FOUNDATIONS OF STRATEGY:
CHAPTER 1
Group 1
Allyson Hatz
Alexa McDaniel
Molly Moseley
Bonnie Lee
Rafael Garcia
Strategy

Strategy: The means by which individuals or
organizations achieve their objectives or goals
 Corporate
strategy
 Defines
the scope of the firm in terms of the industries and
markets in which it competes
 Business
strategy
 Concerned
with how the firm competes within a particular
industry or market
Role of Strategy in Success

Goals that are simple, consistent, and long term
 Single-minded


commitment to clear goal
Profound understanding of competitive environment
Objective appraisal of resources
 Exploit
internal strengths and protect areas of
weakness

Effective implementation
 Emergence
of organizations and responding to changes
in the environment
Strategy Design

Intended strategy
 Conceived
by top management
 Negotiation, bargaining, and compromise

Realized strategy
 Actual
strategy implemented
 Only 10-30% of intended strategy is realized

Emergent strategy
 Interpret
the intended strategy and adapt to changing
external circumstances
Roles of Strategy


Decision support
Coordinating device
 Communication

Target
 Motivation

and inspiration
Animation and orientation
 Map:
Focus and direction
Profit and Purpose


Desire to create vs. desire to be rich
US, Canada, and Australia
 Shareholder

Europe
 Employee,

interest
state, and the enterprise as a whole interests
Corporate Social Responsibility
 Firm
as property
 Firm as social entity
Lady Gaga
•
•
•
•
•
New York University’s Tisch School of
the Arts drop out
At age 19, landed recording contract
and was dropped after 3 months
Accused of being “imitative” with her
look
Formed a band and was finally
recognized
Released debut album, The Fame, in
2008
James Dyson
•
Initially studied architecture at the Royal College of Art in London
•
Took 5 years to develop his cyclone bagless vacuum
•
Couldn’t find a company in the UK to distribute his product-too risky
•
Supported by his wife’s income who was an art teacher
•
Entered into partnership with Japanese company and product was launched
Alex Ferguson




Manchester United Football
Club Manager
Relentless pursuit of excellence
Rebuilt scouting and youth
development-went global to
find talent
Would sell some of his most
outstanding players (Beckham,
Ronaldo) if he believed that
their celebrity created
impediment to team unity
Routes to Success:
Effectively Implemented Strategy
•
Lady Gaga- Understanding of the role that live performances
and social media play in developing a fan base
•
James Dyson- When he was shot down in the UK, went to
Japan
•
Alex Ferguson- Combined old-fashioned virtues with critical
insight to success in soccer in the modern era.
Goals that are
Simple, Consistent, Long-term
•
Lady Gaga- Didn’t go to New York School of Arts that
was offered to her to pursue her quest for fame
•
James Dyson- Persisted for over 5 years to make his
vacuum
•
Alex Ferguson- Keeps his main focus on his team
Understanding of the
Competitive Environment
•
Lady Gaga- Created a ‘brand’ for herself, focused on live
shows, merchandising, and social media
•
James Dyson- Realized significance of TV advertising to sell
his product, moved his manufacturing base from the UK to
Malaysia to cut costs
•
Alex Ferguson- Recognized need to look worldwide for
talent
Objective Appraisal of Resources
•
Lady Gaga- Compensated in any weakness of performing
abilities by developing her image and relying on a large team of
designers for her live performances
•
James Dyson- Patented his product so when Hoover copied his
design, he took them to court and won significant damages.
•
Alex Ferguson- Masterful in including the psychological factors
that are critical to success
Effective Implementation
•
•
•
Effective leadership in terms of capacity to reach
decisions
Loyalty and commitment among subordinates
Quick responses to change in the competitive
environment
IKEA

Ingvar Kamprad
Established IKEA in 1943
 Entrepreneur
 Cost cutting solution to compete
 330 stores in 40 countries


The IKEA vision is to create a better everyday life for
the many people.
Wide range of well-designed and functional home
furnishing
 Low prices

IKEA Strategy

Competitive advantage:
 Price
tags
 Low
cost manufacturing process at large volumes
 Assembled furnishings at home

Minimizes transportation costs
 Recycling
 Product
“
left over materials
Range
The many people”
 Small space storage innovations
 Focus on what’s important
 Hard wearing and easy to live with products
Emergent Strategy

“Offer even lower prices to customers, while
positioning itself for long term growth”
 Separating
good costs from bad
 Lowering operational costs
 Increase volume
 Better functioning supply chain
 Empowering co-workers
Apple

Price your products to customer segments
 iPhone
3gs $99

Keep your eye to the future

Listen to your customers
Under Armour



Enter the soccer world
Tottenham Hotspur, English Premier League
Start player?
Strategy for Management
Good relationships and communication at all
levels
 Effective leadership at all levels
 Resource based views of strategy
 Motivation and inspiration of all members
 Motivation factors other than profits

Strategy for Marketing
Product placement
 Social media
 Being better than competitors
 Use of questionnaires and interviews
 Competitive advantage

Strategy for Profit
Reduce costs to survive competition
 Use of economic forecasts
 Value: Monetary vs. Nonmonetary

 Customer

satisfaction
Goal is to maximize profits over the long run
Strategy at Every Level






Setting goals: simple, consistent, long term
Having the proper knowledge
Technology reshaping the way we do business
Corporate Social Responsibility and ethics
Competitive advantage
Creating goals:
Mission statements
 Statement of principles or values
 Vision statements
 Strategy statements



Success through coordinated efforts
External vs. Internal environments of a firm