Week 1 - Lecture

(PART 1)

Strategy
– has certain elements attach to it; provides a roadmap; a guidebook or set of rules
– allows to interpret SWOT, determine where to invest
– gives an expression to innovate or acquire new skills and resources

Establishment of Mission – determine the scope of the business, ambitions, what market to operate in

Internal environment - strengths and weaknesses of an organization; SWOT analysis; starting point of strategic
analysis
– e.g. (you as an individual/ student) my skills and attributes; things that are available to you? >> friends,
networks, computers, assets; things that you can bring into the table

External environment – nothing you have control over; externalities that impacts the business
– e.g. government, competitors, global trade (access to steel, technologies, commodities)

Elements of external environment

*Using models to provide analysis and structures, mechanisms to determine the state of the company and provide
critical diagnosis to formulate plan or solution to improve

– PEST analysis
o Political – legislation, trade, regulation, investment, protector (e.g. emergency orders that takes
place impacts businesses)
o Economic – interest rates (up/ down), unemployment, business cycle, GDP & GNP (e.g.
pandemic impacts businesses)
o Social – lifestyle, values, environment, demographic changes, income distribution, cultural aspects
(e.g. beverage alcohol industry planning to take on business in a place along with religious
prohibitions >> must take into consideration)
o Technological – patents, research, government investment (e.g. Tesla)

*legalization of cannabis – PEST analysis? Can look at the law, cultural elements, illegal market moving to
legal market

*After looking at internal and external analysis > determine what the company stands for > mission statement
(philosophy or ethics of the business, strategy of the business)

Resources – an element of internal analysis, people, technology, natural resources (e.g. innovation > post it notes)
Role of manager – quickly understand the dynamics of the business and how change of external and internal
elements can negatively or positively impact the business > must react quickly
– determine what is critical in the business and find solution to the problems
– understand all aspects of the business functional areas
– understand competitive environment

Strategy – goals and actions

Strategy maps - discussion of strategy in a broad fashion; process itself creates buy-in
Overarching direction – all about values; what does the organization wants to be?

Strategic thinking:
– answers: how will we do that?
– Get everyone to pull in the same direction
– Discourages unproductive behaviour
– Must recognize its distinctiveness (Porter’s Five Forces)

 Porter’s Five Forces (coffee shop)

o New entrants
o Suppliers – do they have power over you? (high/ low)
o Buyers – do they have a lot of choice?
o Substitutes – other ways to have the product (e.g. tea, brewing coffee from home)

Strategic programming – who, what, and how much; day-to-day priorities, roles and responsibilities
Tactics and execution – how to get it done (objective of business: e.g. sell more coffee)
Performance measurement – perform well or not?; information and analysis is needed to determine the
performance (e.g. economic, market, social, political, technological)

*People need to understand the changes and how can the business adapt to that (e.g. hot summer is better to sell
more cold beers which results to decision of producing more)
Feedback and incentive – balanced scorecard; bonuses, how to measure the incentives attached to performance?

 Performance Measurements - interconnected

1. Financial performance – profit, ROE, ROI, EPS
2. Operational performance – internal factors, market share, sales growth
3. Organizational effectiveness – performance that are benchmarked against the strategic goals of the
firm, job satisfaction, how strong is the brand?

(PART 2) Organization and Strategy

*Strategies are best seen in the actions of the managers (must be put into practice)
Translation into action:
a. Strategy content – “what” of a strategy (e.g. products, services, scope of business)
b. Strategy context – “where” of the strategy; internal and external context (e.g. government influence)
c. Strategy process – “how” of the strategy; who executes? (‘e.g. frontline managers, shipping

Policies – talks about allow businesses manage something; rollout, communication

Animation – making sure that various parts of organization is mobilized; every team member is acting in
accordance with the company’s strategic ambitions
Orientation – communication; rollout of the plan

Two Types of Strategy

1. Deliberate strategy -
2. Emergent strategy – bricks and mortar to online as result of Covid; realized in streams of decisions

Types of Organization
1. Fragmented company – fighting each other
2. Self-sufficient company
3. Mercenary company – weak loyalty; ship of pirates; leadership not that good present in threatening
4. Organic company- managers are thinking ahead and external context