Definition of strategy.

Strategy is the ability to create unique and valuable

position that is not easily imitated by others. Strategy is
what allows a firm to create and protect competitive
advantage. Michael Porter – What is Strategy (1996).
What are the reasons for failure of an
organization?
Strategy is a set of related actions that managers take
to increase their company’s performance.
 Strategic Leadership.
Task of most effectively managing a company’s
strategy-making process.
 Strategy Formulation.
Task of determining and selecting strategies
 Strategy Implementation
Task of putting strategies into action to improve a
company’s efficiency and effectiveness.
 Competitive Advantage
Results when a company’s strategies lead to superior
performance compared to competitors.

External analysis.
Purpose is to identify the strategic opportunities and
threats in the organization’s operating environment
that will affect how it pursues its mission.
External Analysis requires an assessment of:
 Industry environment in which company operates
1. Competitive structure of industry
2. Competitive position of the company
3. Competitiveness and position of major rivals
 The country or national environments
in which company competes
 The wider socioeconomic or macro environment
that may affect the company and its industry
1. Social Cultural
2. Government
3. Legal
4. International
5. Technological
6. Environmental

Internal analysis?
Purpose is to pinpoint the strengths and weaknesses of
the organization. Strengths lead to superior
performance and weaknesses to inferior performance.
Internal analysis includes an assessment of:
 Quantity and quality of a company’s resources and
capabilities.
 Ways of building unique skills and company-
specific or distinctive
competencies.
 Building & sustaining a competitive advantage
requires a company to achieve superior:
1. Efficiency
2. Quality
3. Innovations
4. Responsiveness to customers