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
