The Wisdom of Ratbert

1
PRESENTATION SLIDES To accompany Contemporary
Strategy Analysis (6th edition, Blackwell
Publishing, 2008)
Robert M. Grant
Assisted by Kate Grant
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The Concept of Strategy
OUTLINE

• The role of strategy in success
• A framework for strategy analysis
• The evolution of strategic management
• Corporate strategy and business strategy
• Strategy making Design or process?
• The role of strategy

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Components of Success
MADONNA GIAP NORTH VIETNAMESE LANCE ARMSTRONG
GOALS Single-minded quest for stardom. Reunification of Vietnam under Communist rule. Winning the Tour de France
UNDER-STANDING THE ENVIRONMENT Identified emerging trends in popular culture. Understood key success factors in showbiz Intimate knowledge of terrain Understanding U.S. political system. Diagnosis of the physical, psychological and strategic determinants of individual and team performance
RESOURCE APPRAISAL Recognized limited raw talent. Exploited strengths in self-promotion, product development relationship management Recognized economic and military weaknesses and core political strengths Systematic development of individual stamina and team capabilities
IMPLEMENT- ATION Commitment and discipline. Charismatic leadership. Team building. Attention to detail. Tight control. Long-term commitment. Effective propaganda. Inspirational leadership. Clear delineation of individual roles. Alignment of incentives with team goals. Nurturing esprit de corp
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What Makes a Successful Strategy?
Successful Strategy
EFFECTIVE IMPLEMENTATION
Long-term, simple and agreed objectives
Profound understanding of the competitive
environment
Objective appraisal of resources
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What is Strategy?

• Distinguishing strategy from tactics
• Strategy is the overall plan for deploying
  resources to establish a favorable position.
• Tactic is a scheme for a specific maneuver.
• Characteristics of strategic decisions
• Important.
• Involve a significant commitment of resources.
• Not easily reversible.

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The Evolution of Strategic Management
1950s 1960s-early 70s Mid-70s-mid-80s Late
80s 1990s 2000s Budgetary Corporate Positio
ning Competitive Strategic planning
planning advantage innovation control
Financial Planning Selecting
Focusing on Reconciling control growth -
sectors/markets. sources of size
with diversification Positioning for
competitive flexibility leadership
advantage agility Capital Forecasting. Industry
analysis Resources Cooperative budgeting.
Corporate Segmentation capabilities.
strategy. Financial planning. Experience
curve Shareholder Complexity. planning
Synergy Portfolio analysis value. Owning
E-commerce. standards.
Knowledge Management Coordination Corporate Div
ersification. Restructuring. Alliances
control by planning depts. Global strategies.
Reengineering. networks Budgeting created. Rise
of Matrix structures Refocusing. Self
-organiz systems corporate Outsourcing.
ation virtual planning organization
DOMINANT THEME
MAIN ISSUES
KEY CONCEPTS TOOLS
MANAGE-MENT IMPLIC- ATIONS
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The Basic FrameworkStrategy the Link between
the Firm and its Environment
THE FIRM Goals Values Resources
Capabilities Structure Systems
THE INDUSTRY ENVIRONMENT
Competitors Customers Suppliers
STRATEGY
STRATEGY
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Sources of Superior Profitability
INDUSTRY ATTRACTIVENESS
Which businesses should we be in?
CORPORATE STRATEGY
RATE OF PROFIT ABOVE THE COMPETITIVE LEVEL
How do we make money?
COMPETITIVE ADVANTAGE
How should we compete?
BUSINESS STRATEGY
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Strategy Making Design or Process?
Strategy as Design
Strategy as Process
Planning and rational choice
Many decision makers responding to multitude
of external and internal forces
INTENDED STRATEGY
EMERGENT STRATEGY
REALIZED STRATEGY

• Mintzbergs Critique of Formal Strategic
  Planning
• The fallacy of prediction the future is
  unknown
• The fallacy of detachment -- impossible to
  divorce formulation from
• implementation
• The fallacy of formalization --inhibits
  flexibility, spontaneity,
• intuition and learning.

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Strategy Making Processes within the Company
Multiple Roles of Strategy
Strategy as Decision Support
Improves the quality of decision making
Strategy as Coordination and Communication
Creates consistency and unity
Improves perform- ance by
setting high aspirations
Strategy as Target
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The Role of Analysis

• Strategy analysis improves decision processes,
  but doesnt give answers.
• Strategy analysis assists us to identify and
  understand the main issues.
• Strategy analysis helps us to manage complexity.
• Strategy analysis can enhance flexibility and
  innovation by supporting learning.