. Positioning issues of competitive advantage will be

important even in these contexts, but have a different flavour. Charitable not-for-profits
typically compete for funds from donors; public-sector organisations, such as schools and
hospitals, often compete on measures such as quality or service. The positioning issue of
purpose is likely to be very important too. In the absence of a clear, focused objective such
as profit, purpose in the public sector and not-for-profits can be ambiguous and conten-
tious. Strategic choice issues may be narrower than in the private sector: for example,
there may be constraints on diversification. Strategy-in-action issues often need close
attention, leadership and change typically being very challenging in large public-sector
organisations.

In short, while drawing on the same basic principles, strategy analysis is likely to vary in
focus across different contexts. As the next section will indicate, it is often helpful therefore
to apply different lenses to strategy problems.

1.6.2 Exploring strategy through different ‘strategy lenses’

Exploring is a distinctive feature of this book and it means being critical of existing approaches
as well as looking for new and different things. In particular, exploring strategy involves
searching for new angles on strategic problems as we believe a comprehensive assessment
of an organisation’s strategy needs more than one perspective. In order to help you build
your awareness of different perspectives on strategy we introduce ‘four strategy lenses’.
These lenses present distinct, theoretically informed perspectives on strategy that enable
you to perceive different ways of perceiving strategy. The four strategy lenses cover ways
of looking at strategy issues differently in order to generate additional insights. These
different perspectives will help you criticise prevailing approaches and raise new issues or
solutions. Thus, although drawn from academic theory, the lenses should also be highly
practical in the job of doing strategy.
The four strategy lenses consist of:

• Strategy as design, which might be likened to an architect’s approach that is systematic,

analytical and logical.
• Strategy as experience, which recognises that taken-for-granted assumptions and ways of
doing things, biases and routines, will influence strategy.
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

• Strategy as variety, which focuses on new ideas and innovation bubbling up in unpredict-
able ways in an organisation.
• Strategy as discourse, which focuses upon the ways that managers use language to influ-
ence strategy making – that strategy talk matters.

None of these lenses is likely to offer a complete view of a strategic situation. The point of
the lenses is to encourage the exploration of different perspectives: first from one point of
view and then from another. This might help in recognising how otherwise logical strategic
initiatives might be held back by cultural experience, unexpected ideas and self-interested
strategy discourse.
To appreciate the full value that the four strategy lenses framework brings to your under-
standing of strategy, it is fully described at the end of Part I, after you have had a chance to
work with some key strategy frameworks for analysing strategic position. The four lenses are
revisited after each succeeding section of the book so that you can develop deeper insights
into those sections.

Summary
• The basic definition of strategy is the long-term direction of an organisation. A more full
definition is: ‘Strategy is about the long-term direction of an organisation, formed by
choices and actions about its resources and scope, in order to create advantageous posi-
tions relative to changing environment and stakeholder contexts.’
• The work of strategy is to define and express the purpose of an organisation through its
mission, vision, values and objectives.
• Ideally a strategy statement should include an organisation’s goals, scope of activities and
the advantages or capabilities it brings to these goals and activities.
• Corporate-level strategy is concerned with an organisation’s overall scope; business-level
strategy is concerned with how to compete; and functional strategy is concerned with how
corporate- and business-level strategies are actually delivered.
• The Exploring Strategy Framework has three major elements: understanding the strategic
position, making strategic choices for the future and managing strategy in action.
• Strategy work is done by managers throughout an organisation, as well as specialist stra-
tegic planners, and external executives such as strategy consultants and investors.
• Research on strategy context, content and process shows how the analytical perspectives
of economics, sociology and psychology can all provide practical insights for approaching
strategy issues.
• Although the fundamentals of strategy may be similar, strategy varies by organisational
context, for example small business, multinational or public sector.
• The four strategy lenses, of design, experience, variety and discourse, will allow you to
critically evaluate strategic issues from a variety of perspectives.

