Summary – BTR1 week 1-4
Includes all slides, notes during class, articles, videos & mandatory readings of Exploring Strategy 13th edition
Strategy
Understanding strategy
Strategy = the long-term direction of an organization, choosing a set of activities to deliver a unique mix of value, mix of analyses,
concepts, policies, arguments, and action that responds to a high-stakes challenge. It includes logical, incremental or emergent
patterns. It defines a clear motivating purpose for the organization.
Strategy statements have the fundamental goals (purpose, vision, mission, or objectives) that the organization seeks, the scope or
domain of the organization’s activities, and the advantages or capabilities it must deliver all of these. Help to persuade investors and
lenders of its viability, as well as inspire.
Levels of strategies
Corporate-level strategy: Which businesses should we be in? Overall scope of organization & how value is added to it.
Business-level strategy: Which competitive methods should we invest in to achieve a competitive advantage?
• How individual businesses
compete in their individual markets
‘Competitive strategy.’
• Typically concerns issues such as
innovation, appropriate scale,
and response to competitors’
moves
• Where the businesses are units
within a larger organization,
business-level strategies should
clearly fit within corporate-level
strategy
Functional-level strategy: Which functional
strategies, marketing/ financial/ operational, are needed to support our business strategy?
• How the components of an organization deliver corporate and business-level strategies, in terms of resources,
processes, and people
• In most businesses, success depends largely on decisions taken at the functional level, which in turn need to be
closely linked to business-level strategy
• Functional strategies determine how resources are allocated
Strategic direction, the long-term direction or trajectory, always needs close analysis.
- Organizational purpose: the reason why a company exists & to whom it makes a difference, understanding its concrete
action.
- Vision statement: the future the organization seeks to create. Expressing aspiration that will enthuse, gain commitment,
and stretch performance. Sitting here in 20 years, what do we want to achieve?
1
, - Mission statement: aims to provide clarity about what the organization is fundamentally there to do daily for employees
and stakeholders. What business are we in? What would not be here if the business wasn’t? Why do they do so?
- Objectives: statements or outcomes that are to be achieved. Expressed in financial terms, sales or profits or focus on
providing services to target groups (when non-profit).
- Scope refers to the customers/ clients, geographical location; and extent of internal activities (vertical integration). FE
academic departments, the activities internally and the people they externalize to, the place of operating.
The advantage is how the organization is different in the competitive environment.
Exploring the strategy frameworks
Three-horizons framework: make businesses think of different horizons defined by time; managing growth and innovation to
balance running today's businesses. Therefor they should build emerging opportunities to create future breakthroughs.
o Horizon 1: defend and extend the current business. (current core activities, businesses need defending and
extending but can become flat over time)
o Horizon 2 emerging opportunities, scale new growth areas(emerging activities that should provide new
sources of profit
o Horizon 3 future breakthroughs, long term, create new opportunities(generate profits a few years from now,
decade ahead, managers need to avoid focusing on short-term issues.
Exploring strategy framework analyzes the strategic position of an organization, and the future choices as well as strategy action
by the interconnection of strategic issues:
1. Strategic position concerns the factors that shape an organization’s current situation and strategic possibilities. Including the
external environment, which shapes the industry/ sector environment. Next to this is the internal environment (resources &
capabilities that support the market position). And lastly, the purpose and culture.
2. Strategic choices: decisions on direction and method. Diversify, enter international markets, and innovate within existing
markets. Examples are acquiring another business, forming alliances or developing internally.
Areas of choice are:
1. Business strategy; business model to use, basis of competitive advantage
2. Corporate strategy: which business to operate in, and manage
unit relationships
3. International strategy; countries to enter and compete across
borders
4. Entrepreneurship & innovation: Is the organization innovating
enough?
5. Mergers, acquisitions, and alliances: partnering, internal
development & purchasing
Internal development = Building &
recombining capabilities (encouraging innovation and
entrepreneurial skills). Leveraging capabilities (sharing best
practices across the organization). Stretching capabilities (using
existing strengths to create new products/services).
