1. Business Strategy
Prof J. Ignacio Canales

2. Some Basic Elements of a Good Strategy
Understanding of environment and competitors – Diagnosis of challenge
A guiding policy for dealing with the above – Given the problem above if we want X, how should we go about it? – guiding policy
A set of coherent actions to carry out the above – What should we do and when should we do it?
(See Rumelt, 2011: Chapter 5)

3. Wal-Mart Business Strategy
“Our strategy was to put good-sized stores into little one-horse towns that everyone was ignoring”
“Every day low Prices”
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5. P(Product) M(Market) What is a Business?
We can understand a business as the interception between Product or Service and a Market
P(Product)
M(Market)

6. What is Strategy?
Strategy is the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.
De wit and Meier

7. What is Strategy?
A long-term direction which seeks to meet the expectations of, and create value for, stakeholders
Johnson et al (2011)

8. What is Strategy?
“Determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for the carrying out of these goals”
~ Chandler (1962)
“Simplest very specific plan of action directed at a specified result within specified period of time”
~ Andrews (1971)
Stresses purpose and time dimension, distinguishes functional, business and corporate levels of strategy

9. What Strategy is Essence of strategy is choice.
No one in best position within industry depends on starting position of firm
Firm: collection of discrete but interrelated economic activities
Firm’s strategy defines its configuration of activities and how they interrelate
Competitive advantage results from firm’s ability to perform the required activities at lower cost or in unique way (differentiated) that creates buyer value
~ Porter 1994

10. Characteristics of Strategic Decisions
Long-term direction
Scope of an organization’s activities
Competitive advantage
Strategic fit with business environment
Organization resources and competences
Values and expectations of power players

11. Remember what is a Business?
We can understand a business as the interception between Product or Service and a Market
P(Product)
M(Market)

12. Change in the organisation Amount of Change PHASE 4
Transformational Change or Demise
Change in the
organisation
Amount of Change
PHASE 2
Strategic
Drift
PHASE 3
Flux
PHASE 1
Incremental
Change

13. Strategic fit Organization THE ENVIRONMENT THE Goals & Values
Resources &
Capabilities
Structure &
Systems
THE
ENVIRONMENT
Competitors
Rivals
Enemies
Customers
Suppliers
STRATEGY
Internal Fit
External Fit

14. Strategic Management
Strategic management includes understanding the strategic position of a organization, making strategic choices for the future, and managing strategy in action.

15. The Business System or Model

16. Competitive Advantage & Business System or Model
How can a company be successful?
Business System or Model
The configuration of resources, activities and product/service offering intended to create value for the customers
Product offering
The firm supplies goods or performs services for clients in the market place
Activity System
An integrated set of value creation processes leading to the supply of product and/ or service offerings
Resource Base
All means at the disposal of the organization for the performance of value-adding activities