1. What is Strategy?
BUSI 7130/7136
Dr. Shook

2. AGENDA Hierarchy of Strategy Two Foundational Schools of Thought
What is Strategy?
Crafting Strategy
Strategy Concept I: 5 P’s
Honda Cases

3. Hierarchy of Strategy Corporate Business Functional
In which businesses should we be?
How should we manage the array of businesses?
Business
How should we compete in a given business?
Functional
How best can each function support the business level strategy?

4. External Analysis Mission & Vision Strategy Control Internal Analysis
What is Strategy?
Simulated Company
External Analysis
Mission
& Vision
Business
International
Strategy
Control
Internal Analysis

5. Two Schools of Thought IO Model of Superior Profitability
Resource-Based Theory of the Firm

6. IO Model of Superior Profitability
Assumptions:
The external environment imposes constraints that determine the strategies that can result in superior profitability.
Competing firms control similar resources and pursue similar strategies
Resources utilized by firms are highly mobile - - thus homogeneous

7. IO Model of Superior Profitability
Prescriptions: Firms must look for attractive industries in which to compete
Emphasis: External environment, especially the Industry - analyze it!

8. Resource-Based Theory of the Firm
Assumptions:
Firms acquire different resources over time
Resources heterogeneity within a particular industry
Resources may not be highly mobile across firms
Difference in resources and how they are used form the basis of competitive advantage

9. Resource-Based Theory of the Firm
Prescriptions: Firms should look at their resources and then see how they can be used
What about the resource makes it a source of competitive advantage?
Valuable
Rare
Imperfectly imitable
Organized

10. Resource-Based Theory of the Firm
Emphasis: Organization, especially its resources

11. External Analysis
Opportunities
Threats
Internal Analysis
Strengths
Weaknesses

12. External Analysis
Opportunities
Threats
Strategic Mission
Internal Analysis
Strengths
Weaknesses

13. The Five P’s Plan: A consciously intended course of action
Ploy: A maneuver intended to outwit a competitor
Pattern: Consistency in a stream of actions
Position: Niche or product-market domain place in the industry
Perspective: An ingrained way of perceiving the world

14. Strategic Intentions Intended Strategy Deliberate Strategy Realized
Unrealized
Strategy
Emergent
Strategy