External development is adding capabilities through mergers,
acquisitions or alliances.
• Ceasing non-core activities (outsourcing or reducing costs).
• Monitoring output and benefits to enhance customer value.
• Awareness development (training, learning, and recognizing what supports strategy).
3. Strategy in action: evaluating/developing/ implementing.
Evaluating strategy by the SAF framework:
o Suitable – Does it fit opportunities and threats?
o Acceptable – Does it meet stakeholder expectations?
o Feasible – Can it be achieved with available resources and capabilities?
pg. 2
,Development of strategies: Planned strategy = Formal, structured processes. Emergent strategy = Develops through learning,
adaptation, and responses to event.
Implementing strategy : Requires hard elements (structure, systems, processes) & soft elements (culture, leadership, trust and
fairness). It requires strong leadership, appropriate change styles and careful management of resistance.
Three general techniques that underpin many strategy frameworks
1. Allocentricism: thinking broadly about others (putting others first). Consider customers, suppliers, competitors,
partners, and governments. (fe in swot you compare your position to the other). This prevents overconfident, fast thinking.
Encourages thinking beyond own organization. Focusses on how success depends on others in the ecosystem.
2. Issue trees: thinking deeply about breaking down complex problems. Breaks down a central problem into mutually
exclusive, collectively exhaustive (Mutually exclusive/ Collectively exhaustive) sub-issues. Ensures all relevant issues are
considered, analyzed separately
Structure of an issue tree
3. System mapping: shows the consequential links and interconnections between elements of a strategic problem. One
element relies on many others: apple on iCloud, apple store, mac, apple music).
Cross-cutting themes
The underlying forces that influence every stage of strategy — from analysis to decision-making to implementation — and therefore
must be considered holistically.
Sustainability: growing pressure from stakeholders requires organizations to be accountable for environmental and social impact.
Sustainable development means balancing three interacting goals: economic, environmental and social. It affects strategy at
every level: goals, industry analysis, risk, resources, stakeholders and organizational change. The benefits are:
- Lower resource and regulatory costs
- Stronger reputation
- Competitive differentiation
- Attracting talent
- New business opportunities
Digital transformation is widespread disruptive change driven by digital technologies. Affecting business models, industry
ecosystems, innovation, leadership and change, strategy tools and processes.
Strategy in different organizations
Non-profit organizations : operate for public or social benefit. They must generate enough income to sustain their mission. They
compete with for-profit organizations, if charging for services and other non-profits (for funding). Their characteristics are:
- Self-governing
- Non-profit distribution (reinvest surplus)
- Often involve voluntary participation
- Funded by governments, donors, sponsors, or service sales
Strategy helps non-profits: clarify purpose, mission and goals. Identify threats and opportunities, allocate resources and improve
governance and organizational design.
Start-ups and small businesses
- Highly vulnerable to environmental change
- Purpose may include independence or lifestyle, not just profit
pg. 3
, - Limited strategic options (e.g., acquisitions often unaffordable)
- Simpler strategy implementation
Multinational Corporations (MNCs)
- Must analyze multiple national environments
- Cultural differences affect markets and management
- International strategy dominates decisions
- Complex structure and change management channel
Family Businesses
- Strategic purpose may prioritize: Family control/ Succession/ Lifestyle
- Profit may not be the main objective
- Family concerns strongly influence major decisions
- Leadership and change can be sensitive issues
4 strategy lenses
- Strategy as design: strategy is rational and planned, logical, analytical and systematic.
- Strategy as experience: experience shapes the current strategy. Influenced by culture, routines and assumptions and
affected by biases.
- Strategy as variety: strategy develops through new ideas and creativity, innovation emerges unpredictability, bottom-up
ideas matter, and encourages experimentation.
- Strategy as discourse: strategy is shaped by how managers frame and discuss issues. Language and communication
matter, strategy is shaped by persuasion and power, and strategy talk influences outcomes.