Work assignments
✱ Denotes more advanced work assignments.
* Refers to a case study in the Text and Cases edition.

of your choice (for example, the Airbnb end of chapter case, or your university),
drawing on strategy materials in the organisation’s annual report or website.
1.2 Using the Exploring Strategy Framework of Figure 1.4, map key issues relating to
strategic position, strategic choices and strategy into action for either the Lego* or
Glastonbury* cases, or an organisation with which you are familiar (for example,
your university).
1.3 Go to the website of one of the major strategy consultants such as Bain, the Boston
Consulting Group or McKinsey & Co. (see reference 13 below). What does the
website tell you about the nature of strategy consulting work? Would you enjoy that
work?
1.4✱ Using Figure 1.4 as a guide, show how the elements of strategic management differ
in:
(a) a small or family business (e.g. Adnams*, Feed Henry*, Leax* or Hotel du Vin*)
(b) a large multinational business (e.g. Vodafone*, Megabrew*, Unilever*)
(c) a non-profit organisation (e.g. Aids Alliance*, GMB* or Queensland Rail*).

Figure 1 Airbnb early growth story

AirBnB – From 3 guys renting mattress to $10 billion in seven years

(Joe) (Brian) (Nathan)

2007

In 2007 They decide They create a Three people The seed of a A third friend
Launched at
two guys, Brian to rent out air simple website show up and pay good idea – Nathan – is
SXSW – but
and Joe, live in mattresses to $80 each formed brought
only got two
San Francisco make some money on board
bookings
but can’t pay
their rent 2009
A friend asked
2008 Brian if that was
their only idea

(friend)

Travelled around Lightbulb moment The company In 2009 for their In 2008 they
properties in NYC – the pictures on stagnated at $200 first $20,000 in were selling
taking their own the website were a week for months funding Obama O’s – raised
photos not good $30,000
2014
Aha! 2010-2011
No

ONE
WEEK
LATER

$400 a week But were still Still in 2009 Barry Raised $60,000 In 2010 and 2011
and growing rejected by a Manilow’s drummer seed round raised $7.2 million
famous VC rented a whole house and then $112 million
in investments In 2014 AirBnB was
valued at $10 billion!

Barcelona and Milan. Airbnb’s growth was explosive with welcoming note suggesting good places nearby to eat
a higher valuation than Hyatt and Wyndham hotel groups out and convenience shops. Staying in another person’s
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

by 2014 and more guest nights booked than Hilton Hotels apartment makes the visitor feel far more at home than
(see Figure 2). By 2016 Airbnb was valued at $25bn – more an anonymous hotel room. For many young guests and
than any other hotel group. The company justified its hosts, Airbnb fitted into the contemporary sharing culture
valuation by claiming that, when its price ($25bn) to sales exemplified by Easy car club, where users can rent their
ratio of 27.8 (based on estimated sales of $900m for 2015) car to others, and Girl Meets Dress, that allows girls to
is divided by its high growth rate of 113 per cent per year, borrow and lend their dresses for special occasions. For
the resulting value for the group is broadly in line with the hosts, rents provide a source of income to help pay for
sector.3 Airbnb forecasts $10bn of revenues by 2020, with soaring accommodation costs in many major cities.
$3bn of profits before tax.
Airbnb proved attractive to guests and hosts as its Managing growth
listings were far superior to others available at the time,
CEO Brian Cesky penned a memo in 2013 to his top
such as Craiglist. They were more personal, with better
management team, as follows:4
descriptions and nicer photos. The rooms were cheaper
than equivalent ones at hotels and had more of a personal Hey team,
flavour. For instance in a recent stay in Paris a user noted Our next team meeting is dedicated to Core Val-
the host had left a selection of food in the refrigerator, ues, which are essential to building our culture. It
a bottle of wine on the counter for her guests and a occurred to me that before this meeting, I should

Figure 2 Guest arrivals

140 100.00%

120
80.00%
Guest arrivals (millions)

