2) Exploring Strategy Model

Strategic position
The strategic position is concerned with the impact on strategy of the external environment, the
organisation’s strategic capability (resources and competences), the organisation’s goals and the
organisation’s culture.
Fundamental questions for Strategic Position:
• What are the environmental opportunities and threats?
• What are the organisation’s strengths and weaknesses?
• What is the basic purpose of the organisation?
• How does culture shape strategy?

Strategic choices
Strategic choices involve the options for strategy in terms of both the directions in which strategy
might move and the methods by which strategy might be pursued.
Fundamental questions for Strategic Choice:
• How should business units compete?
• Which businesses to include in the portfolio?
• Where should the organisation compete internationally?
• Is the organisation innovating appropriately?
• Should the organisation buy other companies, form alliances or go it alone?
Strategy in action
Strategy in action is about how strategies are formed and how they are implemented.
The emphasis is on the practicalities of managing.
Fundamental questions for Strategy in Action
• Which strategies are suitable, acceptable and feasible?
• What kind of strategy-making process is needed?
• What are the required organisation structures and systems?
• How should the organisation manage necessary changes?
• Who should do what in the strategy process?
The Exploring Strategy Model can be applied in many contexts.
In each context the balance of strategic issues differs:
• Small Businesses (e.g. Purpose and Growth issues)
• Multinational Corporations (e.g. Geographical Scope and Structure/Control issues)
• Public Sector Organisations (e.g. Service/Quality and Managing Change
issues)
• Not for Profit Organisations (e.g. Purpose and Funding issues)

4) Value Chain Net

6) First Mover Advantage
First-mover advantage exists where an organisation is better off than its competitors as a result of
being first to market with a new product, process, or service. However there are also some
disadvantages.

First-mover advantages
Experience curve benefits
Scale benefits
Pre-emption of scarce resources
Reputation
Buyer switching costs
SECTION – B

1) Porter’s Five Forces

Developed by Michael Porter: forces that shape and influence the industry or market the
organisation operates in.
–Strength of Barriers to Entry - how easy is it for new rivals to enter the industry?
–Extent of rivalry between firms – how competitive is the existing market?
–Supplier power – the greater the power, the less control the organisation has on the supply of
its inputs
–Buyer power – how much power do customers in the industry have?
–Threat from substitutes – what alternative products and services are there and what is the
extent of the threat they pose?

• The ‘SIXTH FORCE’: How the wider environment shapes the other 5 Forces
How Complements interact to create value
 1) Porter Diamond

Porter’s Diamond – explains why some locations tend to produce firms with sustained
competitive advantages in some industries more than others.
The four drivers in Porter’s Diamond stem from:
local factor conditions
local demand conditions
local related and supporting industries
local firm strategy structure and rivalry.

A model that attempts to explain the competitive advantage some nations or groups have due
to certain factors available to them. The Porter Diamond is a model that helps analyse and
improve a nation's role in a globally competitive field. The model was developed by Michael
Porter, who is recognized as an authority on company strategy and competition; it is a more
proactive version of economic theories that quantify comparative advantages for countries or
regions.

The Diamond Model demonstrates that countries can become competitive regardless of
whether they possess natural factor endowments such as land and natural resources. In the
Diamond Model, the role of government is to encourage and push organizations and
companies to a more competitive level, thereby increasing performance and ultimately the
total combined benefit.
4) The Balanced Scorecard
The Balanced Scorecard is a management tool that provides stakeholders with a comprehensive
measure of how the organization is progressing towards the achievement of its strategic goals.

 Balances financial and non-financial measures

 Balances short and long-term measures
 Balances performance drivers (leading indicators) with outcome measures (lagging
indicators)
 Should contain just enough data to give a complete picture of organizational performance…
and no more!
 Leads to strategic focus and organizational alignment.

 Achieve strategic objectives

 Provide quality with fewer resources
 Eliminate non-value added efforts
 Align customer priorities and expectations with the customer
 Track progress
 Evaluate process changes
 Continually improve
 Increase accountability
5) CAGE Framework

The CAGE framework of distance presented here considers four attributes:

–cultural distance (religious beliefs, race, social norms, and language);
–administrative or political distance (colony-colonizer links, common currency, and trade
arrangements);
–geographic distance (the physical distance between the two countries, the size of the target country,
access to waterways and the ocean, internal topography, and transportation and communications
infrastructures); and
–economic distance (disparities in the two countries' wealth and variations in the cost and quality of
financial and other resources)
6) Internationalisation Drivers