PRESENTATION SLIDES
To accompany:
Contemporary Strategy Analysis
(6th edition, Blackwell Publishing, 2008)
Robert M. Grant
Assisted by Kate Grant
The Concept of Strategy
OUTLINE
• The role of strategy in success
• A framework for strategy analysis
• The evolution of strategic management
• Corporate strategy and business strategy
• Strategy making: Design or process?
• The role of strategy
Components of Success
MADONNA
GOALS
Single-minded quest for
stardom.
GIAP & NORTH
VIETNAMESE
Reunification of
Vietnam under
Communist rule.
LANCE ARMSTRONG
Winning the Tour de
France
UNDERIdentified emerging
Intimate knowledge of
STANDING THE trends in popular culture. terrain Understanding
ENVIRONMENT Understood key success U.S. political system.
factors in showbiz
Diagnosis of the
physical, psychological
and strategic
determinants of
individual and team
performance
RESOURCE
APPRAISAL
Recognized limited raw
talent. Exploited
strengths in selfpromotion, product
development &
relationship management
Recognized economic
and military
weaknesses and core
political strengths
Systematic
development of
individual stamina and
team capabilities
IMPLEMENTATION
Commitment and
discipline. Charismatic
leadership. Team
building. Attention to
detail.
Tight control. Longterm commitment.
Effective propaganda.
Inspirational
leadership.
Clear delineation of
individual roles.
Alignment of incentives
with team goals.
Nurturing esprit de corp
What Makes a Successful Strategy?
Successful
Strategy
EFFECTIVE IMPLEMENTATION
Long-term,
simple and
agreed
objectives
Profound
understanding of
the competitive
environment
Objective
appraisal of
resources
What is Strategy?
• Distinguishing strategy from tactics:
– Strategy is the overall plan for deploying
resources to establish a favorable position.
– Tactic is a scheme for a specific maneuver.
• Characteristics of strategic decisions:
– Important.
– Involve a significant commitment of resources.
– Not easily reversible.
The Evolution of Strategic Management
DOMINANT
THEME
MAIN
ISSUES
KEY
CONCEPTS
&
TOOLS
MANAGEMENT
IMPLICATIONS
1950s
1960s-early 70s
Mid-70s-mid-80s
Late 80s –1990s
Budgetary
planning &
control
Corporate
planning
Positioning
Competitive
advantage
Strategic
innovation
Financial
control
Planning
growth &diversification
Selecting
sectors/markets.
Positioning for
leadership
Focusing on
sources of
competitive
advantage
Reconciling
size with
flexibility &
agility
Capital
budgeting.
Financial
planning
Forecasting.
Corporate
planning.
Synergy
Industry analysis
Segmentation
Experience curve
Portfolio analysis
Resources &
Cooperative
capabilities.
strategy.
Shareholder
Complexity.
value.
Owning
E-commerce.
standards.
— Knowledge Management—
Coordination
& control by
Budgeting
systems
Corporate
planning depts.
created. Rise of
corporate
planning
Diversification.
Restructuring.
Global strategies. Reengineering.
Matrix structures Refocusing.
Outsourcing.
2000s
Alliances &
networks
Self -organiz
ation & virtual
organization
The Basic Framework
Strategy: the Link between the
Firm and its Environment
THE FIRM
• Goals &
Values
• Resources &
Capabilities
• Structure &
Systems
THE
INDUSTRY
ENVIRONMENT
STRATEGY
STRATEGY
• Competitors
• Customers
• Suppliers
Sources of Superior Profitability
INDUSTRY
ATTRACTIVENESS
RATE OF PROFIT
ABOVE THE
COMPETITIVE
LEVEL
How do we
make
money?
Which
businesses
should we be
in?
CORPORATE
STRATEGY
COMPETITIVE
ADVANTAGE
How should
we compete?
BUSINESS
STRATEGY
Strategy Making : Design or Process?
Strategy as Design
Strategy as Process
Planning and
rational choice
Many decision makers
responding to multitude of
external and internal forces
INTENDED
STRATEGY
EMERGENT
STRATEGY
REALIZED STRATEGY
Mintzberg’s Critique of Formal Strategic Planning:
•The fallacy of prediction – the future is unknown
•The fallacy of detachment -- impossible to divorce formulation from
implementation
•The fallacy of formalization --inhibits flexibility, spontaneity,
intuition and learning.
Strategy Making Processes within the
Company: Multiple Roles of Strategy
Strategy as Decision
Support
Improves the quality
of decision making
Strategy as Coordination
and Communication
Creates consistency
and unity
Strategy as Target
Improves performance by setting
high aspirations
The Role of Analysis
• Strategy analysis improves decision processes,
but doesn’t give answers.
• Strategy analysis assists us to identify and
understand the main issues.
• Strategy analysis helps us to manage complexity.
• Strategy analysis can enhance flexibility and
innovation by supporting learning.