100
Estimated guest arrivals
80 60.00%

60 Percentage change year

40.00%
on year
40
20.00%
20

0 0.00%
2013 2014 2015 2016 2017
Date

write you a short letter on why culture is so import- staff in every office in the world dedicated to making the
ant to [co-founders] Joe, Nate, and me. company culture ‘come alive’, organising pop-up birthday
. . . In 2012, we invited Peter Thiel [a major in- celebrations, anniversary parties or baby showers. The
vestor] to our office. This was late last year, and we company is rigorous in its recruitment policy, committed
were in the Berlin room showing him various met- to hiring ‘missionaries, not mercenaries’.
rics. Midway through the conversation, I asked him At the same time, the founders had begun to ask them-
what was the single most important piece of advice selves again: ‘What is our mission? What is the big idea
he had for us. that truly defines Airbnb?’ As they recalled in their own
He replied, ‘Don’t f*** up the culture.’ words: ‘It turns out the answer was right in front of us.
This wasn’t what we were expecting from some- For so long, people thought Airbnb was about renting
one who just gave us $150m. I asked him to elab- houses. But really, we’re about home. You see, a house is
orate on this. He said one of the reasons he invest- just a space, but a home is where you belong. And what
ed in us was our culture. But he had a somewhat makes this global community so special is that for the very
cynical view that it was practically inevitable once a first time, you can belong anywhere. That is the idea at the
company gets to a certain size to ‘f*** it up’. core of our company.’6
Source: Founder and CEO Brian Cesky penned a memo in 2013
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

Accordingly, the company began to manage its

Airbnb in 2018
culture more deliberately. For example, Joe had become In 2018, Airbnb had an estimated 5.3 million listings in
concerned that as the company grew, it had become 81,000 cities in 191 countries, with an estimated 115
less open to dialogue. To encourage more discussion, he million guest arrivals in 2017 (see Figure 2). Anyone
invented the notion of ‘elephants, dead fish and vomit’. anywhere in the world can list spare space from a room
As he explains: ‘Elephants are the big things in the room to a tree house, from a castle to an island in Fĳi, with
that nobody is talking about, dead fish are the things that prices ranging from $50 to $2000 per night. The head-
happened a few years ago that people can’t get over, and quarters’ walls were covered with world maps dotted
vomit is that sometimes people just need to get some- with hundreds of coloured pins, charting world domi-
thing off their mind and you need someone to just sit nation. Airbnb was so popular that one of their rooms
there and listen.’5 All three need to be aired. Airbnb also was booked every two seconds.7
established a series of annual meetings called One Airbnb, The company was now focused on the whole travel
bringing together employees (called ‘Airfam’) from all trip with an emphasis on delivering local experiences.
around the world to the San Francisco base for four-day This focus on hospitality was not just about where you
conferences at which everyone can meet the founders, stay, but what you do – and whom you do it with – while
discuss strategy and also talk about both their work roles you’re there. To this end they introduced Airbnb Neigh-
and their hobbies. The company has ‘ground control’ bourhoods and local lounges, partnering with local coffee

shops that can offer free wifi, a comfortable setting and References
local guidebooks. They also acquired a small start-up that 1. Forbes.com (2018) ‘As a rare profitable unicorn, Airbnb appears to
be worth at least $38 Billion’, Trefis team, 11 May.
connects guests with locals who can answer their ques- 2. Salter, J. (2012) ‘Airbnb: The story behind the $1.3bn room-letting
tions. They also offer cleaning services. website’, The Telegraph, 7 September; Lee A. (2013) ‘Welcome
Airbnb was providing a strong challenge to hotels To The Unicorn Club: Learning From Billion-Dollar Startups’,
Techcrunch, 2 November, https://techcrunch.com/2013/11/02/
with prices 30–80 per cent lower than local operators. welcome-to-the-unicorn-club/.
San Francisco hotels were having to slash prices to 3. A ratio of price /sales to revenue growth rate gives Airbnb a figure
of 24.6 against Marriott at 19.2, Wyndham at 34.1 and Expedia
protect their occupancy rates. Incumbents in the industry
at 12.2. (Guest post, ‘Why that crazy-high AirBnB valuation is fair,
fought back by arguing Airbnb rooms were dangerous www.valuewalk.com, 1 January 2016).
and unsafe as they were unregulated. Although one 4. https://medium.com/@bchesky/
dont-fuck-up-the-culture-597cde9ee9d4\#.5wd5kwtdm.
must have a permit to rent for under 30 days, San
5. B.Clune, ‘How Airbnb is building its culture through belonging’,
Francisco residents were still illegally listing personal Culture Zine.
homes and apartments. Similar problems were being 6. http://blog.airbnb.com/belong-anywhere/.
7. Zacks.com (2015) ‘Investing in resting: is Airbnb a top 2016 IPO
experienced in New York where an ‘illegal hotel law’ was candidate?’ 11 December 2015.
passed preventing people from subletting apartments
for less than 29 days and other cities across the world
including Barcelona and Amsterdam and Japan imposed
stringent regulations. In the EU Airbnb has been given
an ultimatum about the lack of price transparency and Questions
in the background there are question marks over hosts 1 Sticking to the 35-word limit suggested by Collis and
not paying tax on earnings. Rukstad in Section 1.2.3, what strategy statement
During 2016, Airbnb redesigned its website and apps would you propose for Airbnb?
with subtle animations and flashier imagery to make a
2 Carry out a ‘three-horizons’ analysis (Section 1.2.1)
transition from a hotel service to a lifestyle brand. Airbnb
of Airbnb, in terms of both existing activities and
wanted their logo to be seen on a variety of products,
possible future ones. How might this analysis affect its
houses, and businesses, so people understood that
future strategic direction?
owners supported their ideal and their brand. Airbnb’s
focus was now firmly on ‘belonging’. This rebranding 3 Using the headings of environment, strategic
may not have been before time, as competition was capability, strategic purpose and culture seen in
brewing in the US from vacation rental site HomeAway Section 1.3.1, identify key positioning issues for
Inc. (owned by Expedia), Roomorama, HouseTrip, Flipkey Airbnb and consider their relative importance.
and Travel Advisor holiday rentals. Indeed websites have 4 Following on from the previous questions and
sprung up such as www.airbnbhell.com that list a string making use of Section 1.3.2, what alternative strat-
of internet accommodation providers. Nonetheless, egies do you see for Airbnb?
at the time of writing Airbnb was rumoured to be the 5 Converting good strategic thinking into action can be
Copyright © 2019. Pearson Higher Education & Professional Group. All rights reserved.

