1. Chapter 16
Strategy

2. Strategy Various definitions and approaches
“identifying key factors and responding with an intentional plan”
Informed action to secure desired outcome
“Competitive Advantage” the dominant paradigm
1. Positioning (Porter) – external mapping
2. Resource-based (Barney) – internal resources
Conceptual and technological advances have seen emergence of other paradigms
Chapter 16
© Philip O’Regan 2016

3. Strategies for growth 1. Organic 2. Differentiation 3. Acquisition
Growth generated internally (primarily)
Typically focus is on increasing revenue
2. Differentiation
Exploiting unique selling points
Focus on brand (and price)
3. Acquisition
Focus on synergies, market share, etc
Favoured by dominant governance model
Chapter 16
© Philip O’Regan 2016

4. Industry/sector analysis
Various tools/techniques developed
Give different insights into sector:
competition
profitability
key success factors
value propositions
Useful to use various approaches
Chapter 16
© Philip O’Regan 2016

5. Porter’s “Five Forces”
Major impact on strategic planning
Forces that impact competition/profitability:
barriers to entry
competitive rivalry
power relative to buyers
power relative to suppliers
threat of substitutes
Framework for understanding context(s)
What are trends, risks, opportunities, etc.
Chapter 16
© Philip O’Regan 2016

6. Value chain analysis (VCA)
Porter
Prompts focus on process and competence
Chapter 16
© Philip O’Regan 2016

7. Industry life cycle Most industries have life cycle
introductory phase
growth
maturity
decline
Understanding phase should inform analysis
e.g. investing in growth phase more attractive than in decline
Strengthened if complemented by insights from e.g. product life cycle analysis
Chapter 16
© Philip O’Regan 2016

8. Value net Important insight on “complementors”
Shows inter-dependence that exists in most sectors/industries
e.g. Intel
Prompts more holistic consideration of strategic options
co-operation v. competition
Chapter 16
© Philip O’Regan 2016

9. Strategic planning Formal process typical PESTEL SWOT
(but note alternative views, e.g. Mintzberg)
PESTEL
SWOT
Portfolio analysis
Balanced score card
Chapter 16
© Philip O’Regan 2016

10. Financing strategy Key accounting input Accounting numbers central to
Overall strategic planning role
Detailed budgetary role
Accounting numbers central to
formulation
planning
control and review
Role challenged by technology, failures
Chapter 16
© Philip O’Regan 2016

11. Summary Strategy key to corporate activity
Plan with future orientation
Competitive advantage view
Industry/sector analysis
Strategic planning
Financing strategy
Central role of accounting information
Chapter 16
© Philip O’Regan 2016