Introduction to

strategy

Dr Michelle O’Toole

Dr. Michelle O'Toole 1

 Activity 1

Your definition of strategy

in 140 characters or less

Dr. Michelle O'Toole 2

 Strategy: an over-used term?

• A “verbal tic” (Rumelt, 2011)

• Commonly confused with ambition, success or goals
• Often used to describe non-strategic issues
– Operational
– Tactical
– Instantaneous
• But very difficult to define – no consensus in the literature

Rumelt, R. (2011) Good Strategy, Bad Strategy: The Difference and Why it Matters. Profile Books, London

Dr. Michelle O'Toole 3

 Which of these issues do you
think are strategic?

• Broadbent Ltd. is about to launch the new version of it’s high-

end mobile phone onto the market. On the eve of its product
launch, it discovers that a rival is planning to launch a similar
product at a lower price. What should Broadbent Ltd. do?

• The O’Toole Corporation is based in Ireland but acknowledges

there is potential global demand for its products and services.
However it only has sufficient resources to expand into one new
region. Where should it go first?

• A University in Ireland wishes to increase its reputation for high

quality teaching and research. What should it do?

Dr. Michelle O'Toole 4

 Strategic vs.
tactical/operational/instantaneous

Distinguished along dimensions of time, frequency, effort required,

consequences, and impact

Strategic issues:
• Address at least a medium-term time horizon, at best long-term (Time)
• Occur infrequently or emerge from a formalized planning cycle (Frequency)
• Require significant input from key people (Effort)
• Require significant information input from key functions (Effort)
• Require substantial resources to formulate and implement (Effort)
• Affect the long-term direction of the organization (Consequences)
• Affect many, if not all, of the organization’s activities (Consequences)
• Affect competitive dynamics (Impact)
• Involve major change to the firm’s activities (Impact)
• Become the over-arching blue-print for subsequent decisions (Impact)
Fleisher and Bensoussan (2007) ‘Business and competitive analysis’, Pearson: New Jersey p2-3

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 The activity

• For the first activity, I would like you to explore the

difference between strategic and
operational/tactical/instantaneous decisions by using
the Fleisher and Bensoussan framework to examine
a strategic issue or decision that you have
experienced in your career.

• Discuss how the issue or decision you’ve identified

matches up to the dimensions of time, effort, impact
or consequences described by Fleisher and
Bensoussan - does it score highly on all of these, or
less so on some?

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Dimensions of strategy

Purpose Process Content

Context

Adapted from DeWit and Meyer, 2014. Strategy: An International Perspective (5th edn.) p5

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Dimensions of strategy

How? Who?
Why? When?
What?

Where?

Iterative process……strategy never sleeps!

Adapted from DeWit and Meyer, 2014. Strategy: An International Perspective (5th edn.) p5

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 Three horizons for strategy (1)

• Horizon 1:
Extend and defend core business

• Horizon 2:
Build emerging businesses

• Horizon 3:
Create viable options

Dr. Michelle O'Toole 9

 Three horizons for strategy (2)

Source: M. Baghai, S. Coley and D. White, The Alchemy of Growth, Texere Publishers, 2000. Figure 1.1, p. 5
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Old woman or young woman? Both are “true”
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 The strategy lenses (1)

The strategy lenses are ways of looking at

strategy issues differently in order to
generate additional insights.

Looking at problems in different ways will

raise new issues and new solutions.

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 The strategy lenses (2)

Strategy can be seen as:

• Design
• Experience
• Variety
• Discourse

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 The strategy lenses (3)

Strategy as design
• Strategy can be designed in advance and a detailed plan
conceived by strategists.
• This approach is rational and objective.
• Little attention is paid to cultural, political or
unpredictable aspects of strategy.
• The design lens is systematic, analytical and logical.

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 The strategy lenses (4)

Strategy as experience
• Strategy is influenced by the experience of managers.
• The organisation’s culture and the taken-for-granted
assumptions and ways of doing things are key drivers of
strategy.
• Strategy is likely to build on and continue what has gone
before.

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 The strategy lenses (5)

Strategy as variety
• Strategy ‘emerges’ from an uncertain and changing
environment.
• Strategy comes from a variety of initiatives.
• New ideas ‘bubble up’ from unpredictable sources and
not just the top.
• Organisations need to encourage diversity and look for
initiatives at the bottom or the periphery of the
organisation.

