Strategy and strategic

thinking
“Strategy didn't start with Igor Ansoff,
neither did it start with Machiavelli. It
probably did not even start with Sun
Tzu. Strategy is as old as human
conflict.” (Hamel,1990s)

Cristina Boari
 Origins 1)
• First Industrial Revolution (mid-18th to mid-
19th)
• Most firms remain small and with little fixed capital
• Companies lacked power to influence market outcomes
• Second Industrial Revolution (second half of
19th Century)
• Railroads built mass markets (1850)
• Access to capital and credit allowed economies of scale
• “ Visible hand” superseded “ invisible hand”
• Large, vertically integrated companies in U.S., then Europe
• Captains of industry articulated strategic thinking: the role of
actors’ actions
• GM - Alfred Sloan (1923-1946)
• New Jersey Bell - Chester Barnard (1930s)
 Origins 2)
• World War II era (1939 - 1945)
• Allocating scarce resources across the economy was
problematic
• “Learning curves” concept (1920s – 1930s): for each
doubling of cumulated output, total costs would
decline (10 to 30%)
• The Theory of Games (1944)
• Company can exert positive control over market forces
by using formal planning
 The academic contributions
● The contribution of economists: Joseph
Schumpeter, Edith Penrose
● Elite U.S. business schools emerged
○ Wharton (1881) Harvard (1908)
○ managers should be trained to think strategically
○ required second-year course in Business Policy
(1912)
○ students gain a broader perspective faced by
executives
 “I begged, borrowed and stole concepts and theoretical
insights from psychology, sociology and political science.
And I attempted to integrate them into a holistic
explanation of strategic behavior.” (Ansoff)
Definition of strategy
● Strategic decisions deal more with factors external to the
firm than with internal factors…specifically with the
selection of the product mix which the firm will produce
and the markets to which it will sell (Ansoff, 1960s)

● Strategy can be defined as the 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 carrying out those goals (Chandler,
1960s)
The role of business schools
• The case-study method
• The SWOT analysis (Andrews, 1960s)
• Market myopia and the customer as
reference (Levitt, 1960)
• The mission of the firm as reference (Ansoff,
1965)
The “SWOT” analysis
FIRM ENVIRONMENT

Strengths Opportunities

Weakness Threats

STRATEGY
“Ducati exceeds the demands of even the
most fanatical enthusiasts and riders…”

Cristina Boari
The Rise of Strategy Consultants
● Boston Consulting Group (BCG) (1963)
○ Applied quantitative research methods to business strategy

● BCG as a “strategy boutique”

○ Texas Instruments
○ Black and Decker
● Learning curve (1965-1966) depends on
○ Learning
○ technological innovation
○ economies of scale
Strategy at different levels
o Corporate strategy
○ To create value through the combination
and the coordination of SBUs ( a portfolio of
SBUs)
○ Business (unit) strategy
○ To reach a competitive advantage at the
product/market level (SBU)
○ Functional strategy
 GM/McKinsey Strategic Business Units and
Portfolio Analysis

BCG growth-share matrix

Problems and criticism
● Experience curve criticisms
• What if the technology changes?
• What if the demand decreases?
● Portfolio analysis under attack
• Too much subjectivity
• Can new options emerge?
● Financial capital
• Is it the only scarce resource on which top management had
to focus?
● Backward focused
• 1973 and 1979 world oil crisis
 More recent interests and
tools
● Late 1970s and 1980s- focus on competitive
environment: the 5 forces framework

● 1990s –focus on resources and knowledge: the

resource-based view

● 2000s-Adapting to turbulence and strategic

entrepreneurship
“Strategy safari”, Mintzberg, Ahlstrand and Lampel, FT publishing 2009
 BUSINESS STRATEGY Dyer et al 20

A plan to gain and sustain competitive

advantage that involves making four inter-
related strategic choices: (1) markets to
compete in; (2) unique value the firm will offer in
those markets; (3) the resources and
capabilities required to offer that unique value
better than competitors; and (4) ways to sustain
the advantage by preventing imitation.
Deliberated strategy vs emergent strategy
Why do we need strategy ?

Cristina Boari
 STRATEGY AS POSITIONING

To Support decisions

To enable
coordination
 STRATEGY AS DIRECTION

To maintain a
forward
looking and
inspirational
goal
 Where do great strategies really come
from?

“Where do great strategies come from”, Brandenburger, Strategy Science 2017

Cristina Boari
CREATIVITY FROM
Which is the source of their creativity in the
movie industry?

Founded in 2012
Movie distributor
& producer
More then 20 academy
Nominations
20 movies/year