Strategic management process

• “Strategy matters to almost all organizations,

and to everyone working in them.”
Whittington et al. (2020)

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 What is strategy
– Defining strategy
– The purpose of strategy
– Strategy statements
– Levels of strategy

The exploring strategy framework

Bibliography

• Whittington et al (2020) Cap 1 – Introducing

strategy

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 What is strategy?

Definitions of strategy

Sources: A.D. Chandler, Strategy and Structure: Chapters in the History of American Enterprise, MIT Press, 1963, p. 13; M.E. Porter, ‘What is strategy?’,
Harvard Business Review, November–December 1996, p. 60; P.F. Drucker, ‘The theory of business’, Harvard Business Review, September–October
1994, pp. 95–106; H. Mintzberg, Tracking Strategies: Towards a General Theory, Oxford University Press, 2007, p. 3.

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 Strategy

Strategy is the direction and scope of an organization over the

long term, which achieves advantage in a changing enviroment
through its configuration of resources and competences with
the aim of fulfilling stakeholder expectations (Johnson et al ).

- 'Would you tell me, please, which way I

ought to go from here?’

- ‘That depends a good deal on where you

want to get to,' said the Cat.

- ‘I don't much care where’- said Alice.

- ‘Then it doesn't matter which way you go'

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 Three horizons for strategy

Source: Adapted from M. Baghai, S. Coley and D. White, The Alchemy of Growth, Texere Publishers, 2000. Figure 1.1, p. 5..

Three horizons for strategy

• Horizon 1:
Current core activities – extend and defend these
activities.
• Horizon 2:
Develop emerging activities – to generate new
sources of growth and/or profit.
• Horizon 3:
Create viable strategic options for the future –
higher risk activities that may take years to
generate growth/profits.

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 Existing Upcoming
business business Megatrends

Strategically plan Anticipate major shifts

Tactically
for value capture that will impact our
monitor and lives and impact
for the yrs to
optimize business
come

0-2 yrs 2-15 yrs 15- 50 yrs

Select

Anticipate

The purpose of strategy

• What is Strategy for?

• To define and express the purpose of an organization to
stakeholders.
• Four ways to define an organisation’s purpose:
– Mission Statement
– Vision Statement
– Statement of Corporate Values
– Objectives

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 Mission statement

A mission statement provides employees and

stakeholders with clarity about what the
organisation is fundamentally there to do.

• ‘What business are we in?’

• ‘What would be lost if the organisation did not
exist?’
• ‘How do we make a difference?’

Accelerating the World's Transition to

Sustainable Energy

https://www.tesla.com/about

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 Vision statement

A vision statement is concerned with the future

the organisation seeks to create.

• ‘What do we want to achieve?’

• ‘If we were here in twenty years what do we
want to have created or achieved?’

Statement of values

Statements of corporate values communicate

the underlying and enduring core ‘principles’ that
guide an organisation’s strategy and define the
way that the organisation should operate.
NB These values do NOT change with
circumstances.

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 Objectives

Objectives are statements of specific outcomes

that are to be achieved.
• Often stated in financial terms (e.g. Profit).
• May also be market-based objectives (e.g.
Market Share).
• May emphasise basis of competitive advantage.
• ‘Triple Bottom Line’ – economic, social and
environmental objectives.

Strategy statements

Strategy statements should have three main

themes:
• Fundamental goals that the organisation seeks,
which reflect the stated mission, vision and
objectives.
• The scope or domain of the organisation’s
activities.
• The particular advantages or capabilities it has
to deliver all of these.

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 Levels of strategy

• Corporate-level strategy is concerned with the

overall scope of an organisation and how value is
added to the constituent business units.
• Business-level strategy is concerned with the way
a business seeks to compete successfully in its
particular market.
• Operational strategy is concerned with how
different parts of the organisation deliver the
strategy in terms of managing resources,
processes and people.

Levels of strategy

Corporate- Diversifying from the

level organisation’s original activities
into other activities
strategy e.g. Tesla selling batteries for home use.

Marketing and product

Business-level improvement strategies
e.g. Developing a lower cost, volume car for
strategy Tesla.

Tesla’s functional strategies

are geared to meeting its
Functional strategies investment
needs and raising finance.

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 The exploring strategy framework

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.

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 Strategic position

The strategic position is concerned with the

impact on strategy of
– the macro-environment,
– the industry environment,
– the organisation’s strategic capability (resources
and competences), and
– the organisation’s stakeholders and culture.

Strategic position

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 Strategic position

Fundamental questions for Strategic position:

• What is the purpose of the organisation?
– What are the macro-environmental opportunities
and threats?
– How can the organisation manage industry forces?
– What resources and capabilities support
the strategy?
– How are stakeholders aligned to the organisational
purpose?
– How does history and culture fit the strategy?

Strategic choices

Strategic choices involve the options for

strategy in terms of both the directions in
which strategy might move and the methods
by which strategy might be pursued.

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 Strategic choices

Strategic choices

Fundamental questions for Strategic choice:

• How should individual business units compete?
• Which businesses to include in the portfolio?
• Where should the organisation compete
internationally?
• Is the organisation innovating appropriately?
• Should the organisation buy other companies,
form alliances or go it alone?

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 Strategy in action

Strategy in action is about how strategies are

formed and how they are implemented.

The emphasis is on the practicalities of

managing.

Strategy in action

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 Strategy in action

Fundamental questions for Strategy in action:

• How centralised or structured should an
organization be?
• What are the required organisational systems?
• How should the organisation manage necessary
changes and what sort of leadership is necessary?

Key elements in a strategic plan

Source: A practical introduction to strategic planning is V. Evans, FT Essential Guide to Developing a Business Strategy:
How to Use Strategic Planning to Start Up or Grow Your Business, FT Publishing International, 2013.

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 Group project – Structure of the report

• Executive summary
• The company – presentation /current strategy statement
• Macro-environment analysis
• Industry and sector analysis
• Resource and capability analysis
• Strategic options and proposed strategies

Additional bibliography (in pt):

Serra, F., Ferreira, M., Torres, M. e Torres, A. (2010) “Anexo 1 –
Roteiro prático para o planeamento estratégico”, Gestão
estratégica – Conceitos e prática, Lidel – edições técnicas, Lisboa
Carvalho, J. e Filipe, J. (2010), “Um roteiro para a Gestão
estratégica”, Manual de estratégia (3º ed), Sílabo, Lisboa

Summary

• Strategy is the long-term direction of an

organisation.
• A strategy statement should cover 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; functional
strategy is concerned with how corporate- and
business-level strategies are actually delivered.

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 Summary

• The Exploring Strategy Framework has three major

elements: understanding the strategic position,
making strategic choices for the future, and
managing strategy-in-action.
• Strategy develops through rational-analytic and
emergent processes.

Exam question (example)

What is strategy? What is the role of
strategy and what are the
challenges of strategic management
is a fast-changing world?

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Group activity
What are the:
– Mission Statement
– Vision Statement
– Statement of Corporate Values
– Objectives
of the company that will be the object of your project?

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