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 The strategy lenses (6)

Strategy as discourse
• Attention is focused on the way managers
use language to frame strategic problems,
make strategy proposals, debate issues and
communicate strategic decisions.
• The way managers ‘talk’ about strategy
matters – it influences decisions.
• The discourse lens helps to uncover the
personal interests and ‘politicking’ of
managers.
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 Levels of strategy

Company Y
Network Level Company X

Company Z

Upstream
Business Unit 1 Business Unit 3
Corporate Level Downstream
Business Unit 2 Projects and
Technology

HR Operations
IT
Business Level Business Unit
Sales
Finance R+D

Adapted from DeWit and Meyer, 2010

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 Levels of strategy
• Network – relational actors, objectives,
arrangements [especially competition & cooperation]

• Corporate - definition of the businesses in which the

enterprise will compete/operate

• Business or competitive - deals with the choice of

how to compete/operate [especially markets & resources]

• Functional or operational - needs to be designed

and managed to enable overall competitive strategy
to succeed

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 Activity 2

Using the figure on slide 18 try and map out an

organisation of your choice according to network,
corporate, business and functional level strategies.
What goes on at each level? Who is involved?

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 Strategic tensions
• ‘At the heart of every set of strategic issues, a fundamental
tension between apparent opposites can be identified’
(DeWit and Meyer, 2014: 11)
• Profitability and responsibility
• Logic and intuition
• Markets and resources
• Competition and cooperation
• Deliberateness and emergence
• Exploitation and exploration
• Globalization and localization

• Each pair of opposites are in tension – they are inconsistent,

incompatible – if one is true then the other is not
• Yet each must be dealt with simultaneously
• How to deal with these strategic tensions?

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 The strategy checklist
Strategic position Strategic choices Strategy in action
• What are the • How should business units • Are strategies suitable,

environmental compete? acceptable and feasible?

opportunities and threats? • Which businesses to • What kind of strategy-
• What are the include in a portfolio? making process is
organisation’s strengths • Where should the needed?
and weaknesses? organisation compete • What are the required
• What is the basic purpose internationally? organisation structures
of the organisation? • Is the organisation and systems?

• How does culture fit the innovating appropriately? • How should the
strategy? • Should the organisation organisation manage

buy other companies, ally necessary changes?

or go it alone? • Who should do what in the

strategy process?
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 Working with strategy (1)

All managers are concerned with strategy:

• Top managers frequently formulate and control

strategy but may also involve others in the
process.
• Middle and lower level managers have to meet
strategic objectives and deal with constraints.
• All managers have to communicate strategy to
their teams.
• All managers can contribute to the formation of
strategy through ideas and feedback.

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 Working with strategy (2)

Organisations may also use strategy

specialists:
• Many large organisations have in-house
strategic planning or analyst roles.
• Strategy consultants can be engaged from
management consulting firms (e.g. Accenture,
IBM Consulting, PwC).
• There are a growing number of specialist
strategy consulting firms (e.g. McKinsey & Co,
The Boston Consulting Group).

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 Summary (1)

• Strategy is the long-term direction of an organisation. A

strategy statement should cover the goals of an
organisation, the scope of the organisation’s activities and
the advantages or capabilities the organisation brings to
these goals and activities.
• Corporate-level strategy is concerned with an
organisation’s overall scope; business-level strategy is
concerned with how to compete; and operational
strategy is concerned with how corporate- and business-
level strategies are actually delivered.
• The Exploring Strategy Model has three major elements:
understanding the strategic position, making strategic
choices for the future and managing strategy in action.
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 Summary (2)

• Strategy work is done by managers throughout an

organisation, as well as specialist strategic planners
and strategy consultants.
• Research on strategy context, content and process
shows how the analytical perspectives of economics,
sociology and psychology can all provide practical
insights for approaching strategy issues.
• Although the fundamentals of strategy may be similar,
strategy varies by organisational context, for example
small business, multinational or public sector.
• Strategic issues are best seen from a variety of
perspectives, as exemplified by the four strategy lenses
of design, experience, variety and discourse.
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