What is Strategy

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What is Strategy?

• BUSI 7130/7136
• Dr. Shook

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AGENDA

• Hierarchy of Strategy
• Two Foundational Schools of Thought
• What is Strategy?
• Crafting Strategy
• Strategy Concept I 5 Ps
• Honda Cases

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Strategic Analysis
What is Strategy?

• Simulated Company

External Analysis
Strategy

• Business
• Corporate
• International

Mission Vision
Internal Analysis
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Hierarchy of Strategy

• Corporate
• In which businesses should we be?
• How should we manage the array of businesses?
• Business
• How should we compete in a given business?
• Functional
• How best can each function support the business
  level strategy?

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Two Schools of Thought

• IO Model of Superior Profitability
• Resource-Based Theory of the Firm

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IO Model of Superior Profitability

• Assumptions
• The external environment imposes constraints that
  determine the strategies that can result in
  superior profitability.
• Competing firms control similar resources and
  pursue similar strategies
• Resources utilized by firms are highly mobile - -
  thus homogeneous

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IO Model of Superior Profitability

• Prescriptions Firms must look for attractive
  industries in which to compete
• Emphasis External environment, especially the
  Industry - analyze it!

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Resource-Based Theory of the Firm

• Assumptions
• Firms acquire different resources over time
• Resources heterogeneity within a particular
  industry
• Resources may not be highly mobile across firms
• Difference in resources and how they are used
  form the basis of competitive advantage

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Resource-Based Theory of the Firm

• Prescriptions Firms should look at their
  resources and then see how they can be used
• What about the resource makes it a source of
  competitive advantage?
• Valuable
• Rare
• Imperfectly imitable
• Organized

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Resource-Based Theory of the Firm

• Emphasis Organization, especially its resources

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• External Analysis
• Opportunities
• Threats

• Internal Analysis
• Strengths
• Weaknesses

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• External Analysis
• Opportunities
• Threats

Strategic Mission

• Internal Analysis
• Strengths
• Weaknesses

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The Five Ps

• Plan A consciously intended course of action
• Ploy A maneuver intended to outwit a competitor
• Pattern Consistency in a stream of actions
• Position Niche or product-market domain place
  in the industry
• Perspective An ingrained way of perceiving the
  world

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Strategic Intentions
Intended Strategy
Deliberate Strategy
Realized Strategy
Unrealized Strategy
Emergent Strategy