CHAPTER 1: INTRODUCING STRATEGY
Learning outcomes
• Summarise the strategy of an organisation in a ‘strategy statement’.
• Distinguish between corporate, business and functional strategies.
• Identify key issues for an organisation’s strategy according to the Exploring Strategy Framework.
• Understand different people’s roles in strategy work.
• Appreciate the importance of different organisational contexts, academic disciplines and theoretical lenses
to practical strategy analysis.
1. DEFINITIONS OF STRATEGY
 Strategic decisions 
 Three horizons for strategy
• Horizon 1: Current core activities –
extend and defend these activities. e.g.
Tesla “Roadster” electric car
• Horizon 2: Develop emerging activities
– to generate new sources of growth
and/or profit. e.g. battery business
• Horizon 3: Create viable strategic
options for the future – higher risk
activities that may take years to
generate growth/profits. e.g. solar
electric technology; space
transportation
 Can’t just focus on short term (Horizon 1);
need to always be working on long-term
(Horizon 2&3)
2. WHAT IS STRATEGY FOR?
To define and express the purpose of an organization to
stakeholders.
Stakeholders are those individuals or groups that depend on
an organization to fulfil their own goals and on whom, in turn,
the organization depends.
4 ways to define an organization’s purpose: Mission
Statement; Vision Statement; Statement of Corporate Values;
Statement of Objectives (exam)
 Mission statements: A mission statement aims to provide employees and stakeholders with clarity about
what the organisation is fundamentally there to do.
 ‘What business are we in?’ e.g. medicine
 ‘What would be lost if the organisation did not exist?’ e.g. people dying
 ‘How do we make a difference?’ e.g. save lives
e.g. Bristol Myers Pharmaceutical – “To discover, develop and deliver innovative medicines that help patients
prevail over serious disease”
• Vision statements: A vision statement is concerned with the future the organisation seeks to create.
 ‘What do we want to achieve?’
 ‘If we were here in twenty years what do we want to have created or achieved?’
e.g. Ford – “ownership of a car should be within reach of everyone
e.g. Spotify – “to be the operating system for music”
• Statement of corporate values: Statements of corporate values communicate the underlying and enduring
core ‘principles’ that guide an organisation’s strategy and define the way that the organisation should
operate.
Note: These values do NOT change with circumstances.
e.g. Apple core values - “simplicity”, “excellence”
• Statement of objectives: Objectives are statements of specific outcomes that are to be achieved.
 Often stated in financial terms (e.g. Profit).
 May also be market-based objectives (e.g. Market Share).
 May emphasise basis of competitive advantage.
 ‘Triple Bottom Line’ – economic, social and environmental objectives.
3. STRATEGY STATEMENTS
• Strategy Statements (summarize strategy) should have 3 main themes:
 Fundamental goals that the organisation seeks, which reflect the stated mission, vision and objectives.
 The scope or domain of the organisation’s activities. e.g. market/customers, geographic, internal
organization etc.
 The particular advantages or capabilities it has to deliver all of these.
e.g. IKEA – “to create a better everyday life for 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”
• Levels of strategy (e.g. Tesla)
Diversifying from the organization’s original activities
into other activities (Tesla selling batteries for home use)
M
Marketing and product improvement strategies
(Developing a lower cost, volume car for Tesla)
Tesla’s functional strategies are geared to
meeting its investment needs and raising finance
 Corporate-level strategy is concerned with the overall scope of an organisation and how value is added
to the constituent business units.
 Business-level strategy (competitive strategy) is concerned with the way a business seeks to compete
successfully in its particular market.
 Functional strategy is concerned with how different parts of the organisation deliver the strategy
effectively in terms of managing resources, processes and people.
Integration of strategy important – align all three levels (why strategy is complex and needs to be managed)
The Exploring Strategy framework
4. THE EXPLORING STRATEGY FRAMEWORK includes understanding the strategic position of an organisation;
assessing strategic choices for the future; and managing
strategy in action.
• Strategic position is concerned with the impact on
strategy of the macro-environment, the industry
environment, the organization’s strategic capability
(resources and competences), the organization’s
stakeholders and the organization’s culture.
• 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.
• Strategy in Action is about how strategies are formed
and how they are implemented; the emphasis is on the
practicalities of managing.
 The strategy checklist
5. WORKING WITH STRATEGY:
• All managers are concerned with strategy:
 Top managers frequently formulate and control strategy but may also involve others in the process.
 Middle and lower level managers have to meet strategic objectives and deal with constraints.
 All managers have to communicate strategy to their teams and can contribute to the formation of
strategy through ideas and feedback.
• Organisations may also use strategy specialists:
 Many large organisations have in-house strategic planning or analyst roles.
 Strategy consultants can be engaged from management consulting firms (e.g. Accenture, IBM
Consulting, PwC).
 There are a growing
number of specialist
strategy consulting firms
(e.g. McKinsey & Co.,
The Boston Consulting
Group).
 Strategy’s 3 branches
1. CONTEXT – internal and
external (relates to
strategic position)
2. CONTENT – strategic options (relates to strategic choices)
3. PROCESS – formation and implementation (relates to strategic action)
6. EXPLORING STRATEGY IN DIFFERENT CONTEXTS - The Exploring Strategy Framework can be applied in
many contexts.
• In each context the balance of strategic issues differs:
 Small businesses (e.g. strategic purpose, growth issues and retaining independence).
 Multinational corporations (e.g. geographical scope; cultural issues and structure/control issues).
 Public sector organisations (e.g. service/quality and managing change issues).
 Not-for-profit organisations (e.g. purpose and funding issues).
A lot is involved in strategy (complex) - involves a lot of analysis
***Summary***
Strategy is the long-term direction of an organisation.
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 strategic planners and
strategy consultants.
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.
Strategic issues can be viewed critically from a variety of perspectives, as exemplified by the four strategy
lenses of design, experience, variety and discourse.
See also slide set for Commentary to Part 1: The Strategy Lenses.