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Mid-term exam 15
• Choosing
the “right
industries”
• Attractive
competitive
positions
• Adoption of
strategies is
constrained
by the level
of resources
• Resource-
based view
(RBV)
Strategy
• 1980’s – External analysis / Industry analysis
• Michael Porter (Five Forces Analysis) – Competitive Strategy &
Competitive Advantage
• 1990’s – Internal view / core competence
• Resource Based View, resources & capabilities
• Penrose (1959) – Theory of the Growth of the Firm
• Barney, Wernerfelt, Peteraf, Collis, Montgomery
• Dynamic capabilities (David Teece, 1997)
• 1990s & beyond – Corporate Governance, International
Business, Bottom of Pyramid (BOP) strategy, Strategic
Change Management, Strategic Leadership, Business
Groups, Ethics, CSR, Sustainability
THE STRATEGY CONCEPT
Classic Definitions/Quotes…
If we wish to increase the yield of grain in a certain
field, and
• on analysis it appears that the soil lacks potash,
• then potash may be said to be the strategic or
limiting factor
Chester Barnard
The term “strategy” … is intended to focus on
• the interdependence of the adversaries’ decisions
• and on their expectations about each others’
behaviour
Thomas Schelling
Classic Definitions/Quotes
Strategy can be defined as
• the determination of the basic long-term goals and
objectives of an enterprise, and
• the adoption of courses of action and
• the allocation of resources necessary for carrying
out those goals
Alfred Chandler
When an industry with a reputation for difficult
economics
• meets a manager with a reputation for excellence,
• it is usually the industry that keeps its reputation
intact
Warren Buffet
‘Wh’ Questions & Linkages to Strategy
• WHAT? – (Content)
• Correlations & Regressions – Attempts to find out
the various factors that can impact a dependent
variable, e.g. Firm Performance (ROI), Innovation
• HOW? – (Process)
• Helps understand the elements & the process
• Looks at the inter-linkages and sequences
• WHY? – (Explanation / Causality)
• More deep-rooted & difficult to address
• Attempts to find out the causal relationships
What is Strategy?
• Marketing – right product at the right price at
the right place with the right message
• Manufacturing – delivering products in the right
quantity of the right quality at the right cost at
the right time
• Using the word “right” the right number of times
• Strategy – being in the right business
1. What business are you in? – (define)
2. Is it an attractive business? – (external analysis)
3. Is it the right business for you? – (internal analysis)
The Strategy Concept
• Strategy Formulation
• External analysis
• Macro environment & Industry analysis
• Internal analysis
• Business-level strategies – cost leadership vs
differentiation, narrow vs broad market segments
• Corporate-level strategies – diversification, vertical
integration, M&As, JVs, etc.
• Strategy Implementation / Execution
• Incentives & Control systems (e.g. DSS, MIS, KM)
• Organizational Structure
The Strategy Landscape
Strategy
Strategy Strategy
Formulation Implementation