Departamento de Ingeniería Civil y Ambiental

Facultad de Ingeniería

ICYA 4329: Gestión Estratégica en la Industria de la

Construcción
Profesor
PhD. José Alberto Guevara

LIBRO GUÍA:
Johnson, G., Whittington, R., Scholes, K., Angwin, D. N., & Regnér, P. (2017). Exploring Strategy (No. 11th e). Pearson.
GESTIÓN ESTRATÉGICA EN LA INDUSTRIA DE LA CONSTRUCCIÓN 2
 Introducing Strategy
1.1 Introduction

1.2 What is strategy?

1.3 The exploring strategy framework

1.4 Working with strategy

1.5 Studying strategy

1.6 Exploring strategy further

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 1.1 INTRODUCTION
A broad approach to strategy: “Exploring”
❖Economics of strategy
❖People side of managing strategy in practice.
Before making choices you should explore several options.

Strategy matters to almost all organisations, and to everybody working

in them:
▪ Large private-sector multinationals
▪ Small entrepreneurial startups
▪ Public-sector organisations such as schools and hospitals
▪ Not-for-profits such as charities or sports clubs

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 1.1 INTRODUCTION
EXAMPLE:
A company is wondering whether if it should globalize.
So, how consultants might approach this problem?
▪Systematic strategic analysis of the company’s situation.
▪Gather and analyse appropriate data: how the company had been so
successful to date, the challenge posed by competitors and the broader
opportunities and threats from the wider environment.
▪Understand what resources, processes and people were supporting the
current strategy and also what might support international expansion.

FUTURE OF THE ORGANISATION: how should the company compete in the future with aggressive new
entrants? What growth options are there for the company? If going global is a good strategy, what would
be the optimal method to achieve this outcome and what might be the resourcing implications?

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 1.2 WHAT IS STRATEGY?
STRATEGY is the long-term direction of an organisation

Book retailing to internet services Cartoons to diversified entertainment

• The long-term direction of an organisation can include both deliberate, logical strategy and more
incremental, emergent patterns of strategy.

• Second, long-term direction can include both strategies that emphasise difference and competition, and
strategies that recognise the roles of cooperation and even imitation.

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 1.2 WHAT IS STRATEGY?
1.2.1 Defining Strategy

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 1.2 WHAT IS STRATEGY?
1.2.1 Defining Strategy

Tesla’s strategy was: to enter at the high end of the

market, where customers are prepared to pay a
premium, and then drive down market as fast as possible
to higher unit volume and lower prices with each
successive model. . . . all free cash flow is plowed back
into R&D to drive down the costs and bring the follow on
products to market as fast as possible. When someone
buys the Tesla Roadster sports car, they are actually
helping pay for development of the low cost family car.

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 1.2 WHAT IS STRATEGY?
1.2.1 Defining Strategy

The long term

Importance of a long-term
perspective on strategy is
emphasised by the ‘three
horizons’ framework:
“Organisations should think of
themselves as comprising
three types of business or
activity, defined by their
‘horizons’ in terms of years”

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 1.2 WHAT IS STRATEGY?
1.2.1 Defining Strategy
Strategic direction.
▪Over the years, strategies follow some kind of long-term direction or trajectory. Sometimes a strategic
direction only emerges as a coherent pattern over time.
▪Managers and entrepreneurs try to set the direction of their strategy according to long-term objectives.
▪The objectives behind strategic direction always need close scrutiny.

Organisation.
▪Organisations involve many relationships, both internally and externally.
▪It is always important to look inside organisations and to consider the people involved and their different
interests and views. Externally, organisations are surrounded by important relationships, for example with
suppliers, customers, alliance partners, regulators and investors.

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 1.2 WHAT IS STRATEGY?
1.2.2 The Purpose of strategy: mission, vision, values and objectives
Defining and expressing a clear and motivating purpose for the organisation.
Address two related questions: how does the organisation make a difference; and for whom does the
organisation make that difference?

Mission Vision Values Objectives

• Aims to provide • Concerned with the • Communicate the • Are statements of

employees and future the underlying and specific outcomes that
stakeholders with organisation seeks to eduring core are to be achieved.
clarity about what the create. “principles” that guide • Often expressed in
organisation is • What do we want to an organisation´s the precise financial
fundamentally there achieve? strategy and define terms. (level of sales.)
to do. the way it should
operate.

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 1.2 WHAT IS STRATEGY?
1.2.3 Strategy Statements
All entrepreneurs and managers should be able to summarise their organisation’s strategy with a
‘strategy statement’:
It should have three main themes: the fundamental goals (mission, vision or objectives) that the
organisation seeks; the scope or domain of the organisation’s activities; and the particular
advantages or capabilities it has to deliver all of these.

Scope/Domain Advantage

• Refers to three dimensions: customers, • Describes how the organisation will

geographical location, and extent of achieve the objectives it has set for
internal activities. itself in its chosen domain.
• Capabilities of the company are
superior to other rival.

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 EXERCISE

1. Construct short strategy statements

covering the goals, scope and
advantage of Samsung and the
Southampton University. How much
do the different private- and public-
sector contexts matter?

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 1.2 WHAT IS STRATEGY?
1.2.4 Levels of Strategy

Inside an organisation, strategies can exist at three main levels:

1) Corporate-level strategy is concerned with the overall scope of an organisation and how value is
added to the constituent businesses of the organisational whole.
2) Business-level strategy is about how the individual businesses should compete in their particular
markets (this is often called ‘competitive strategy ‘.
3) Functional strategies are concerned with how the components of an organisation deliver
effectively the corporate- and business-level strategies in terms of resources, processes and
people.
Integration in strategy

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1.3 The exploring strategy framework

The Exploring Strategy Framework includes

understanding the strategic position of an
organisation; assessing strategic choices for the
future; and managing strategy in action.
The order is not always the same, por instance;
choices often have to be made before the
position is fully understood.
Emphasise a potentially non-linear nature of
strategy.

