1. Strategic Management © Robert Jones 2012
Based on Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education

2. Definition of Strategy
Strategy is the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education

3. Layers of the business environment
Very difficult to edit this picture. Idea would be to animate the slide (see slide show), first to show the basic ovals, then bring in the annotation. These lecture notes serve as revision sheets for students so it’s good to include some of the detail.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 2.1

4. The vocabulary of strategy
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 1.2

5. A model of the elements of strategic management
Analysis – external, internal
and stakeholders
(fairly straightforward)
Options
and selection of
option
(not so difficult)
Implementation
(now it gets tricky ! )
Based on Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 1.3

6. Strategy as a Subject of Study
Unique resources, core competences
Resource based theory (Hamel, Prahalad)
1980s
Innovation to deal with change
Firms as organisms
(Eisenhardt, Stacey)
1990s
Assessing competitive forces (5 forces) and positioning
Market positioning (Porter)
Complexity and uncertainty. Influence of experience, politics, culture, history
Adaptive processes
(Quinn)
Systematised and analytical approach
Corporate planning
60/70s
What would you do if you were CEO?
Harvard case study
1960s
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education

7. Mintzberg, H. Ten Strategy Schools (The Strategy Safari)
Bowman, C Generic Strategies – a Substitute for Thinking

8. There are many ways of looking at strategy:

9. The risk of strategic drift
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 1.4

10. Good strategy is in the overlap
Often, the environment E moves
and the organisation does not move
- this can be fatal (strategic drift)

11. Contemporary Strategy Themes (1)
Internationalisation
Size of market
Range of competitors
Relationships overseas
Institutional/cultural orientation to strategy and profit orientation
E-Commerce
Speed and direction of technology change
Expectations about how to do business
E-commerce capability
Service small markets
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education

12. Contemporary Strategy Themes (2)
Changing purposes
Change from pure profit driven
Corporate scandals
Corporate social responsibility
AND drive for shareholder value
Public sector more “business-like” – target setting and service orientation
Knowledge and Learning
Innovation
Generate and integrate knowledge/promote learning
New ways of doing business
People interactions
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education

13. The role of the paradigm in strategy formulation
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit I.i

14. Three strategy lenses Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit I.v

15. Macroenvironment – PESTEL (1)
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 2.2

16. Government policy
The 2012 Financial Statement
How will this influence business and strategy?

17. Wille Walsh, IAG plc (British Airways) and Mike O’Leary, Ryanair
respond to recent changes in APD Air Passenger Duty

18. Drivers of Globalisation
This is an excellent framework –
we will build on this in later lectures
Source: Based on G. Yip, Total Global Strategy ll, FT/Prentice Hall, 2003, chapter 2.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 2.3

19. Porter’s Diamond The Determinants of National Advantage
This is an excellent framework
when looking at
conditions for business
Source: M. Porter, Competitive Advantage of Nations, Macmillan, 1990.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 2.4

20. First test yourself –
you have seen this before
fill in the blanks

21. The Five Forces Framework
Source: Adapted from M.E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors © 1980, Free Press, 1980, p. 4. Copyright 1980,1988 by The Free Press, a division of Simon & Schuster Inc. Reproduced with permission.
Exhibit 2.5

22. The Life-Cycle Model Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 2.6

23. Strategic Capability- the terminology
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 3.2

24. The Value Chain Johnson, Scholes & Whittington (2005)
Source: M.E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance, Free Press, Used with permission of The Free Press, a division of Simon & Schuster, Inc. © 1985, 1988 by Michael E. Porter. All rights reserved.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 3.6

25. The Value Network Johnson, Scholes & Whittington (2005)
Source: M.E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance, Free Press, Used with permission of The Free Press, a division of Simon & Schuster Inc. © 1985, 1988 by Michael E. Porter. All rights reserved.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 3.7

26. See my lecture on Competences
based on application of the Value Chain
With examples of
Zara
Ryanair
Apple
Honda
Toyota

27. Knowledge Creation Processes
Source: I. Nonaka and H. Takeuchi, The Knowledge-Creating Company, Oxford University Press Inc., © Reprinted by permission of Oxford University Press.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 3.9

28. Expectations and Purposes - Outline
Corporate governance
Organisational stakeholders
Stakeholder mapping
Ethical issues
Culture
Cultural web
Communication of organisational purposes
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education

29. Expectations and Purposes
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 4.1

30. Stakeholder Mapping: the Power/Interest Matrix
Source: Adapted from A. Mendelow, Proceedings of the Second International Conference on Information Systems, Cambridge, MA, 1991.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 4.5

31. The Cultural Web Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 4.11

32. Strategic choices Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit III.1

33. The Strategy Clock Johnson, Scholes & Whittington (2005)
Note: The strategy clock is adapted from the work of Cliff Bowman (see D. Faulkner and C. Bowman, The Essence of Competitive Strategy, Prentice Hall, 1995.) However, Bowman uses the dimenstion ‘Perceived Use Value’.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 5.2a

34. The Strategy Clock Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 5.2b

35. Competitive Strategies in Hypercompetitive Conditions
Competitive advantage is temporary
Rapid imitation
Not sustainable
Competitive advantage relates to
Organisation’s ability to change
Speed
Flexibility
Innovation
Disruption of market
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education

36. Competition and Collaboration
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 5.5

37. Game Theory - Prisoner’s Dilemma
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 5.6

38. Corporate Level Issues
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 6.1

39. Related Diversification
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 6.3

40. Diversity and Performance
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 6.4

41. Reasons for International Diversity
Market-based
Exploit cultural/ geographic differences
Globalisation of markets & competition
Cash in on differences in culture
Following customers
Administrative differences
Bypass limitations in home market
Specific geographical/ economic differences
Utilise strategic capabilities
Economic benefits
Broaden market size
Economies of scale
Internationalise value-adding activities
Stabilisation of earnings across markets
Enhance knowledge
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education

42. The Growth Share (or BCG) Matrix
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 6.8

43. Public Sector Portfolio Matrix
Source: J.R. Montanari and J.S. Bracker, Strategic Management Journal, vol. 7, no. 3 (1986), reprinted by permission of John Wiley & Sons Ltd.
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 6.9

44. Indicators of SBU Strength and Market Attractiveness
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 6.10a

45. Market Attractiveness/SBU Strength Matrix
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 6.10b

46. Strategy Guidelines Based on Directional Policy Matrix
Johnson, Scholes & Whittington (2005)
Exploring Corporate Strategy, 7th Edition, Pearson Education
Exhibit 6.10c