Strategic management chapter 1
Strategy is the direction and scope of an org over the long-term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.
Characteristics of strategic decisions
• Long-term direction
• The scope of an organisation’s activities
• Advantages being obtained over competitors
• Strategic fit with the business environment- addressing change in the business environment
• The organisation’s resources and competences- strategy is about exploiting the strategic capability of an org, to provide competitive advantage and/or yield new opportunities.
• The ...view middle of the document...
Also concerned with expectations of the owners (shareholders and stock market). Can take form in an explicit/implicit mission statement. Being clear about it is important.
Business-level strategy (otherwise known as competitive strategy)
This is the second level which is about how the various business included in the corporate strategy should compete in their particular markets. In the public sector, this typically concerns issues such as pricing strategy, innovation or differentiation.
This is the third level, which is concerned with how the component parts of an org deliver effectively the corporate- and business-level strategies in terms of resources, processes and people. Successful business strategies depend to a large extent on decisions that are taken, or activities that occur at the operational level.
Vocabulary of strategy (not all terms are used in orgs or strategy books)
Mission- overriding purpose in line with the values or expectations of stakeholders
Vision or strategic intent- desired future state: aspiration of the organisation
Goal- General statement of aim or purpose
Objective- quantification (if possible) or more precise statement of the goal
Strategic capability- concerned with resources and competences that an org can use to provide value to customers or clients. Some will be unique and provide ‘competitive advantage’
Strategies- long-term direction
Business model- how product, service and information ‘flow’ between participating parties
Control- the monitoring of action steps to i) assess effectiveness of strategies and actions; ii) modify as necessary strategies and/or actions
It underlines the importance of managers with regard to strategy as they do not happen just by themselves. Strategy involves people, especially managers who decide and implement strategy.
It is concerned with complexity arising out of ambiguous and non-routine situations with organisation-wide rather than operation-specific implications.
It is thought to have three main elements which are the strategic position of an org, strategic choices for the future and managing strategy in action.
The environment- org exists in the context of a complex political, economic, social, technological, environmental and legal world. This environment changes and is more complex for some orgs than others. Many of these variables will give rise to opportunities and others will exert threats on the org- or both. One problem that must be faced is that the range of variables may be so great that it may not be possible or realistic to identify and understand each one.
The strategic capability- made up of resources and competences. One way of thinking about this is to consider the strengths and weaknesses. The aim is to form a view of the internal influences- constraints- on strategic choices for the future. It is usually a combination of resources and high...