Chapter One. What is Strategy?. Cornelis A. de Kluyver and John A. Pearce II Third Edition. It is a pattern in a stream of actions. What is Strategy?. Positioning an organization for competitive advantage Deciding what to do and what NOT to do Which industries to participate in
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What is Strategy?
Cornelis A. de Kluyver
John A. Pearce II
It is a pattern in a stream of actions.
Positioning an organization for competitive advantage
Deciding what to do and what NOT to do
Which industries to participate in
What products and services to offer
How to allocate resources, add value
Creating value for shareholders and other stakeholders by providing value to customers
Differs from Tactics:
Forces trade-offs and should focus on differentiation from rivals
Focuses on value creation
Allows for learning and adaptation
Takes a long-term perspective
Responds to the needs of all stakeholders
Whowill you target as customers and who will you not?
What will you offer these customers and what will you not offer them?
How will you do all this? – What activities will you perform; which will you not?
Dell’s manufacture-to-order system forced competitors to make trade-offs(Key to Differentiation)
Southwest Airlines has created fit(Key to competitive advantage through Operational excellence)
Southwest Airlines’ Activity System
Limited passenger service
Limited use of
point to point
fleet of 737
Frequent reliable departures
and gate crews
Very low ticket prices
High aircraft utilization
Simply put, it's the idea that today's companies are embedded in multiple, complex relationships that make them interdependent on each other for success.
But it's only recently that corporate leaders are realizing that an ecosystem is more than a concept.
The ecosystem has intense implications for how companies plan for the future, and they ignore those implications at their own risk.
“A Computer on Every Desktop”
“Be #1 or #2 in every business…”
Matching Competitive Advantages of Rivals is No Longer Enough…
Write the rules; Don’t copy someone else’s
Basic Competitive Requirements
Latent Core Competencies
Future Core Competencies
Documents the purpose of the organization’s existence, may guide conduct
Represents organization’s strategic intent
Sets stretch targets
Creates a vision for the organization
Is primarily top-down (CEO/Senior management driven)
Requires creativity, analysis and synthesis
Is both top down and bottom-up
Plays supporting role focused on analysis, communication
How do we get there?
Where should we go?
Where are we now?
Strategy is not about creating a detailed, long-term plan
Strategy should focus on a long-term strategic intent and flexible means for realizing that intent
Learningand continuous renewalare essential parts of strategy