Exploring Strategy

organisational field

a community of organisations that interact more frequently with one another than with those outside the field

market

a group of customers for specific products or services that are essentially the same (e.g. a particular geographical market)

market segment

a group of customers who have similar needs that are different from customer needs in other parts of the market

industry

a group of firms producing products and services that are essentially the same

hybrid strategy

a hybrid strategy combines different generic strategies

hypothesis testing

a methodology used particularly in strategy projects for setting priorities in investigating issues and options; widely used by strategy consulting firms and members of strategy project teams

international strategy

a range of options for operating outside an organisation's country of origin

emergent strategy

a strategy that develops as a result of a series of decisions, in a pattern that becomes clear over time, rather than as a deliberate result of a 'grand plan'

outsourcing

activities that were previously carried out internally are subcontracted to external suppliers

cultural systems

aim to standardise norms of behaviour within an organisation in line with particular objectives

mission statement

aims to provide the employees and stakeholders with clarity about what the organisation is fundamentally there to do

complementor(s)

an organisation is your complementor if it enhances your business attractiveness to customers or suppliers

learning organisation

an organisation that is capable of continual regeneration from the variety of knowledge, experience and skills within a culture that encourages questioning and challenge

dynamic capabilities

an organisation's ability to renew and re-create its strategic capabilities to meet the needs of changing environments

distinctive resources and capabilities

are required to achieve competitive advantage

objectives

are statements of specific outcomes that are to be achieved (often expressed in financial terms)

key drivers for change

are the environmental factors likely to have a high impact on industries and sectors, and the success or failure of strategies within them

rare resources and capabilities

are those resources and capabilities that are possessed uniquely by one organisation or by a few others

inimitable resources and capabilities

are those resources and capabilities that competitors find difficult and costly to imitate or obtain or substitute

macro-environment

broad environmental factors that impact to a greater or lesser extent many organisations, industries and sectors

PESTEL analysis

categorises environmental influences into six main types: political, economic, social, technological, environmental and legal

matrix structure

combines different structural dimensions simultaneously, for example product divisions and geographical territories or product divisions and functional specialisms

gap analysis

compares actual or projected performance with desired performance

disruptive innovation

creates substantial growth by offering a new performance trajectory that, even if initially inferior to the performance of existing technologies, has the potential to become markedly superior

business model

describes a value proposition for customers and other participants, an arrangement of activities that produces this value, and associated revenue and cost structures

functional structure

divides responsibilities according to the organisation's primary specialist roles such as production, research and sales

economies of scope

efficiency gains made through applying the organisation's existing resources or competences to new markets or services

CAGE framework

emphasises the importance of cultural, administrative, geographical and economic distance

game theory

encourages an organisation to consider competitors' likely moves and the implications of these moves for its own strategy

global integration

encourages organisations to coordinate their activities across diverse countries to gain efficient operations

acceptability

expected performance outcomes of a proposed strategy to meet the expectations of the stakeholders

performance targets

focus on the outputs of an organisation (or part of an organisation), such as product quality, revenues or profits

portfolio manager

he or she operates as an active investor in a way that shareholders in the stock market are either too dispersed or too inexpert to be able to do so

Porter's Five Forces Framework

helps identify the attractiveness of an industry in terms of five competitive forces: the threat of entry; the threat of substitutes; the power of buyers; the power of suppliers; and the extent of rivalry between competitors

competitive strategy

how a company, business unit or organisation achieves competitive advantage in its domain of activity

competitive advantage

how a company, business unit or organisation creates value for its users both greater than the costs of supplying them and superior to that of rivals

business-level strategy

how an individual business competes in its particular market(s)

functional strategies

how the components of an organisation deliver effectively the corporate- and business-level strategies in terms of resources, processes and people

collective strategy

how the whole network of alliances, of which an organisation is a member, competes against rival networks of alliances

local responsiveness

implies a greater need to disperse operations and adapt to local demand

Exploring Strategy Framework

includes understanding the strategic position of an organisation (context); assessing strategic choices for the future (content); and managing strategy in action (process)

diversification (related and unrelated/conglomerate)

increasing the range of products or markets served by an organisation

cost-leadership strategy

involves becoming the lowest-cost organisation in a domain of activity

global strategy

involves high coordination of extensive activities dispersed geographically in many countries around the world

deliberate strategy

involves intentional formulation or planning

open innovation

involves the deliberate import and export of knowledge by an organisation in order to accelerate and enhance its innovation

differentiation strategy

involves uniqueness along some dimension that is sufficiently valued by customers to allow a price premium