Strategy is complex and cannot be fully understood from only one perspective, using multiple lenses provides deeper, more critical
insights.
Strategic decisions complex, high-impact choices that affect the future of a business and require trade-offs. Strategy
development and implementation: how strategies are formed and executed within organizations.
Strategic thinking requires deliberate; structures approach rather than intuitive quick decisions.
Thinking slow (system 2): deliberate, analytical and thorough. Needed for strategic decisions where stakes are high. Thinking fast
(system 1): intuitive, quick and automatic is useful for everyday decisions and helpful for survival. It needs time and effort: collect
data, use frameworks and challenge assumptions. Strategic outputs hide a lot of detailed work. Tools are strategy frameworks,
thinking perspectives differently, and using the four-strategy lens.
Left brain is rational, linear, analytical and breaks problems into parts. The right brain is intuitive, holistic and integrates information
into a bigger picture. Both are essential for analysis, judgement and synthesis.
Convergent thinking: left brain, is focused, precise and analytical used for numbers, targets and testing options. Divergent
thinking right brain is creative exploration, broad. Strategy balances both. The practical tools ‘checklists’ in the next chapter
support slow thinking.
Developing a strategic plan
A roadmap to seize opportunities and minimize threats. Implementation matters (like changing management, structure and
leadership). Typical components of a strategic plan:
1. Purpose, vision, mission, objectives define what the organization is trying to achieve; may iterate with other elements.
2. Environmental analysis: macro and micro trends; identify strategic implications.
3. Resource and capability analysis: strengths, weaknesses, competitive advantage.
4. Business model: value proposition, resources & capabilities, revenue & cost structures.
5. Strategic options: initiatives aligned with environment, resources, and objectives.
6. Proposed strategy: explains why chosen strategy is superior; feasible, acceptable, and aligned with purpose.
7. Additional resources: identify financial, human, or other resources required; include timetable.
8. Key changes: changes in structure, systems, culture; plan for managing them.
pg. 4
Includes all slides, notes during class, articles, videos & mandatory readings of Exploring Strategy 13th edition
Strategy
Understanding strategy
Strategy = the long-term direction of an organization, choosing a set of activities to deliver a unique mix of value, mix of analyses,
concepts, policies, arguments, and action that responds to a high-stakes challenge. It includes logical, incremental or emergent
patterns. It defines a clear motivating purpose for the organization.
Strategy statements have the fundamental goals (purpose, vision, mission, or objectives) that the organization seeks, the scope or
domain of the organization’s activities, and the advantages or capabilities it must deliver all of these. Help to persuade investors and
lenders of its viability, as well as inspire.
Levels of strategies
Corporate-level strategy: Which businesses should we be in? Overall scope of organization & how value is added to it.
Business-level strategy: Which competitive methods should we invest in to achieve a competitive advantage?
• How individual businesses
compete in their individual markets
‘Competitive strategy.’
• Typically concerns issues such as
innovation, appropriate scale,
and response to competitors’
moves
• Where the businesses are units
within a larger organization,
business-level strategies should
clearly fit within corporate-level
strategy
Functional-level strategy: Which functional
strategies, marketing/ financial/ operational, are needed to support our business strategy?
• How the components of an organization deliver corporate and business-level strategies, in terms of resources,
processes, and people
• In most businesses, success depends largely on decisions taken at the functional level, which in turn need to be
closely linked to business-level strategy
• Functional strategies determine how resources are allocated
Strategic direction, the long-term direction or trajectory, always needs close analysis.
- Organizational purpose: the reason why a company exists & to whom it makes a difference, understanding its concrete
action.
- Vision statement: the future the organization seeks to create. Expressing aspiration that will enthuse, gain commitment,
and stretch performance. Sitting here in 20 years, what do we want to achieve?
1
, - Mission statement: aims to provide clarity about what the organization is fundamentally there to do daily for employees
and stakeholders. What business are we in? What would not be here if the business wasn’t? Why do they do so?
