Evolution of strategy

• Greek word-Strategos: art of generalship

• Art of war by SunTzu
• HBS model elucidates "strategy" as a systematic
roadmap of purposes and policies defining the
company and its business.
• Bruce Henderson, founder of Boston Consulting
Group, wrote that Strategy was a deliberate search for
a plan of action to develop a business’s competitive
advantage and compound it (Henderson, 1989)
 Evolution of strategy
contd…
• Quinn,1980 and Davies,2000 paint strategy as
a design and plan of activities taken up by
company to achieve set target. It is a design or
plan to define policy of company and sets the
parameters within which it intends to achieve
its purpose. It is also the pattern that
integrates an organisation’s major goals,
policies, and action sequences into a cohesive
whole (Quinn, 1980).
 Scope of strategy
• product-market scope : Product and market
• growth vector: direction
• competitive advantage : How to better than
rival
• Synergy creation: common string
 Mintzberg’s view
1. Strategy as a Plan:- this is regarded as a consciously
intended course of action.
2. Strategy as a Ploy:- this is regarded as a specific
maneuver intended to outwit a competitor.
3. Strategy as a Pattern:- this is regarded as
consistency in behaviour whether intended or not.
4. Strategy as a Position:- this is regarded as a means
of locating an organisation in an environment.
5. Strategy as a Perspective:- this is regarded as an
ingrained way of perceiving the world.
 Deliberate versus Emergent Strategies

Int
Str end
ate ed
gy
Del
iber
ate
S t ra
tegy

Sustained
Realized Superior
Unrealized Strategy Performance
Strategy

Emergent Strategy

Adapted from: Mintzberg, H. “The Strategy Concept I: Five Ps for Strategy” California Management Review. Volume 30
Number1, Fall 1987.
 Strategy formulation as a left-brain,
right-brain, or group process

Is (or should) the process of strategy

formation (be) essentially analytical and
rational or intuitive and synthetic? Strategy
formulation seldom involves a single actor, to
what extent do group dynamics and politics
play a role in real-life strategy formulation?
 Andrews’ Strategy Framework
Environmental
Conditions Distinctive
and Trends Competence

Economic Capabilities:
Technical Financial
Physical Consideration of Managerial
Political all combinations Functional
Social Organizational
Reputation
Community History
Nation
World
Evaluation to determine
best match of Corporate
opportunity and resources Resources

As extending or
constraining
Opportunities Choice of Products opportunity
and Risks and Markets
Identification of
Economic Strategy strengths and
Identification
weaknesses
Inquiry
Assessment of Risk
Programs for
increasing
capability
Source: Kenneth R. Andrews, The Concept of Corporate Strategy, 1971

Rajesh Tripathi 7
McKinsey’s 7s Model
 Levels of strategy
• Corporate
• SBU
• Functional
Level of strategy contd.
Corpor
ate

SBU SBU SBU

Marketi Operati Person

Finance
ng ons nel
Issues in Strategic decision making
• Criteria
– Maximization
– Satisficing
– Incrementalism
• Rationality
• Creativity
• Variability
• Personal impact
• Individual versus group
 Schools of thoughts on strategy
• Design: process of conception
• Planning: intended plan divided into sub strategies
• Positioning: Analytical
• Entrepreneurial: Visionary
• Cognitive: mental
• Learning : Pattern learned through informal ways
• Power: Negotiation
• Cultural: Collective
• Environmental: Reactive
• Configuration : Transformative
 Pitfalls in Strategy
• Prior Hypothesis
• Representativeness
• Illusion of Control
• Escalating Commitment
 Techniques to improve strategy decision
making
• Devil’s Advocate
• Dialectic Inquiry
 Tactics
• Tactics is specific operating plan with narrow
scope and short horizon
– Time tactics
• First mover
– Standard ‘lock in’ customer
– Greater Market Share
– Greater Wealth generation
• Late mover
– Low cost
– Low risk
 Market leader tactics
• Expand total market- New uses,
users
• Defend market share-
• Expand market share
 Market Location Tactics
• Market Challenger/ Offensive
– Frontal Assault
• a pure frontal attack,
• a limited frontal attack,
• price based frontal attack,
• research and development
Flanking maneuver
– Geographical and
– Segmented flanking
» For eg. Cyrix math co-processor challenged Intel
 Offensive Tactics contd.
 Bypass- establish own domain and rules
 develop new products,
 diversify into unrelated products,
 Expand into new geographical markets for existing
products
– Encirclement
• product encirclement
• market encirclement

– Guerrilla Warfare
 Defensive Tactics
• Fortification : Raise structural Barrier
– Full Line of products/services
– Block distribution channel
– Raise buyer switching cost
– Increase scale economies
– Foreclose alternatives
– Exclusive rights with suppliers
• Counter attack : Increase expected retaliation
• Mobile Defense : Lower inducement for attack
• Position defense : stick to your guns
 Tactics
• Tactics is specific operating plan with narrow
scope and short horizon
– Time tactics
• First mover
– Standard ‘lock in’ customer
– Greater Market Share
– Greater Wealth generation
• Late mover
– Low cost
– Low risk
 Market leader tactics
• Expand total market- New uses,
users
• Defend market share-
• Expand market share
 Market Location Tactics
• Market Challenger/ Offensive
– Frontal Assault
• a pure frontal attack,
• a limited frontal attack,
• price based frontal attack,
• research and development
Flanking maneuver
– Geographical and
– Segmented flanking
» For eg. Cyrix math co-processor challenged Intel
 Offensive Tactics contd.
 Bypass- establish own domain and rules
 develop new products,
 diversify into unrelated products,
 Expand into new geographical markets for existing
products
– Encirclement
• product encirclement
• market encirclement

– Guerrilla Warfare
 Defensive Tactics
• Fortification : Raise structural Barrier
– Full Line of products/services
– Block distribution channel
– Raise buyer switching cost
– Increase scale economies
– Foreclose alternatives
– Exclusive rights with suppliers
• Counter attack : Increase expected retaliation
• Mobile Defense : Lower inducement for attack
• Position defense : stick to your guns
Thank You