Corporate Strategy Unit 1 Slides

Corporate Strategy
Unit 1:
Introduction to Strategy
Strategic Management Model
Strategic Intent
Levels of Strategy
What is Strategy?
•A comprehensive master plan stating how the corporation will achieve its mission
and objectives. It maximizes competitive advantage and minimizes competitive
disadvantage.
•An integrated and coordinated set of commitments and actions designed to
exploit core competencies and gain a competitive advantage.
•
•Management’s “game plan”/ “action plan” for running the business.
•Consists of competitive moves and business approaches used by managers to run
the company
Corporate Strategy/Strategic Management:
An Overview
Strategic Management:
A set of managerial decisions and actions that determines the
long-run performance of a corporation.
Includes:
• Internal and external environment scanning
• Strategy formulation
• Strategy implementation
• Evaluation and control
Benefits of Strategy
• Clearer sense of strategic • Improved organizational performance

vision for the firm • Achieves a match between the
• Sharper focus on what is organization’s environment and its
strategically important strategy, structure and processes
• Improved understanding of a • Important in unstable environments
rapidly changing environment
• Strategic thinking
• Organizational learning
Basic Model of Strategy
Basic Elements of Strategy
1. Environmental scanning
2. Strategy formulation
3. Strategy implementation
4. Evaluation and control
Environmental Scanning
is the monitoring, evaluating and
disseminating of information from the external and
internal environments to key people within the
organization
Prentice Hall, Inc. ©2012 1-8

Strategy Formulation, Implementation,
Evaluation and Control
Strategy Formulation: the development of long-range plans for the
effective management of environmental opportunities and threats in
light of organizational strengths and weaknesses (SWOT)
Strategy implementation: the process by which strategies and policies

are put into action through the development of:
Programs
Budgets
Procedures
Evaluation and control: the process in which corporate activities and

performance results are monitored so that actual performance can be
compared to desired performance
Strategy- Triggering Event
Triggering event: something that acts as a stimulus for

a change in strategy and can include:
• New CEO
• External intervention
• Threat of change of ownership
• Performance gap
• Strategic inflection point
What Makes a Strategic Decision?
Strategic decision making focuses on the long-run future of the organization
Characteristics of strategic decision making include:

• Rare
• Consequential
• Directive
Prentice Hall, Inc. ©2012 1-12

Strategic Management Process
Strategic Decision Making Process:
1. Evaluate current 5. Analyze strategic

performance results (SWOT) factors
2. Review corporate 6. Generate, evaluate and
governance select the best
alternative strategy
3. Scan and assess the
external environment 7. Implement selected
strategies
4. Scan and assess the
internal corporate 8. Evaluate implemented
environment strategies
STRATEGIC INTENT- VISION
“What do we want to become?”
A. DESCRIBES WHERE THE COMPANY IS GOING
B. GENERAL - CONCEPTUAL TERMS
C. PROVIDE EMOTIONAL DIRECTION
D. THE ESSENCE OF LEADERSHIP
E. MUST BE ARTICULATED FORCEFULLY
F. MUST BE INSPIRING, CLEAR, AND CHALLENGING

16
STRATEGIC INTENT- Mission
• Purpose or reason for the organization’s existence
• Promotes shared expectations among employees
• Communicates public image important to stakeholders
• Who we are, what we do, what we’d like to become
Mission Vs. Vision: Are they

• Same
• Different
• Overlapping
12
Goals / Objectives
• A goal is an open-ended statement of what one wants to accomplish with
no quantification of what is to be achieved and no time criteria for
completion.
• Objectives
• The end results of planned activity
• What is to be accomplished Corporate goals and objectives include:
• Time in which to accomplish it • Profitability (net profits)
• Quantified when possible • Growth (increase in total assets, etc.)
• Utilization of resources (ROE or ROI)
• Market leadership (market share)
13
Levels/Hierarchy of Strategy
Levels/Hierarchy of Strategy
Strategy Fit
• Horizontal
• Vertical
21
Intended and Emergent Strategies
Source: Reprinted from “Strategy Formation in an Adhocracy,”

by Henry Mintzberg and Alexandra McGugh, published in
1-22Administrative Science Quarterly, Vol. 30, No. 2, June 1985, by
permission of Administrative Science Quarterly.
Strategic Flexibility and Learning Organization
Strategic flexibility: the ability to shift from one dominant
strategy to another and requires:
Long-term commitment to the development and nurturing of critical resources
Learning organization: an organization skilled at creating, acquiring, and

transferring knowledge and at modifying its behavior to reflect new
knowledge and insights
Main activities of a learning organization include:

• Solving problems systematically
• Experimenting with new approaches
• Learning from past experience, history and experiences of others
• Transferring knowledge quickly and easily throughout the organization
The
TheBasic
Basic Framework
Framework
Strategy:
Strategy:the
theLink
Linkbetween
betweenthe
the
Firm
Firm and
and its
its Environment
Environment
THE
THEFIRM
FIRM THE
THE
••Goals INDUSTRY
INDUSTRY
Goals&&
Values
Values ENVIRONMENT
ENVIRONMENT
STRATEG
••Resources
Resources STRATEGY
STRATEGY
Y ••Competitors
Competitors
&&
••Customers
Customers
Capabilities
Capabilities
••Suppliers
Suppliers
••Structure
Structure&&
Systems
Systems
25
Summing Up the Concepts
• Strategy, Plan, Strategic plan, Tactic

• Strategic management Model/Process
• Strategic Intent: Vision, Mission, Goal/Objective
• levels/hierarchy of Strategy
• Strategy Fit: Horizontal and Vertical
• Intended and Emergent Strategies
• Realised Strategy
• Learning organisation
• Military Vs business Strategy
• Competitive Advantage

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Corporate Strategy

• Clearer sense of strategic • Improved organizational performance

Prentice Hall, Inc. ©2012 1-8

Strategy implementation: the process by which strategies and policies

Evaluation and control: the process in which corporate activities and

Triggering event: something that acts as a stimulus for

Strategic decision making focuses on the long-run future of the organization

Characteristics of strategic decision making include:

Prentice Hall, Inc. ©2012 1-12

1. Evaluate current 5. Analyze strategic

A. DESCRIBES WHERE THE COMPANY IS GOING

B. GENERAL - CONCEPTUAL TERMS

C. PROVIDE EMOTIONAL DIRECTION

D. THE ESSENCE OF LEADERSHIP

E. MUST BE ARTICULATED FORCEFULLY

F. MUST BE INSPIRING, CLEAR, AND CHALLENGING

Mission Vs. Vision: Are they

Source: Reprinted from “Strategy Formation in an Adhocracy,”

Learning organization: an organization skilled at creating, acquiring, and

Main activities of a learning organization include:

• Strategy, Plan, Strategic plan, Tactic

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