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Strategy A View From The Top Book Review Group 4 Katy Neely Matt Tevis Andrew McDonald Shelly Brown Hunter Pond. Chapter 1. What is Strategy?. Strategy Defined. Strategy is about positioning an organization for competitive advantage . Competitive advantage Creating a Strategy

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StrategyA View From The TopBook ReviewGroup 4Katy NeelyMatt TevisAndrew McDonaldShelly BrownHunter Pond

chapter 1

Chapter 1

What is Strategy?

strategy defined
Strategy Defined
  • Strategy is about positioning an organization for competitive advantage.
    • Competitive advantage
  • Creating a Strategy
    • Long term vision
    • Flexible
    • adapt
strategic evolution
Strategic Evolution
  • Strategic Evolution
    • Industrial Economic Prospective
    • Resource based Prospective
    • Human and Intellectual Prospective
levels of strategy
Levels Of Strategy
  • Corporate- Concerned with the types of businesses a firm should compete in and how the overall portfolio should be managed
    • Business unit-Focused on deciding what product or service to offer, how to create it, and how to get it to the marketplace
    • Functional-Often used in a narrow division such as marketing, human resources, or technology
chapter 2

Chapter 2

Strategy and Performance

4 2 formula
4+2 Formula
  • Strategy
  • Execution
  • Culture
  • Structure
  • Talent
  • Innovation
  • Leadership
  • Mergers and Partnerships
a conceptual framework
A Conceptual Framework
  • 3 interrelated Components
    • Purpose
    • Strategy
    • Leadership
  • 5 Interacting components
    • Structure
    • Systems
    • Processes
    • People
    • culture
  • Performance/control
the balanced scorecard
The Balanced Scorecard
  • 4 basic questions:
    • How do customers see us?
    • At what must we excel?
    • Can we continue to improve and create value?
    • How do we look to our company’s shareholders?
the role of the board
The Role Of The Board
  • Define its role, agenda, and information needs.
  • Ensure that management not only performs, but performs with integrity.
  • Set expectations about the tone and the culture of the company.
  • Formulate corporate strategy with management
  • Ensure that the corporate culture, the agreed strategy, management incentive compensation, and the companies approach to audit and accounting, internal controls, and disclosure are consistent and aligned.
  • Help management understand the expectations of shareholders and regulators.
chapter 3

Chapter 3

Analyzing The External Strategic Environment

  • Globalization as a political, economic, social, and technological force, seems unstoppable. In this era the lines between countries has been broken and the flow of information is being shared at and incredibly fast pace.
  • 3 reasons for globalization:
    • Political
    • Economic
    • technological
12 global trends
12 Global trends
  • Population trends
  • Urbanization
  • Spread of infectious disease
  • Recourse management
  • Environmental degradation
  • Economic integration
  • Knowledge dissemination
  • Information technology
  • Biotechnology
  • Nanotechnology
  • Conflict
  • Governance
a new compact between business and society
A New Compact Between Business and Society?
  • Size means Scrutiny
  • Cutting cost raises compliance risk
  • Strategy must involve society
  • Reducing risks means building trust
  • Satisfying shareholders means satisfying stakeholders
  • Global growth requires global gains
  • Productivity requires sustainability
  • Differentiation relies on representation
  • Good governance needs good representation
chapter 4

Chapter 4

Analyzing An Industry

porter s five forces
Porter’s Five Forces
  • The threat of entry
    • Six major barriers to market entry
  • Powerful suppliers and buyers
  • Substitute products and services
    • HBO and Pay-per-view
  • Rivalry among participants
    • Andrew Grove’s sixth force: complementary products
trajectories of industry change
Trajectories of Industry Change
  • Industry structure, concentration, and product differentiation
    • Vertical vs. horizontal
    • “rule of three and four”
  • Product life cycle
  • New patterns
    • Three phase model
strategic segmentation targeting and positioning
Strategic Segmentation, Targeting, and Positioning
  • Competitor analysis
    • Analyzing immediate competitors
    • Leader
    • Challengers
    • Followers
    • nichers
  • Strategic groups
product and market combination analysis
Product and Market combination Analysis

Present Products

Future Products

Present Markets


Product Development

Future Markets


Market Development

gap analysis
Gap analysis
  • Gap analysis
  • Profit pool analysis
    • Four steps
chapter 5

Chapter 5

Analyzing An Organizations Strategic Resource Base

strategic resources
Strategic Resources
  • Physical
  • Financial
  • Human Resource
  • Organizational Assets
forces for change
Forces For Change
  • Internal Forces
  • Company Life Cycle Forces
  • Strategic Forces
chapter 6

Chapter 6

Formulating Business Unit Strategy

formulating a competitive strategy
Formulating a Competitive Strategy
  • Analyzing the competitive environment
      • With whom will we compete?
      • What relative strengths do we have as a basis for creating a sustainable competitive advantage?
  • Anticipating key competitors’ actions
      • Understanding how competitors will react to our competitive strategy
  • Generating strategic options
      • Balancing opportunities and constraints to create options
  • Choosing among the alternatives
      • Analysis of the long-term impact of different strategy options
the value chain
The Value Chain

