Chapter 1 - Introduction

Question 1

Strategy

Answer 1

determination of long term goals and objectives, adoption of courses of action and allocations of carrying them out.

how to achieve purpose, goals, objectives missions.

show what a company can do and their boundaries.

work to coordinate all pieces of an organisation to achieve goals.

Question 2

Origins of Strategy

Answer 2

Concept originated in the military, always attributed to famous generals/wars

Question 3

Strategy Consists Of?

Answer 3

strategic management: what a firm is doing to achieve mission and vision

strategic formulation: what the firm should do

strategic implementation: putting the desired strategy into action.

Question 4

Strategy provides answers to?

Answer 4

Where to compete - which market are we in?

What unique value do we bring - why our customers choose us?

What resources/capabilities do we utilise?

How do we sustain unique value - factors that allow continual winning?

Question 5

Why is strategy important?

Answer 5

A means by which organisations seek to compete helps to win business war, positioning and differentiating from competitors.

A way organisations seek to manage their environments by adapting their behaviour.

Non-business organisations increasingly adopt strategic planning to perform better.

Question 6

Traditional Concepts in Strategy

Answer 6

Mintzberg's 5P's of strategy
Product Life Cycle
Experience Curve
Growth Share (G-S) Matrix
Disruptive innovation
Blue Ocean Strategy

Question 7

Mintzberg’s 5Ps of Strategy

Answer 7

Defines strategy and how we think of strategy. Not for coming up with strategy but more of a way to analyse. Involves business model - a central element of a firm’s strategic plan that describes process through which a firm hopes to earn profits. consists of plan, ploy, pattern, position and perspective.

Question 8

Plan

Answer 8

A carefully crafted set of steps that a firm intends to follow to be successful

Question 9

Ploy

Answer 9

Specific move designed to outwit/trick competitor e.g. Boeing tricked Airbus by announcing new plane.

Question 10

Pattern

Answer 10

degree of consistency in a firm’s strategic actions e.g. Apple

Question 11

Position

Answer 11

A firm’s place in the industry relative to its competitors e.g. Old Navy/Gap

Question 12

Perspective

Answer 12

How executives interpret competitive landscape, think of long-term goals. Trying to anticipate and forecast developments. e.g. Amazon

Question 13

Product Life Cycle

Answer 13

Introducing new products takes time to develop, needs R&D, marketing and high resources. Once more customers buy products, revenue and competition increases, making it more difficult to sell and reducing profit, alternative products developed leading to mature phase.

Question 14

Emergent Phase

Answer 14

a lot of investment in marketing, R&D resulting in low revenue

Question 15

Growth Phase

Answer 15

Through development and advertising, sales and demand increases, revenue made and benefits from product

Question 16

Mature Phase

Answer 16

Competition increases, developed alternative products, revenue decreases again

Question 17

Experience Curve

Answer 17

By the Boston Consulting Group. Considered how much does it cost to produce vs. units produced over time. The more produced, the lower its costs.

Increasing products for companies who gain more market share and volume would show positive outcomes in experience curve.

But it is too simple as increasing production could lead to too much supply, lowering selling price.

Question 18

Growth Share (G-S) Matrix

Answer 18

By Boston Consulting Group.

Assessing a firm’s purpose for success within the industries in which it competes. The matrix categorises businesses as high low along two dimensions - firms market share in industry and growth rate of each industry.

Suggestions then offered about how to approach each industry.

Matrix too simple and doesn’t capture complexity of market

Question 19

Stars

Answer 19

Funded and encouraged to grow. High industry grow rate and relative market share.
e.g iPhone for Apple

Question 20

Cash Cows

Answer 20

Milked to supply funds to more promising businesses. High relative market share and low industry growth rate. e.g. Cars that are popularly bought

Question 21

Question Marks

Answer 21

Executives decide whether to foster/sell. High industry growth rate and low relative market share. e.g. electric vehicles

Question 22

Dogs

Answer 22

Sold if possible and abandoned if necessary. Low industry growth rate and relative market share e.g. Old car models

Question 23

Disruptive Innovation

Answer 23

Innovation the conflict with and threatens to replace, traditional approaches to competing within an industry, attracts new customers. e.g. Tablet computers, CDs, digital cameras.

Question 24

Blue Ocean Strategy

Answer 24

Creating new, untapped market rather than competing with rivals in an existing market. Focusing on value innovation. A way to make the competition irrelevant by creating a leap in value for both company and its customers.

Question 25

Red Ocean

Answer 25

When companies in strong competition and lose to competitors, the known, creating something slightly improved but compete with many others. Competition within existing market space, focus on existing customers and exploitation of existing demand.

Question 26

Leadership

Answer 26

Influence that individuals exert on others to achieve goals. It operates on all levels of an organisation. Not all leaders are managers and vice versa.

Question 27

Importance of leadership

Answer 27

Without it, organisations can’t function.

Strategy can’t be developed/ implemented.

Leadership is undertaken by different individuals in different ways, but is an essential part to organisations.

Question 28

Bringing Leadership and Strategy Together

Answer 28

Concepts often treated as synonymous in practice. Should be considered as two separate but related concepts.

No longer see defining role of CEO as master strategist.

Strategy field giving more attention to role of leadership in shaping organisational context and culture within which compelling visions and creative strategies will emerge.