- Objectives: statements or outcomes that are to be achieved. Expressed in financial terms, sales or profits or focus on
providing services to target groups (when non-profit).
- Scope refers to the customers/ clients, geographical location; and extent of internal activities (vertical integration). FE
academic departments, the activities internally and the people they externalize to, the place of operating.
The advantage is how the organization is different in the competitive environment.
Exploring the strategy frameworks
Three-horizons framework: make businesses think of different horizons defined by time; managing growth and innovation to
balance running today's businesses. Therefor they should build emerging opportunities to create future breakthroughs.
o Horizon 1: defend and extend the current business. (current core activities, businesses need defending and
extending but can become flat over time)
o Horizon 2 emerging opportunities, scale new growth areas(emerging activities that should provide new
sources of profit
o Horizon 3 future breakthroughs, long term, create new opportunities(generate profits a few years from now,
decade ahead, managers need to avoid focusing on short-term issues.
Exploring strategy framework analyzes the strategic position of an organization, and the future choices as well as strategy action
by the interconnection of strategic issues:
1. Strategic position concerns the factors that shape an organization’s current situation and strategic possibilities. Including the
external environment, which shapes the industry/ sector environment. Next to this is the internal environment (resources &
capabilities that support the market position). And lastly, the purpose and culture.
2. Strategic choices: decisions on direction and method. Diversify, enter international markets, and innovate within existing
markets. Examples are acquiring another business, forming alliances or developing internally.
Areas of choice are:
1. Business strategy; business model to use, basis of competitive advantage
2. Corporate strategy: which business to operate in, and manage
unit relationships
3. International strategy; countries to enter and compete across
borders
4. Entrepreneurship & innovation: Is the organization innovating
enough?
5. Mergers, acquisitions, and alliances: partnering, internal
development & purchasing
Internal development = Building &
recombining capabilities (encouraging innovation and
entrepreneurial skills). Leveraging capabilities (sharing best
practices across the organization). Stretching capabilities (using
existing strengths to create new products/services).
External development is adding capabilities through mergers,
acquisitions or alliances.
• Ceasing non-core activities (outsourcing or reducing costs).
• Monitoring output and benefits to enhance customer value.
• Awareness development (training, learning, and recognizing what supports strategy).
3. Strategy in action: evaluating/developing/ implementing.
Evaluating strategy by the SAF framework:
o Suitable – Does it fit opportunities and threats?
o Acceptable – Does it meet stakeholder expectations?
o Feasible – Can it be achieved with available resources and capabilities?
pg. 2
,Development of strategies: Planned strategy = Formal, structured processes. Emergent strategy = Develops through learning,
adaptation, and responses to event.
Implementing strategy : Requires hard elements (structure, systems, processes) & soft elements (culture, leadership, trust and
fairness). It requires strong leadership, appropriate change styles and careful management of resistance.
Three general techniques that underpin many strategy frameworks
1. Allocentricism: thinking broadly about others (putting others first). Consider customers, suppliers, competitors,
partners, and governments. (fe in swot you compare your position to the other). This prevents overconfident, fast thinking.
Encourages thinking beyond own organization. Focusses on how success depends on others in the ecosystem.
2. Issue trees: thinking deeply about breaking down complex problems. Breaks down a central problem into mutually
exclusive, collectively exhaustive (Mutually exclusive/ Collectively exhaustive) sub-issues. Ensures all relevant issues are
considered, analyzed separately
Structure of an issue tree
3. System mapping: shows the consequential links and interconnections between elements of a strategic problem. One
element relies on many others: apple on iCloud, apple store, mac, apple music).
Cross-cutting themes
The underlying forces that influence every stage of strategy — from analysis to decision-making to implementation — and therefore
must be considered holistically.
Sustainability: growing pressure from stakeholders requires organizations to be accountable for environmental and social impact.
