Exploring Strategy Features Xxvi I - GBV

lllustrations and Thinking oring Strategy featuresxxvi iExploring Strategy onlinexxviii1INTRODUCING STRATEGY21.1 Introduction1.2 What is strategy?1.2.1 Defining strategy1.2.2 The purpose of strategy-, mission, vision, values andobjectives1.2.3 Strategy statements1.2.4 Levels of strategy1.3 The Exploring Strategy Framework1.3.1 Strategie position1.3.2 Strategie choices1.3.3 Strategy in action1.4 Working with strategy1.5 Studying strategy1.6 Exploring strategy further1.6.1 Exploring strategy in different contexts1.6.2 Exploring strategy through different 'strategy lenses'SummaryWork assignmentsRecommended key readingsReferencesGase example: The rise of a unicorn - Airbnb34478101112131416182020212222232324

CONTENTSPARTITHE STRATEGIC POSITIONIntroduction to Part I302MACRO-ENVIRONMENT ANALYSIS322.1 Introduction2.2 PESTEL analysis2.2.1 Politics2.2.2 Economics2.2.3 Social2.2.4 Technology2.2.5 Ecological2.2.6 Legal2.2.7 Key drivers for change2.3 Forecasting2.3.1 Forecast approaches2.3.2 Directions of change2.4 Scenario analysisSummaryWork assignmentsRecommended key readingsReferencesGase example: Alibaba - the Yangtze River TRY AND SECTOR ANALYSIS623.1 Introduction3.2 The competitive forces3.2.1 Competitive rivalry3.2.2 The threat of entry3.2.3 The threat of Substitutes3.2.4 The power of buyers3.2.5 The power of suppliers3.2.6 Complementors and network effects3.2.7 Defining the industry3.2.8 Implications of the Competitive Five Forces3.3 Industry types and dynamics3.3.1 Industry types3.3.2 Industry structure dynamics3.4 Competitors and markets3.4.1 Strategie groups3.4.2 Market segments3.4.3 Critical success factors and 'Blue Oceans'3.5 Opportunities and threats6364656666686969717374767781818485873viii

CONTENTSSummaryWork assignmentsRecommended key readingsReferencesGase example: Global forces and the advertising industry88898990924965RESOURCES AND CAPABIUTIES4.1 Introduction4.2 Foundations of resources and capabilities4.2.1 Resources and capabilities4.2.2 Threshold and distinctive resources and capabilities4.3 Distinctive resources and capabilities as a basis ofcompetitive advantage4.3.1 V - value of resources and capabilities4.3.2 R-rarity4.3.3 I - inimitability4.3.4 0 - organisational support4.3.5 Organisational knowledge as a basis of competitive advantage4.4 Diagnosing resources and capabilities4.4.1 VRIO analysis4.4.2 The value chain and value system4.4.3 Activity systems4.4.4 Benchmarking4.4.5 SWOT4.5 Dynamic capabilitiesSummaryWork assignmentsRecommended key readingsReferencesGase example: Rocket Internet - will the copycat be 4115119124124125125128STAKEHOLDERS AND GOVERNANCE1325.1 Introduction5.2 Stakeholders5.2.1 Stakeholder groups5.2.2 Stakeholder mapping5.2.3 Owners5.3 Corporate governance5.3.1 The governance chain5.3.2 Different governance models5.3.3 How boards of directors influence strategy5.4 Social responsibility and ethics5.4.1 Corporate social responsibility5.4.2 The ethics of individuals and managers133134134136139141143144149150150153ix

