2. NBS Strategic Management Division2004/5 Page 1 SM352 Strategy Introduction to Strategy

3. NBS Strategic Management Division2004/5 Page 2 Support Materials  Teaching and Learning Plan on blackboard –Week by week topics –Learning outcomes –Seminar topics –Directed learning

4. NBS Strategic Management Division2004/5 Page 3 Aims of Unit  To develop the student's understanding of the concepts underlying the strategic management process through: –the application of a variety of frameworks supporting strategic analysis –the identification and evaluation of strategic options –explaining issues affecting the implementation of strategic change

5. NBS Strategic Management Division2004/5 Page 4 General Learning Outcomes  select and apply appropriate frameworks to analyse an organisation and its external environment.  identify, explain and evaluate the current objectives and strategies of an organisation.  identify and explain the major strategic issues that need to be addressed by top management.  propose and evaluate appropriate strategic options.  understand and explain the process of strategy implementation and the management of strategic change.  write reports that present the results of student's analysis and synthesis in a clear and concise manner.  recognise that there are alternative models of strategic process.

6. NBS Strategic Management Division2004/5 Page 5 Teaching/Learning  formal lectures to introduce key theories and frameworks (1 hour each week, 24 weeks)  seminars to reinforce the lecture material (4 per semester)  the application of frameworks to organisations through case studies  student centred learning with support material

7. NBS Strategic Management Division2004/5 Page 6 Assessment  Assignment, weighting 50%, issued in Semester 1 and submitted in December 2004  Examination weighting 50%, at the end of Semester 2

8. NBS Strategic Management Division2004/5 Page 7 Set Text  Core Text: –Johnson, G, & Scholes, K. (2002) - Exploring Corporate Strategy (6th edition). FT Prentice Hall, London. –Journals (see L&TP).  Supporting Text: –Campbell, D., Stonehouse, G. & Houston, B. (2002) - Business Strategy - An Introduction, 2nd Edition, Butterworth Heinemann, Oxford.

9. NBS Strategic Management Division2004/5 Page 8 Why study strategy  “Strategy” is a core component of all general business courses  It integrates the learning about business functions in Years 1 and 2  It is the largest unit by “weight” in NBS apart from the UG Project

10. NBS Strategic Management Division2004/5 Page 9 Evolution of Strategy Strategy –Sun Tzu’s (500BC) The Art of War. Referred to a “director of strategic planning” –Frontinius (100AD) Strategy is everything achieved by a commander, be it characterised by foresight, advantage, enterprise or resolution –Derives from Athens – strategos who was the head of the tribe –Increasing complexity required leadership and coordination and “the use of stratagems in war or business”  Strategem? –“a plan or trick to deceive the enemy”

11. NBS Strategic Management Division2004/5 Page 10 Rational/Deliberate Approach  Created and developed using the work of Chandler, Sloan, Andrews, Porter..... –“Economic strategy will be seen as the match between qualification and opportunity that positions a firm in its environment”  A clear process is followed and decisions are made in a “rational” manner: –Diagnosis  Prescription  Action

12. NBS Strategic Management Division2004/5 Page 11 Rational/Deliberate Approach External Analysis Internal Analysis SWOT Key Issues Strategic Options Strategy Implementation

13. NBS Strategic Management Division2004/5 Page 12 Rational/Deliberate Approach  Underlying premises: –Strategy formation should be a controlled, conscious process of thought –Responsibility for control and consciousness must rest with the Chief Executive –The model of strategy formation must be simple

14. NBS Strategic Management Division2004/5 Page 13 Rational/Deliberate Approach –Strategies should be unique: the best ones result from a process of creative design –Strategies emerge from this design process fully formulated –Strategies should be explicit and, if possible, articulated and should therefore be simple –Only after these unique, complete, explicit and simple strategies are fully formulated can they then be implemented

15. NBS Strategic Management Division2004/5 Page 14 Rational/Deliberate Approach  This approach has dominated strategic thinking for many years: –the underlying concepts are simple –there are lots of analytical tools –it forces organisations to look both inside and outside –it works (?)

16. NBS Strategic Management Division2004/5 Page 15 Rational/Deliberate Approach  Planning has evolved during the 20th century: –budgeting and financial control –long-range planning –business strategic planning –corporate strategic planning –strategic management

17. NBS Strategic Management Division2004/5 Page 16  Chandler (1962) –“the definition 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 carrying out those goals”

18. NBS Strategic Management Division2004/5 Page 17  Andrews (1987) –“...a pattern of decisions...[which represent]... the unity, coherence and internal consistency of a company’s strategic decisions that position a company in its environment and give the firm its identity, its power to mobilise its strengths, and increase its likelihood of success in the marketplace”

19. NBS Strategic Management Division2004/5 Page 18  Ansoff and McDonnell (1990) –“...strategic management is a systematic process for managing strategic change which consists of the following: positioning of the firm through strategy and capability planning real-time strategic response through issue management systematic management of resistance during strategic implementation”

20. NBS Strategic Management Division2004/5 Page 19  Johnson and Scholes (2002) –“Strategy is the direction and scope of an organisation over the long term, which achieves advantage for the organisation through its configuration of resources within a changing environment and to fulfil stakeholder expectations.”

21. NBS Strategic Management Division2004/5 Page 20 Now Future Direction Mission Goals Objectives External Environment Resources Stakeholder Expectations

22. NBS Strategic Management Division2004/5 Page 21 The Key Strategic Decisions What Markets shall we be in? How shall we compete in our Markets? What Products/Services shall we offer?

23. NBS Strategic Management Division2004/5 Page 22 Problems of Rational/Deliberate Approach –the process can take a long time and ties up human and financial resources –the process can become an end in itself –it is good at producing lists of information but not so good at showing the way forward, especially in complex and dynamic situations –many very successful strategies were arrived at by accident rather than design

24. NBS Strategic Management Division2004/5 Page 23 Rational/Deliberate Approach External Analysis Internal Analysis SWOT Key Issues Strategic Options Strategy Implementation