Firm Infrastructure

Firm Infrastructure


Support Activities

Human Resource Management

Technology Development


Inbound Logistics


Outbound Logistics

Marketing and Sales



Primary Activities

Primary Activities

generic strategy choices
Generic Strategy Choices

Strategic Advantage

Uniqueness perceived

by the customer

Low-cost position


Cost Leadership



Strategic Target


segment only


chapter 7

Chapter 7

Business Unit Strategy: Contexts and Special Dimensions

strategy in various i ndustries emerging growth mature d eclining
Strategy in Various Industries (Emerging, Growth, Mature, Declining)
  • Speed
    • pace of progress that a company displays in responding to current or anticipated business needs
    • Newest and lease understood of the critical success factors
    • Speed merchants
      • Build their strategies on the rapid pace of their operations
      • AAA, Dell, Dominoes
value and innovation
Value and Innovation
  • Value creation greatly depends on innovation
  • Companies recognize that they need to generate more value from core businesses and leverage their core
  • Sustaining innovation and disruptive innovation
creating culture of innovation
Creating Culture of Innovation
  • There are five common characteristics to creating a culture of innovation:
    • First, a business needs a top level commitment to innovation
    • Second, they need a long term focus
    • Third, a business needs a flexible organization structure
    • Fourth, a business needs a combination of loose and tight planning and control
    • Last, they need to create an environment for innovation and appropriate incentives
innovation performance profitability
Innovation, Performance, Profitability
  • Evidence on the relationship between research and development (R&D), innovation, and financial performance is inconsistent.
  • Studies have shown that the single biggest growth inhibitor for large companies was “mismanagement of the innovation process.”
  • Half of all companies do not closely track the efficiency of their innovation process
chapter 8

Chapter 8

Global Strategy Formulation

porters national diamond
Porters National Diamond
  • Factor conditions
    • Natural vs. created
  • Home country demand
  • Related and supporting industries
  • Competitiveness in the home industry
    • Porters 5 forces
  • Chance
    • Outside the control of the firm
  • Public policy
    • Deregulation
    • Local, regional, national
industry globalization drivers
Industry Globalization Drivers
  • Market drivers
  • Cost drivers
  • Competitive drivers
  • Government drivers
the global branding strategy
The global Branding Strategy
  • Global mix
  • Global offer
  • Global message
  • Global change
global strategy and risk
Global Strategy and Risk
  • Types of risk:
    • Political
    • Legal
    • Financial/economic risk
    • Societal/ cultural risk
chapter 9

Chapter 9

Corporate Strategy: Shaping the Portfolio

economies of scale and scope
Economies of Scale and Scope
  • Economics of learning
  • 3 Decision opportunity classes:
    • Horizontal scope
    • Geographical scope
    • Vertical scope
  • What is “Core”?
growth strategies
Growth Strategies
  • To formulate a successful growth strategy, a company must:
    • Carefully analyze its strengths and weaknesses.
    • Deliver value to it’s customers.
    • Ask what growth strategies its culture can effectively support.
  • 3 avenues to grow revenue base
    • Organic or internal growth
    • Growth through acquisition
    • Growth through alliance-based initiatives.
vertical and horizontal integration
Vertical and Horizontal Integration
  • Vertical integration
  • Backward integration
  • Forward Integration
  • Horizontal Integration
diversification strategies
Diversification Strategies
  • Diversification is defined as a strategy of entering product markets different from those in which a company is currently engaged
  • 4 different forms of relatedness:
    • Tangible links between business units
    • Intangible resources
    • Gain or exercise market power
    • Strategic relatedness
the strategic logic of alliances
The Strategic Logic of Alliances
  • 4 different alliance models based on the role the alliance plays in the participates’ corporate strategy and structure of the leadership of joint venture:
    • Franchise model
    • Portfolio model
    • Cooperative model
    • Constellation model
the strategic logic of alliances continued
The Strategic Logic of Alliances continued…


Cooperative alliances

M&A – like alliances

Partnership Type

New business alliances

Expertise alliances




Alliance Scope

  • 4 groups alliances are divided into on the basic of whether participants are competitors and on the relative depth/breadth of the alliance:
    • Expertise alliances
    • New – business alliances
    • Cooperative alliances
    • M&A – like alliances
chapter 10

Chapter 10

Corporate Strategy: Managing the Portfolio

using a portfolio approach for managing alliances
Using a Portfolio Approach For Managing Alliances
  • Business Alliances
  • Strategic Alliances
  • Relationship Alliances
  • Corporate Alliances
five attributes that d istinguish the planning p rocess
Five Attributes That Distinguish the Planning Process
  • A well understood conceptual framework that sorts out the many inter related types of strategic issues.
  • Strategic-thinking capabilities that are widespread throughout the company, not limited to the top echelons.
  • A process for negotiating tradeoffs among competing objectives that involves the series of feedback loops rather than a sequence of planning submissions.
  • A performance review system that focuses attention on top mangers.
  • A motivational system and management values that reward and promote the exercise of strategic thinking.
creating a learning organization
Creating a Learning Organization
  • Encouraging more systems thinking
  • Fostering a shared vision
  • Challenging existing mental models
  • Enhancing team learning
  • Motivating employees to improve their personal mastery of their job.