CONTENTS6SummaryWork assignmentsRecommended key readingsReferencesOase example: Drinking Partners - India's United Breweries Holdings Ltd155156156157159HISTORY AND CULTURE1626.1 Introduction6.2 Why is history important?6.2.1 Path dependency6.2.2 History as a resource6.2.3 Historical analysis6.3 What is culture and why is it important?6.3.1 Geographically-based cultures6.3.2 Organisational fields6.3.3 Organisational culture6.3.4 Culture's influence on strategy6.3.5 Analysing culture: the cultural web6.3.6 Undertaking cultural analysis6.4 Strategie driftSummaryWork assignmentsRecommended key readingsReferencesGase example: Culture clashes at Barclays 85185187Commentary on Part I The strategy lenses190Gase example: Nokia's evolving strategy through the lenses202PART IISTRATEGIC CHOICESxIntroduction to Part II2067BUSINESS STRATEGY AND MODELS2087.1 Introduction7.2 Generic competitive strategies7.2.1 Cost-Ieadership strategy7.2.2 Differentiation strategy7.2.3 Focus strategy7.2.4 Hybrid strategy7.2.5 The Strategy Clock7.3 Interactive strategies7.3.1 Interactive price and quality strategies209210211215216218220221221

CONTENTS897.3.2 Cooperative strategy7.3.3 Game theory7.4 Business models7.4.1 Value creation, configuration and capture7.4.2 Business model patternsSummaryWork assignmentsRecommended key readingsReferencesGase example: The IKEA approach224226229229232234234235235237CORPORATE STRATEGY AND DIVERSIFICATION2428.1 Introduction8.2 Strategy directions8.2.1 Market penetration8.2.2 Product development8.2.3 Market development8.2.4 Conglomerate diversification8.3 Diversification drivers8.4 Diversification and Performance8.5 Vertical Integration8.5.1 Forward and backward Integration8.5.2 To integrate or to outsource?8.6 Value creation and the corporate parent8.6.1 Value-adding and value-destroying activities ofcorporate parents8.6.2 The portfolio manager8.6.3 The synergy manager8.6.4 The parental developer8.7 Portfolio matrices8.7.1 The BCG (or growth/share) matrix8.7.2 The directional policy (GE-McKinsey) matrix8.7.3 The parenting matrixSummaryWork assignmentsRecommended key readingsReferencesGase example: Virgin - is the brand more than Richard 259261261263264265268268269269271INTERNATIONAL STRATEGY2769.1 Introduction9.2 Internationalisation drivers9.3 Geographie sources of advantage9.3.1 Locational advantage: Porter's Diamond9.3.2 The international value system9.4 International strategies277278282282284286xi

9.5 Market selection and entry9.5.1 Country and market characteristics9.5.2 Competitive characteristics9.5.3 Entry modes strategies9.6 Subsidiary roles in an international portfolio9.7 Internationalisation and PerformanceSummaryWork assignmentsRecommended key readingsReferencesGase example: China goes to Hollywood - Wanda's moves intothe US movie industry10 ENTREPRENEURSHIP AND INNOVATION10.1 Introduction10.2 Entrepreneurship10.2.1 Opportunity recognition10.2.2 Steps in the entrepreneurial process10.2.3 Stages of entrepreneurial growth10.2.4 Social entrepreneurship10.3 Innovation dilemmas10.3.1 Technology push or market pull10.3.2 Product or process Innovation10.3.3 Open or closed Innovation10.4 Innovation diffusion10.4.1 The pace of diffusion10.4.2 The diffusion S-curve10.5 Innovators and Imitators10.5.1 First-mover advantages and disadvantages10.5.2 The incumbent's responseSummaryWork assignmentsRecommended key readingsReferencesGase example: Rovio Entertainment - going back to the entrepreneurial roots11 MERGERS, ACQUISITIONS AND ALUANCES11.1 Introduction11.2 Organic development11.3 Mergers and acquisitions11.3.1 Types of M&A11.3.2 Urning of M&A11.3.3 Motives for M&A11.3.4 M&A processes11.3.5 M&A strategy over time11.4 Strategie 32332335338339340341341342342345350351

