1. Foundations of Strategy: Chapter 1
Group 1
Allyson Hatz
Alexa McDaniel
Molly Moseley
Bonnie Lee
Rafael Garcia

2. 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

3. 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

4. Strategy Design Intended strategy Realized strategy Emergent 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

5. Roles of Strategy Decision support Coordinating device Target
Communication
Target
Motivation and inspiration
Animation and orientation
Map: Focus and direction

6. Profit and Purpose Desire to create vs. desire to be rich
US, Canada, and Australia
Shareholder interest
Europe
Employee, state, and the enterprise as a whole interests
Corporate Social Responsibility
Firm as property
Firm as social entity

7. 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

8. 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

9. 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

10. 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.

11. 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

12. 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

13. 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

14. Effective Implementation
Effective leadership in terms of capacity to reach decisions
Loyalty and commitment among subordinates
Quick responses to change in the competitive environment

15. 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

16. IKEA Strategy Competitive advantage: Price tags Product Range
Low cost manufacturing process at large volumes
Assembled furnishings at home
Minimizes transportation costs
Recycling left over materials
Product Range
“ The many people”
Small space storage innovations
Focus on what’s important
Hard wearing and easy to live with products

17. 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

18. Apple Price your products to customer segments
iPhone 3gs $99
Keep your eye to the future
Listen to your customers

19. Under Armour Enter the soccer world
Tottenham Hotspur, English Premier League
Start player?

20. 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

21. Strategy for Marketing
Product placement
Social media
Being better than competitors
Use of questionnaires and interviews
Competitive advantage

22. 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

23. 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