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Lecture 1: The Concept of Strategy

Lecture 1: The Concept of Strategy. The role of strategy in success. A framework for strategy analysis. Corporate strategy and business strategy. Common Elements in Successful Strategy. Successful Strategy. EFFECTIVE IMPLEMENTATION. Long-term, simple and agreed objectives.

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Lecture 1: The Concept of Strategy

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  1. Lecture 1:The Concept of Strategy • The role of strategy in success. • A framework for strategy analysis. • Corporate strategy and business strategy. MGTO321 (L1 & L2) -- Dr. JT Li

  2. Common Elements in Successful Strategy Successful Strategy EFFECTIVE IMPLEMENTATION Long-term, simple and agreed objectives Profound understanding of the competitive environment Objective appraisal of resources MGTO321 (L1 & L2) -- Dr. JT Li

  3. Sun Tzu: The Art of War Know the other and know yourself: Triumph without peril. Know nature and know the situation: Triumph completely. MGTO321 (L1 & L2) -- Dr. JT Li

  4. Elements of Success MADONNA GOALS • Single-minded quest for stardom. UNDERSTANDING • Identified emerging trends in popular culture. ENVIRONMENT • Understood showbiz distribution channels. RESOURSE • Recognized limited raw talent APPRAISAL • Relied on strengths in - self-promotion - image-creation - relationship management IMPLEMENTATION • Commitment to hard work • Disciplined, inspirational leadership • Attention to detail MGTO321 (L1 & L2) -- Dr. JT Li

  5. The Basic Framework:Strategy, the Link between the Firm And its Environment THE FIRM Goals and Values Resources and Capabilities Structure and Systems THE INDUSTRY ENVIRONMENT Competitors Customers Suppliers STRATEGY STRATEGY MGTO321 (L1 & L2) -- Dr. JT Li

  6. What is Strategy? • Distinguishing strategy from tactics: • Strategy is the overall plan for deploying resources to establish a favorable position. • Tactic is a scheme for a specific maneuvre. • Characteristics of strategic decisions: • Important. • Involve a significant commitment of resources. • Not easily reversible. MGTO321 (L1 & L2) -- Dr. JT Li

  7. Sources of Superior Profitability INDUSTRY ATTRACTIVENESS CORPORATE STRATEGY Which industries should we be in? RATE OF PROFIT ABOVE THE COMPETITIVE LEVEL How do we make money? COMPETITIVE ADVANTAGE BUSINESS STRATEGY How should we compete? MGTO321 (L1 & L2) -- Dr. JT Li

  8. Strategic Games/Business Concept Where to compete • Products • Geographic markets • Customers • Channels How to compete • Competitors • Customers (value proposition) • Industry chain (Degree of rivalry) • Internal/external participants MGTO321 (L1 & L2) -- Dr. JT Li

  9. Levels of Strategy and Organization Structure Corporate Head Office Corporate Strategy Business Strategy Division A Division B R & D R & D H R HR Functional Strategies Finance Finance Production Production Marketing/Sales Marketing/Sales MGTO321 (L1 & L2) -- Dr. JT Li

  10. Strategy Making : Design or Process? Strategy as design Strategy as process Planning and rational choice Many decision makers responding to multitude of external and internal forces INTENDED STRATEGY EMERGENT STRATEGY REALIZED STRATEGY MGTO321 (L1 & L2) -- Dr. JT Li

  11. Summary: Concept of Strategy • Sustained performance is what strategy is all about. • Each business should have a clear business concept: • where to compete • how to compete • Firms have a multiple stakeholders / objectives • Always clear about your assumptions MGTO321 (L1 & L2) -- Dr. JT Li

  12. Structure Of The Course The Concept of Strategy The firm's mission External Analysis Internal Analysis Industry Analysis Resource/ Sustainability Business-Level Strategies Low Cost & Differentiation Strategies Technology & Industry Evolution Corporate-Level Strategies Diversification and Scope of the firm International Strategy MGTO321 (L1 & L2) -- Dr. JT Li

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