CONTENTS11.4.1 Types of Strategie alliance11.4.2 Motives for alliances11.4.3 Strategie alliance processes11.5 Comparing acquisitions, alliances and organic development11.5.1 Buy, ally or DIY?11.5.2 Key success factorsSummaryWork assignmentsRecommended key readingsReferencesGase example: Future-proofing business? Sainsbury acquires ArgosCommentary on Part II Strategie choices353353355359359360362362363363365368PART IIISTRATEGY IN ACTI0NIntroduction to Part III37212 EVALUATING STRATEGIES37412.1 Introduction12.2 Organisational Performance12.2.1 Performance measures12.2.2 Performance comparisons12.2.3 Gap analysis12.2.4 Complexities of Performance analysis12.3 Suitability12.3.1 Ranking12.3.2 Screening through scenarios12.3.3 Screening for bases of competitive advantage12.3.4 Decision trees12.3.5 Life cycle analysis12.4 Acceptability12.4.1 Risk12.4.2 Return12.4.3 Reaction of stakeholders12.5 Feasibility12.5.1 Financial feasibility12.5.2 People and skills12.5.3 Integrating resources12.6 Evaluation criteria: four qualificationsSummaryWork assignmentsRecommended key readingsReferencesGase example: ITV- DIY, buy or 398399399400401401403403404404406xiii

CONTENTS13 STRATEGY DEVELOPMENT PROCESSES13.1 Introduction13.2 Deliberate strategy development13.2.1 The role of the Strategie leader13.2.2 Strategie planning systems13.2.3 Externa!ly imposed strategy13.3 Emergent strategy development13.3.1 Logical incrementalism13.3.2 Strategy as the outcome of political processes13.3.3 Strategy as the produet of struetures and systems13.4 Implications for managing strategy development13.4.1 Strategy development in different contexts13.4.2 Managing deliberate and emergent strategySummaryWork assignmentsRecommended key readingsReferencesGase example: Alphabet - who and what drives the strategy?14 ORGANISING AND STRATEGY14.1 Introduction14.2 Structural types14.2.1 The functional strueture14.2.2 The divisional strueture14.2.3 The matrix strueture14.2.4 Multinational/transnational struetures14.2.5 Project-based struetures14.2.6 Strategy and strueture fit14.3 Systems14.3.1 Planning systems14.3.2 Cultural systems14.3.3 Performance targeting systems14.3.4 Market systems14.4 Configurations and adaptability14.4.1 The McKinsey 7-Ss14.4.2 Agility and resilienceSummaryWork assignmentsRecommended key readingsReferencesGase example: One 445645845946046246246246346515 LEADERSHIP AND STRATEGIC CHANGE46815.1 Introduction15.2 Leadership and Strategie change469470

CONTENTS15.2.1 Strategie leadership roles15.2.2 Leadership styles15.3 Diagnosing the change context15.3.1 The change kaleidoscope15.3.2 Forcefield analysis15.4 Types of Strategie change15.4.1 Adaptation15.4.2 Reconstruction15.4.3 Revolution15.4.4 Evolution15.5 Levers for Strategie change15.5.1 A compelling case for change15.5.2 Challenging the taken for granted15.5.3 Changing operational processes and routines15.5.4 Symbolic management15.5.5 Power and political systems15.5.6 Urning15.5.7 Visible short-term wins15.6 Problems of formal change programmes15.6.1 Problems in the process15.6.2 What formal programmes forgetSummaryWork assignmentsRecommended key readingsReferencesCase example: Sergio Marchionne - motor of change16 THE PRACTICE OF STRATEGY16.1 Introduction16.2 The strategists16.2.1 Top managers and directors16.2.2 Strategie planners16.2.3 Middle managers16.2.4 Strategy Consultants16.2.5 Who to involve in strategy development?16.3 Strategising16.3.1 Strategy analysis16.3.2 Strategie issue-selling16.3.3 Strategie decision-making16.3.4 Communicating the strategy16.4 Strategy methodologies16.4.1 Strategy Workshops16.4.2 Strategy projects16.4.3 Hypothesis testing16.4.4 Business cases and Strategie plansSummaryWork V