Strategic Management Summary
Maureen Koek
Chapter 1: The Concept of Strategy
The four common elements in successful strategies:
1. Goals that are consistent and long-term
2. Profound understanding of the competitive environment
a. Understanding the external environment
3. Objective appraisal of resources
4. Effective implementation
Fig. 1.1
The Basic Framework for Strategy Analysis
A two-way classification of internal and external forces is superior to the four way
SWOT-framework
Because: classifying external factors into opportunities and threats, and
internal factors into strengths and weaknesses is arbitrary
It is better to carefully identify the external and internal forces that impact
the firm and then analyze their implications
Strategic fit= the consistency of a firm’s strategy with:
1. The firm’s external environment
2. Its internal environment (especially with goals & values and resources &
capabilities)
Strategic fit also relates to the internal consistency among the different elements
of a firm’s strategy
Effective strategies are strategies where functional strategies and
individual decisions are aligned with one another to create a consistent
strategic position
This is basically the idea of Porter’s conceptualization of the firm as an
activity system
,Contingency theory: states that there is no single best way of organizing or
managing
What the best way is depend on the circumstances
o Especially the characteristics of the organization’s environment
,Strategy is the overall plan for deploying resources to establish a favorable
position
A tactic is a scheme for a specific action
Strategic decisions:
- Are important
- Involve a significant commitment of resources
- Are not easily reversible
There is no general theory of strategy
Game theory tried to achieve one, but has only achieved limited success
First, companies used corporate planning (long-term planning)
This didn’t work because companies couldn’t plan this far ahead.
Therefore, Strategic Management focusses on competition as the central
characteristic of the business environment and on performance
maximization as the primary goal of strategy
Resource-based view of the firm: Puts emphasis on internal resources and
capabilities to identify how a firm is different from their competitors and design
strategies to exploit these differences
Strategy:
- Is focused on achieving certain goals
- Involves allocating resources
- Implies some consistency, integration, or cohesiveness of decisions and
actions
Strategy has become less concerned with detailed plans and more about
guidelines for success
,
Maureen Koek
Chapter 1: The Concept of Strategy
The four common elements in successful strategies:
1. Goals that are consistent and long-term
2. Profound understanding of the competitive environment
a. Understanding the external environment
3. Objective appraisal of resources
4. Effective implementation
Fig. 1.1
The Basic Framework for Strategy Analysis
A two-way classification of internal and external forces is superior to the four way
SWOT-framework
Because: classifying external factors into opportunities and threats, and
internal factors into strengths and weaknesses is arbitrary
It is better to carefully identify the external and internal forces that impact
the firm and then analyze their implications
Strategic fit= the consistency of a firm’s strategy with:
1. The firm’s external environment
2. Its internal environment (especially with goals & values and resources &
capabilities)
Strategic fit also relates to the internal consistency among the different elements
of a firm’s strategy
Effective strategies are strategies where functional strategies and
individual decisions are aligned with one another to create a consistent
strategic position
This is basically the idea of Porter’s conceptualization of the firm as an
activity system
,Contingency theory: states that there is no single best way of organizing or
managing
What the best way is depend on the circumstances
o Especially the characteristics of the organization’s environment
,Strategy is the overall plan for deploying resources to establish a favorable
position
A tactic is a scheme for a specific action
Strategic decisions:
- Are important
- Involve a significant commitment of resources
- Are not easily reversible
There is no general theory of strategy
Game theory tried to achieve one, but has only achieved limited success
First, companies used corporate planning (long-term planning)
This didn’t work because companies couldn’t plan this far ahead.
Therefore, Strategic Management focusses on competition as the central
characteristic of the business environment and on performance
maximization as the primary goal of strategy
Resource-based view of the firm: Puts emphasis on internal resources and
capabilities to identify how a firm is different from their competitors and design
strategies to exploit these differences
Strategy:
- Is focused on achieving certain goals
- Involves allocating resources
- Implies some consistency, integration, or cohesiveness of decisions and
actions
Strategy has become less concerned with detailed plans and more about
guidelines for success
,
