The Concept of Strategy

A DEFINITION….

• … a plan that integrates an organization’s goals, policies and actions into a cohesive whole. A well formulated strategy helps to– marshal and allocate resources into a– unique and viable posture – based on internal relative competencies and

shortcomings; – anticipated changes in the environment; and a– contingent moves by competitors

Quinn, 1980

Vision MissionValues

Objectives

GOALS

RESOURCESEXTERNAL

ENVIRONMENT

FactorsCapabilities

IdeasInnovations

MarketIndustryP.E.S.T

Environmental

The Basic Dynamics of Strategy

PLANSDECISIONSACTIONS

McGee, Thomas, Wilson 2005

Vision/mission of the businessBusiness scope

Competitive ambition

Identity product markets

Internal assessment External assessment

Set of multi-year broad

action programs

Success factorsIndustry attractiveness

Industry opportunities and threats

Success factorsCompetitive position

Basic strengths and weaknesses

Formulation of the business strategy

Definition and evaluation of specific action programs

Resources allocated and definition of performance measurements for control

Budgeting

Base case • Scenarios •Contingencies

Strategic investmentsOperating budgets

The StrategyFormulation Process

Deliberate strategy

Unrealized strategy

Intended strategy Realized strategy

Emergent strategy

Intended and emergent strategies

Vision, Mission and Goals • Vision - an ideal state or situation that an

organization wants to attain

• Mission - organization’s reason for existing– What is the organization’s core ACTIVITY?– What service does the organization deliver?– Who are the end-users/BENEFICIARIES of the service?– How does the organization deliver such service?– In what way is the organization’s MANNER OF DELIVERING

ITS different from other organizations offering the same service?

• Goals – what is to be achieved and when

Resources

• Strategists can mobilize resources which, if unique enough, can bring huge rewards to the organization.

• The firm is a collection of competencies – Hard to imitate– Provides access to a wide variety of markets– Contributes to customer benefits of end-product