RDI BTEC Level 7 Strategic Management 2017
SP - 1 Theoretical Perspective and Strategic Planning Process
Wikipedia’s Definition: Strategy
• Strategy, a word of military origin, refers to a plan of action designed to achieve a particular goal. In military usage strategy is distinct from tactics, which are concerned with the conduct of an engagement, while strategy is concerned with how different engagements are linked. How a battle is fought is a matter of tactics: the terms and conditions that it is fought on and whether it should be fought at all is a matter of strategy, which is part of the four levels of warfare: political goals or grand strategy, strategy, operations, and tactics. (Source: http://en.wikipedia.org/wiki/Strategy)
The Role of Strategy Value Creation
• Creating value means doing something different or better than the next best.
• Differentiation and cost
“What we will not do” is at least as important as “what we will do” Strategy as
• You cannot be all things to all people Choice
• Moving to the frontier (“operational excellence”) versus taking a position (“strategic choice”) Resources,
• Resources: tangible and intangible Capabilities &
• Capabilities: ability to acquire and deploy resources to solve classes of problems and create value Position
• Position: attractiveness (cost/differentiation) relative to others – Applies resources – Utilises capabilities
Mintzberg’s Ten Schools of Thought
• The Design School
• The Planning School
• The Positioning School
• The Entrepreneurial School
• The Cognitive School
• The Learning School
• The Power School
• The Cultural School
• The Environmental School
• The Configuration School
Thinking Strategically: The Three Big Strategic
1. Where are we now -- what is our situation? 2. Where do we want to go? – Business(es) we want to be in and market positions we want to stake out – Buyer needs and groups we want to serve – Outcomes we want to achieve
3. How will we get there?
The Six Steps of the Strategy Making Process
Select the corporate mission and the major corporate goals.
Analyze the external competitive environment to identify opportunities and threats.
Analyze the organization’s internal environment to identify its strengths and weaknesses.
Select strategies that:
Build on the organization’s strengths and correct its weaknesses – in order to take advantage of external opportunities and counter external threats Are consistent with organization’s mission and major goals Are congruent and constitute a viable business model Implement the strategies. Feedback
SWOT Analysis and Business Model
• SWOT analyses help to identify strategies that align a company’s resources and capabilities to its environment – in order to create and sustain a competitive advantage.
• Functional strategies should be consistent with and support the company’s business level and global strategies. – Functional-level strategy – directed at operational effectiveness – Business-level strategy – businesses’ overall competitive themes – Global strategy – expand, grow and prosper at a global level – Corporate-level strategy – to maximize profitability and profit growth
• Putting those strategies into action: – Implementation and execution of the strategic plans – Design of the best organization structure – Consistency of strategy with company culture – Control systems to measure and monitor progress – Governance systems for legal and ethical compliance – Consistency with maximizing profit and profit growth
• Managers must monitor strategy execution: – To determine if strategic goals and objectives are being achieved – To evaluate to what extent competitive advantage is being created and sustained
• Managers must monitor and reevaluate for the next round of strategy formulatStakeholders
• Any individual, group, organization, department, structure or network with a vested interest in a particular issue.
• They stand to gain or lose if conditions stay the same of if conditions change as they have a stake, they have rights, possibly ownership, potentially essential information includes the ideas of “participant,” “involved/responsible party,” and “recipient”.ion and implementation Strategic planning is ongoing.
Kotter and Schlesinger (1979) 6 Approaches to Managing Resistance
• Education and communication
• Participation and involvement
• Facilitation and support
• Negotiation and agreement
• Manipulation and co-option
• Explicit and implicit coercion