Ansoff's growth matrix

is a classic corporate strategy framework for generating four basic directions for organisational growth

entrepreneurship

is a process by which individuals, teams or organisations identify and exploit opportunities for new products or services that satisfy a need in a market

collaborative advantage

is about managing alliances better than competitors

acquisition

is achieved by purchasing a majority of shares in a target company

divisional structure

is built up of separate divisions on the basis of products, services or geographical areas

legitimacy

is concerned with meeting the expectations within an organisational field in terms of assumptions, behaviours and strategies

corporate-level strategy

is concerned with the overall scope of an organisation and how value is added to the constituent businesses of the organisation as a whole

corporate governance

is concerned with the structures and systems of control by which managers are held accountable to those who have a legitimate stake in an organisation

diffusion

is the process by which innovations spread amongst users

paradigm

is the set of assumptions held in common and taken for granted in an organisation

parenting advantage

is the value added to businesses by corporate-level activities

organic development

is where a strategy is pursued by building on and developing an organisation's own capabilities

opportunity recognition

means recognising an opportunity, circumstances under which products and services can satisfy a need in the market or environment

Blue Oceans

new market spaces where competition is minimised

planning systems

plan and control the allocation of resources and monitor their utilisation

entrepreneurial life cycle

progresses through start-up, growth, maturity and exit

forcefield analysis

provides an initial view of change problems that need to be tackled by identifying forces for and against change

business case

provides the data and argument in support of a particular strategy proposal, for example investment in new equipment

global sourcing

purchasing services and components from the most appropriate suppliers around the world, regardless of their location

corporate entrepreneurship

refers to radical change in an organisation's business, driven principally by the organisation's own capabilities

organisational fit

refers to the match between the management practices, cultural practices and staff of characteristics between the target and the acquiring firms

organisational identity

refers to what members believe and understand about who they specifically are as an organisation

parental developer

seeks to employ its own central capabilities to add value to its businesses

cultural web

shows the behavioural, physical and symbolic manifestations of a culture

governance chain

shows the roles and relationships of different groups involved in the governance of an organisation

political view of strategy development

strategies develop as the outcome of bargaining and negotiation among powerful interest groups (and stakeholders)

Porter's Diamond

suggests that locational advantages may stem from local factor conditions; local demand conditions; local related and supporting industries; and from local firm strategy structure and rivalry

forecasting

takes three fundamental approaches based on varying degrees of certainty: single-point, range and multiple-futures forecasting

focus strategy

targets a narrow segment or domain of activity and tailors its products or services to the needs of that specific segment to the exclusion of others

project-based structure

teams are created, undertake a specific project (e.g. internal or external contracts) and are then dissolved

organisational ambidexterity

the ability of an organisation simultaneously to exploit existing capabilities and to search for new capabilities

power

the ability of individuals or groups to persuade, induce or coerce others into following certain courses of action

organisational knowledge

the collective intelligence, specific to an organisation, accumulated through both formal systems and the shared experience of people in that organisation

merger

the combination of two previously separate organisations in order to form a new company

corporate social responsibility

the commitment by organisations to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large

innovation

the conversion of new knowledge into a new product, process or service and the putting of this new product, process or service into actual commercial use

logical incrementalism

the development of strategy by experimentation and learning

profit pools

the different levels of profit available at different parts of the value network

global-local dilemma

the extent to which products and services may be standardised across national boundaries or need to be adapted to meet the requirements of specific national markets

leadership

the process of influencing an organisation (or group within an organisation) in its efforts towards achieving an aim or goal

dominant logic

the set of corporate-level managerial competences applied across the portfolio of businesses

onfigurations

the set of organisational design elements that fit together in order to support the intended strategy

organisational culture

the taken-for-granted assumptions and behaviours of an organisation's members

capabilities

the ways in which an organisation may deploy its assets effectively

network effects

there are network effects in an industry when one customer of a product or service has a positive effect on the value of that product for other customers

market systems

these typically involve some formalised system of 'contracting' for resources or inputs from other parts of an organisation and for supplying outputs to other parts of an organisation

critical success factors

those factors that are either particularly valued by customers or which provide a significant advantage in terms of costs. (Sometimes called key success factors (KSF))

co-evolution

underlines the way in which partners, strategies and capabilities need to evolve in harmony in order to reflect constantly changing environments

BCG matrix

uses market share and market growth criteria to determine the attractiveness and balance of a business portfolio

divestiture

when a business no longer fits the corporate strategy it may be sold

first-mover advantage

where an organisation is better off than its competitors as a result of being first to market with a new product, process or service

path dependency

where early events and decisions establish 'policy paths' that have lasting effects on subsequent events and decisions

feasibility

whether a strategy can work in practice