Chapter 1 : The Concept of Strategy Prof. Luciano Thomé e Castro

© 2013 Robert M. Grant www.contemporarystrategyanalysis.com

The Concept of Strategy OUTLINE The role of strategy in success A framework for strategy analysis The evolution of strategic management What is strategy? Who do we describe it? How is strategy made? Strategy and not-for-profit organizations © 2013 Robert M. Grant www.contemporarystrategyanalysis.com

Ingredients of Success Queen Elizabeth & The House of Windsor Lady Gaga and the Haus of Gaga Goals Life-long dedication to role as head of state and reigning monarch Single-minded quest for stardom through her Lady Gaga persona Understanding the Environment Alertness to the changing political environment Sensitive to the mood and needs of the British people Awareness of the new economics of the music business, the marketing potential of social networking and needs of Generation Y Resource Appraisal Recognized lack of formal authority and need to exploit traditional loyalties and informal influence Exploited her innate theatricality, eccentricity, design capability and musical skills Implementation Resolute commitment; strong self discipline; emphasis on building an effective family team supported by loyal professionals Devotion to living the Lady Gaga character; wiliness to create new images on almost a daily basis © 2013 Robert M. Grant www.contemporarystrategyanalysis.com

What Makes a Successful Strategy? © 2013 Robert M. Grant www.contemporarystrategyanalysis.com

The Basic Strategy Framework Strategy as a Link Between the Firm and its Environment © 2013 Robert M. Grant www.contemporarystrategyanalysis.com

The Evolution of Strategic Management © 2013 Robert M. Grant www.contemporarystrategyanalysis.com

Ryanair’s Activity System © 2013 Robert M. Grant www.contemporarystrategyanalysis.com

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 manoeuvre Characteristics of strategic decisions Important Involve a significant commitment of resources Not easily reversible © 2013 Robert M. Grant www.contemporarystrategyanalysis.com

Definitions of Strategy Strategy: a plan, method or series of actions designed to achieve a specific goal or effect Wordsmythe Dictionary (http://www.wordsmyth.net) Strategy is the pattern of objectives, purposes or goals and the major policies and plans for achieving these goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be. Kenneth Andrews - The Concept of Strategy (Irwin, 1971) The determination of the long-run goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals. Alfred Chandler - Strategy and Structure (MIT Press, 1962) © 2013 Robert M. Grant www.contemporarystrategyanalysis.com

Sources of Superior Profitability © 2013 Robert M. Grant www.contemporarystrategyanalysis.com

Current Positioning; Future Direction Describing Strategy Current Positioning; Future Direction © 2013 Robert M. Grant www.contemporarystrategyanalysis.com

Strategy Making: Decision 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 © 2013 Robert M. Grant www.contemporarystrategyanalysis.com

Sources of Superior Profitability Strategy as Decision Support Improves the quality of decision making Strategy as Coordination & Communication Creates consistency and unity Improves performance by setting high aspirations Strategy as Target © 2013 Robert M. Grant www.contemporarystrategyanalysis.com

The Role of Analysis in Strategy Making 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 © 2013 Robert M. Grant www.contemporarystrategyanalysis.com

Applying Strategy Analysis to Not-For-Profits © 2013 Robert M. Grant www.contemporarystrategyanalysis.com