Sustainable development means balancing three interacting goals: economic, environmental and social. It affects strategy at
every level: goals, industry analysis, risk, resources, stakeholders and organizational change. The benefits are:
- Lower resource and regulatory costs
- Stronger reputation
- Competitive differentiation
- Attracting talent
- New business opportunities
Digital transformation is widespread disruptive change driven by digital technologies. Affecting business models, industry
ecosystems, innovation, leadership and change, strategy tools and processes.
Strategy in different organizations
Non-profit organizations : operate for public or social benefit. They must generate enough income to sustain their mission. They
compete with for-profit organizations, if charging for services and other non-profits (for funding). Their characteristics are:
- Self-governing
- Non-profit distribution (reinvest surplus)
- Often involve voluntary participation
- Funded by governments, donors, sponsors, or service sales
Strategy helps non-profits: clarify purpose, mission and goals. Identify threats and opportunities, allocate resources and improve
governance and organizational design.
Start-ups and small businesses
- Highly vulnerable to environmental change
- Purpose may include independence or lifestyle, not just profit
pg. 3
, - Limited strategic options (e.g., acquisitions often unaffordable)
- Simpler strategy implementation
Multinational Corporations (MNCs)
- Must analyze multiple national environments
- Cultural differences affect markets and management
- International strategy dominates decisions
- Complex structure and change management channel
Family Businesses
- Strategic purpose may prioritize: Family control/ Succession/ Lifestyle
- Profit may not be the main objective
- Family concerns strongly influence major decisions
- Leadership and change can be sensitive issues
4 strategy lenses
- Strategy as design: strategy is rational and planned, logical, analytical and systematic.
- Strategy as experience: experience shapes the current strategy. Influenced by culture, routines and assumptions and
affected by biases.
- Strategy as variety: strategy develops through new ideas and creativity, innovation emerges unpredictability, bottom-up
ideas matter, and encourages experimentation.
- Strategy as discourse: strategy is shaped by how managers frame and discuss issues. Language and communication
matter, strategy is shaped by persuasion and power, and strategy talk influences outcomes.
Strategy is complex and cannot be fully understood from only one perspective, using multiple lenses provides deeper, more critical
insights.
Strategic decisions complex, high-impact choices that affect the future of a business and require trade-offs. Strategy
development and implementation: how strategies are formed and executed within organizations.
Strategic thinking requires deliberate; structures approach rather than intuitive quick decisions.
Thinking slow (system 2): deliberate, analytical and thorough. Needed for strategic decisions where stakes are high. Thinking fast
(system 1): intuitive, quick and automatic is useful for everyday decisions and helpful for survival. It needs time and effort: collect
data, use frameworks and challenge assumptions. Strategic outputs hide a lot of detailed work. Tools are strategy frameworks,
thinking perspectives differently, and using the four-strategy lens.
Left brain is rational, linear, analytical and breaks problems into parts. The right brain is intuitive, holistic and integrates information
into a bigger picture. Both are essential for analysis, judgement and synthesis.
Convergent thinking: left brain, is focused, precise and analytical used for numbers, targets and testing options. Divergent
thinking right brain is creative exploration, broad. Strategy balances both. The practical tools ‘checklists’ in the next chapter
support slow thinking.
Developing a strategic plan
A roadmap to seize opportunities and minimize threats. Implementation matters (like changing management, structure and
leadership). Typical components of a strategic plan:
1. Purpose, vision, mission, objectives define what the organization is trying to achieve; may iterate with other elements.
2. Environmental analysis: macro and micro trends; identify strategic implications.
3. Resource and capability analysis: strengths, weaknesses, competitive advantage.
4. Business model: value proposition, resources & capabilities, revenue & cost structures.
5. Strategic options: initiatives aligned with environment, resources, and objectives.
6. Proposed strategy: explains why chosen strategy is superior; feasible, acceptable, and aligned with purpose.
7. Additional resources: identify financial, human, or other resources required; include timetable.
8. Key changes: changes in structure, systems, culture; plan for managing them.
pg. 4