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 1.3 The exploring strategy framework
1.3.1 Strategic Position

▪Macro-environment: Complex multi-level environments: political,

economic, social, technological, ecological and legal forces. Macro-
environment:

▪Industry Environment: competitors, suppliers and customers

present challenges to an organisation.
Industry
Culture:
Environment:
▪Strategic Capability: resources (e.g. machines and buildings) and Strategic
competences (e.g. technical and managerial skills).
Position
▪Stakeholders: There are many actors who hold a ‘stake’ in the future
of every organisation – not just owners, but employees, customers,
suppliers and more Stakeholders:
Strategic
Capability:

▪Culture: Organisation’s history

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 1.3 The exploring strategy framework
1.3.2 Strategic Choices
Involve the directions in which strategy might move and the
methods by which strategy might be pursued.
Business strategy

▪Business strategy and models: how the organisation seeks to

compete at the individual business level Acquisitions and Corporate
alliances strategy

▪Corporate strategy and diversification: products offered and Strategic

markets served.
▪International strategy: new geographical markets
Choices
▪Entrepreneurship and innovation: the creation of a new
enterprise, is an act of innovation too. Entrepreneurship
International
strategy

▪Mergers, acquisitions and alliances: whether to buy another

company, ally or to go it alone.

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 1.3 The exploring strategy framework
1.3.3 Strategy in Action
About how strategies are formed and how they are implemented.
Strategy
performance
and
evaluation
▪Strategy performance and evaluation: existing and forecast
performance is satisfactory and then choose between options that
might improve it.
▪Strategy development processes: question of whether to plan strategy
in detail or leave plenty of opportunities for emergence
Strategy
practice. Strategy Strategy
development
processes

▪Organising: Successful implementation. in

▪Leadership and strategic change: examines options for managing
change, and considers how to choose between them.
Action
▪Strategy practice: guidance on which people to include in the process; Leadership
and strategic Organising
what activities they should do; and which methodologies can help change
them do it.

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1.3 The exploring strategy framework

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 1.4 Working with strategy

❖Strategy is something that almost all levels of management have to engage in, not just top decision-
makers.
❖Managers have to communicate strategy to their teams
❖Middle and lower-level managers play a growing part in shaping strategy themselves, because they
are closer to the daily realities of the business.
❖Lower-level managers can be a crucial source of ideas and feedback for senior management teams.

Strategy, is not just about abstract organisations, it is about linking analysis with implementation on
the ground.

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1.4 Working with strategy

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 1.5 Studying Strategy
Three main branches of strategy research:

❖Strategy context refers to multiple layers of

environment, internal and external to
organisations
❖Strategy content concerns the content (or
nature) of different strategies and their probability
of success.
❖Strategy process, broadly conceived, examines
how strategies are formed and implemented.

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 1.6 Exploring Strategy Further
1.6.1 Exploring Strategy in different contexts
Differences according to organisational contexts:

• Attend closely to the environment

Small • Strategic purpose (family control, next generation)
businesses:

• Positioning in a complex global marketplace

• International strategy
Multinational
corporations: • Organisational structure and strategic change

• Positioning issues of competitive advantage (compete for funds from donors)

Public sector and • Strategic choice issues may be narrower
not-for-profits:

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 1.6 Exploring Strategy Further
1.6.2 Exploring Strategy through different “strategy lenses”
The strategy lenses are ways of looking at strategy issues differently in order to generate additional insights.

Strategy as design views strategy development as ‘designed’ in the abstract. It’s about being systematic, analytical
and logical.
Strategy as experience Taken-for-granted assumptions and ways of doing things, embedded in people’s personal
experience and in organisational culture, will drive strategy.
Strategy as variety: The variety lens sees strategy as emergent from within and around organisations as new ideas
bubble up through an unpredictable process in response to an uncertain and changing environment.
Strategy as discourse focuses attention on the ways managers use language to frame strategic problems, make
strategy proposals, debate issues and then finally communicate strategic decisions.

Encourage the exploration of different perspectives

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 SUMMARY
● Strategy is the long-term direction of an organisation.
● The work of strategy is to define and express the purpose of an organisation through its mission, vision, values and objectives.
● Ideally a strategy statement should include an organisation’s goals, scope of activities and the advantages or capabilities it brings to
these goals and activities.
● Corporate-level strategy is concerned with an organisation’s overall scope; business-level strategy is concerned with how to
compete; and functional strategy is concerned with how corporate- and business-level strategies are actually delivered.
● The Exploring Strategy Framework has three major elements: understanding the strategic position, making strategic choices for the
future and managing strategy in action.
● Strategy work is done by managers throughout an organisation, as well as specialist strategic planners and strategy consultants.
● Research on strategy context, content and process shows how the analytical perspectives of economics, finance, sociology and
psychology can all provide practical insights for approaching strategy issues.
● Although the fundamentals of strategy may be similar, strategy varies by organisational context, for example, small business,
multinational or public sector.
● Strategic issues can be viewed critically from a variety of perspectives, as exemplified by the four strategy lenses of design,
experience, variety and discourse.

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 The rise of a
unicorn – Airbnb
(Case example)

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 The rise of a
unicorn – Airbnb
(Case example)

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