hottest IPO (an initial public offering of its stock to inves- a challenge: examine how Airbnb has achieved this
tors) tip for 2020. by considering the elements seen in Section 1.3.3.

Industry I Stakeholders
Strategic
position

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Exploring Strategy, Text and Cases - (1 Introducing Strategy)

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Exploring Strategy, Text and Cases - (1 Introducing Strategy)

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Chapter 1

Key terms Learning outcomes

mission statement 8 • Identify key issues for an organisation’s strategy

Figure 1.1 Strategy: its definition, purpose, analysis and work

The purpose of strategy

The Exploring Strategy Framework

Working with strategy

1.1.1 Why ‘Exploring Strategy’?

informed, grounded solutions to complex strategic problems.

1.2 What is strategy?1

1.2.1 Defining strategy

Figure 1.2 Definitions of strategy

‘. . . the determination of the long-run goals and objectives of an

‘Competitive strategy is about being different. It means deliberately choosing a

‘a firm’s theory about how to ‘a pattern in a stream of ‘the long-term direction of an

Figure 1.3 Three horizons for strategy

Horizon 3 > create viable options

Horizon 1 > extend and defend core business

Illustration 1.1 Tesla Motors: the future is electric!

Tesla’s strategy is ‘to succeed in the high end of the market,

1.2.2 The purpose of strategy: mission, vision, values

1.2.3 Strategy statements

• Scope. An organisation’s scope or domain refers to three dimensions: customers or clients;

Illustration 1.2 Strategy statements

York is a University with strong values. In all our activ-

1.2.4 Levels of strategy

• Corporate-level strategy is concerned with the overall scope of an organisation

integrating levels define an important characteristic of strategy: strategy is typically complex,

1.3 The Exploring Strategy Framework

Figure 1.4 The Exploring Strategy Framework

Entrepreneur- Acquisitions Leading &

1.3.1 Strategic position

1.3.2 Strategic choices

1.3.3 Strategy in action

Table 1.1 The strategy checklist

Sixteen fundamental questions in strategy

Strategic position Strategic choices Strategy in action

1.4 Working with strategy

1.5 Studying strategy

Figure 1.5 Strategy’s three branches

Context Content Process

Research: Research: Research:

Illustration 1.3 Strategists

Harminder has been surprised by the sheer amount of

1.6 Exploring strategy further

1.6.1 Exploring strategy in different contexts

• Public sector and not-for-profits. Positioning issues of competitive advantage will be

1.6.2 Exploring strategy through different ‘strategy lenses’

• Strategy as design, which might be likened to an architect’s approach that is systematic,

Recommended key readings

Figure 1 Airbnb early growth story

AirBnB – From 3 guys renting mattress to $10 billion in seven years

(Joe) (Brian) (Nathan)

Figure 2 Guest arrivals

60 Percentage change year

Accordingly, the company began to manage its

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