Framework for Selecting Strategy & Design

Question 1

What is a strategy?

Answer 1

It is a plan for interacting with organizational environment to achieve organizational goals

Question 2

What are the levels of strategy?

Answer 2

Corporate level strategy

Business level strategy

Operational level strategy

Question 3

Explain Porter’s Competitive Strategies with an example?

Answer 3

Porter’s generic strategies, as explained in Gareth Jones’s “Organizational Theory, Design and Change” (2004), are foundational competitive strategies that firms use to achieve above-average industry performance by securing a sustainable competitive advantage.

Cost Leadership
A firm aims to become the lowest-cost producer in its industry by exploiting economies of scale, efficient operations, and cost-saving technologies. This allows the firm to offer products at industry-average prices or lower, attracting a broad customer base and achieving above-average profitability.

Differentiation
The firm seeks to offer unique products or services that are valued by customers, such as superior quality, innovation, brand image, or customer service. This uniqueness enables the firm to charge premium prices and build customer loyalty.

Cost Focus
This strategy targets a narrow market segment or niche, where the firm seeks to achieve cost advantage specifically within that segment. It exploits cost differences in serving the target segment better than competitors who serve broader markets.

Differentiation Focus
The firm targets a specific market segment and seeks to differentiate its products or services to meet the unique needs of that segment. This allows charging premium prices within the niche by catering closely to customer preferences.

Question 4

Explain Miles and Snow’s Strategy Typology?

Answer 4

Miles and Snow’s Strategy Typology categorizes organizational strategies based on how firms adapt to their environments, focusing on three core problems: entrepreneurial (market definition), engineering (process efficiency), and administrative (structural alignment). This framework identifies four strategic types:

1. Prospectors

Aggressively pursue innovation and new markets, prioritizing first-mover advantages and rapid adaptation.

High risk tolerance, with decentralized structures and significant R&D investment.

2. Defenders

Focus on stability, optimizing existing markets through cost efficiency and incremental improvements.

Centralized decision-making and rigid processes to protect market share.

3. Analyzers

Hybrid approach: maintain core operations while cautiously adopting proven innovations from competitors.

Balance efficiency with flexibility, often using matrix structures.

4. Reactors

Lack coherent strategy, reacting inconsistently to external pressures.

Often suffer from misalignment between strategy, structure, and environment

Question 5

Explain the Values Disciplines Model?

Answer 5

The model suggest three ‘Value Disciplines‘ to choose from which should act as a
central piece that shapes every subsequent plan and decision a company makes.
These three value disciplines are: Operational Excellence, Product
Leadership and Customer Intimacy.

Question 6

Explain the Blue Ocean Strategy?

Answer 6

It is about creating and capturing uncontested market space thereby making the competition irrelevant

It is based on the view that market boundaries and industry structure are not a given and can be reconstructed by the actions and beliefs of industry players

Question 7

Explain Red Ocean Strategy

Answer 7

Competes in existing market space

Exploits existing demand