1. PRESENTATION SLIDES To accompany: Contemporary Strategy Analysis: Concepts, Techniques, Applications (4 th edition, Blackwell, 2002) Robert M. Grant Assisted by Kate Grant

2. The Concept of Strategy 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 OUTLINE

3. Elements of Success MADONNAGIAP & NORTH ALEX FERGUSON VIETNAMESE MILITARY & MAN UNITED GOALSSingle-minded quest forReunification of Vietnam Success in soccer—an stardom. under Communist rule. escape route from poverty in Glasgow UNDERSTANDINGIdentified emerging trends Intimate knowledge of terrain. Clear recognition of THE in popular culture. Understanding U.S. political importance of discipline, ENVIRONMENTRecognized power of sex.system. training, motivation, & Understood showbiz competitive intelligence distribution channels. RESOURSERecognized limited raw Recognized economic and Combined internal devel- APPRAISALtalent. Relied on strengthsmilitary weaknesses and opment of skills with in self-promotion, image-political strengths. acquisition of key players. creation, relationship Nurturing of team management capabilities IMPLEMENT-Commitment to hard work.Tight control. Long-term Effectiveness in motivating ATIONDisciplined, inspirationalcommitment. Effective players, demonstrating Leadership. Attention to propaganda. Inspirational commitment. detail.leadership.

4. Successful Strategy Long-term, simple and agreed objectives Profound understanding of the competitive environment Objective appraisal of resources Common Elements in Successful Strategy EFFECTIVE IMPLEMENTATION

5. 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.

6. The Evolution of Strategic Management DOMINANT THEME MAIN ISSUES CONCEPTS & TECHNIQUES IMPLEMENT- ATION 1950s1960sEarly-mid Late1970sLate 1980s Late 1990s 1970s early 1980searly 1990s early 2000s BudgetaryCorporateCorporate Analysis ofQuest for Strategic planning &planningstrategy industry &competitive innovation control competitionadvantage The “New Economy” Financial controlPlanning growthDiversifica- PositioningCompetitive Innovation & ionadvantage knowledge BudgetingForecasting &Portfolio Analysis ofResource Dynamic project appraisalinvestmentplanning. industry &analysis. sources of planningSynergy competitionCase advantage market competences Knowledge share management cooperation Emphasis onRise ofDiversifi- Industry/market Restructuring Virtual orga- financialcorporate planningcation. selectivity. BPR. nization. managementdepartmentsQuest for Active asset Refocusing Alliances & formalglobal management Outsourcing Quest for planningmarket share critical mass

7. The Turbulent 90s The Death of Communism The Death of Communism The End of Apartheid The End of Apartheid The Turmoil in Russia The Turmoil in Russia The Horror of Yugoslavia The Horror of Yugoslavia Stock Market Goes Bananas DJIA 1/1/90: 2,765 31/12/99: 11,425 Stock Market Goes Bananas DJIA 1/1/90: 2,765 31/12/99: 11,425 Volatile Oil 9/1990: $34 12/1998: $10 12/1999: $30 Volatile Oil 9/1990: $34 12/1998: $10 12/1999: $30 Bloodbath in Rwanda Financial Crisis in Asia Sclerosis in Japan Unstable Currencies Yen/$ from 87 to 148 (1997-98) Unstable Currencies Yen/$ from 87 to 148 (1997-98) Advent of the Internet International competition intensifies

8. The Basic Framework Strategy: the Link between the Firm and its Environment THE FIRM Goals & Values Resources & Capabilities Structure & Systems THE INDUSTRY ENVIRONMENT Competitors Customers Suppliers STRATEGY

9. Sources of Superior Profitability RATE OF PROFIT ABOVE THE COMPETITIVE LEVEL How do we make money? INDUSTRY ATTRACTIVENESS Which businesses should we be in? COMPETITIVE ADVANTAGE How should we compete? CORPORATE STRATEGY BUSINESS STRATEGY

10. Strategy Making : Design or Process? Strategy as Design Planning and rational choice INTENDED STRATEGY Many decision makers responding to multitude of external and internal forces REALIZED STRATEGY EMERGENT STRATEGY Strategy as Process 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. 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.

11. Strategy Making Processes within the Company: Multiple Roles of Strategy Strategy as Decision Support Strategy as Coordination and Communication Strategy as Target Improves the quality of decision making Creates consistency and unity Improves perform- ance by setting high aspirations

12. 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.