Johnson Scholes And Whittington

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Johnson, Scholes & Whittington – Exploring Strategy, text and cases Chapter 1 – Introducing Strategy Defining strategy – Strategy is about the key issues for the future of organizations, or in other words, the long term direction for an organization. The description of strategy in the book has two advantages: 1. It can include deliberate, logical strategy and incremental, emergent patterns of strategy; 2.

It can lay the focus on differences and competition as well as on recognizing the roles of cooperation and imitation. The long term: As strategies are often measured over years or even decennia, the importance of strategy is big.

This can be easily explained in the ‘Three Horizons Framework’. The Three Horizons Framework is a figure which aims for a company to excist out of three businesses or activities, these are defined by horizons.

(figure 1) Horizon 1: Basically the current core activities of a company. Horizon 2: Where companies are creating new possibilities to gain profit. Figure 1. The three horizons framework Horizon 3: Were a company create viable options, where nothing is sure. For example, research and development project and start-up ventures. Cannot predict what is coming.

In short it can be said that companies should focus on the long term strategy instead of only on the short term issues. The strategic direction: Strategies follow always a kind of path or pattern. Therefore, strategies are set according to long term objectives.

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Most of the times, the objectives are set in order to increase maximum profit for the stakeholders. The organization: Organizations involve different, complex relationships with shareholders. These are internal as well as external. * Management is a critical factor in establishing and implementing a strategy. Levels of strategy

Whittington Strategy Model

There are three levels of strategy 1. Corporate level strategy: Has to do with the overall scope of the company and how value is added to the whole organization. 2. Business level strategy: How a company should compete in its specific market. Also called a competitive strategy. 3. Operational strategies: is about how different units of a company implements the business and corporate strategy with regard to the resources, processes and people. Defintions Strategy statement: is the summary of the strategy, should be short. Also it should consist of parts such as: goals, scope, activities and advantages.

Scope: Consists of customers or clients; geographical location; extent of internal activities (vertical integration) Advantage: How the company will achieve the objectives which are set for itself in the chosen domain. Mission: What do we want to be. Vision:How do we want to achieve this. Objectives:What do we have to achieve in the coming period. Branches of strategy: There are three main braches: 1. Strategy context: Internal and external context of organizations. Researches the industry analysis, cultural analysi and the resource-based view. 2. Strategy content: Concerns content of different strategies and their level of success.

Researches the choices and performances of different strategies. 3. Strategy process: studies how strategies are formed and implemented. Researches the strategic planning, choices and changes and strategy-as-practice. * Studying strategy involves different kinds of perspectives, such as psychological, social and economic views. The exploring strategy model: This model examines the understanding of the strategic position of a company (the context); assessing the strategic choices for the future (the content) and manages strategy in action (process). The strategic position:

Concerned with the impact of strategy of the external environment, the company’s strategic capability, the goals of the company and the companies culture. 1. The environment: is mainly focusing on opportunities and threats which are available in the environment where the company is operating in. 2. Strategic capability: is made up about a companies resources, such as machines. Its competences are for example technical and managerial skills. 3. Strategic purpose: each company has its own mission, vision and objectives. What they are mainly focusing on is what a company wants to achieve in the future. . Culture: Organizational cultures might be important for a company, as it can influence the strategy. Therefore, it is important to know how a culture can shape strategy. The strategic choices: Examines the options in terms of direction (in which the strategy might move) and the methods (which the strategy might persue). 1. Business strategy: also called competitive strategy. How a company seeks to compete against other companies. 2. Corporate strategy & diversification: the portfolio scope, or in other words, which businesses should be included in this portfolio.

Diversification in mainly about the range of products and markets. 3. International strategy: form of differentiation and in which international markets a company could compete. challenging. 4. Innovation & entrepreneurship: in order to survive, a company might want to be innovative at all times. Entrepreneurship, or any form of it, is therefore also a kind of innovation. 5. Acquisition & alliances: Mainly about extending a company and in which way this should be implemented. By buying another company, ally or to go it solely. The strategy in action:

How a strategy is formed and applied. 1. Strategic evaluation: When strategic options have been set it is important to see if they are relevant. Consequently, several factors should be kept in mind, such as, suitability, acceptability and feasibility. 2. Strategic development process: what kind of planning process should a company have. 3. Organizing: When a strategy is set, organization is fundamental in order to implement it. 4. Leadership and strategic change: Managing involves leadership and change. This is important as we live in a dynamic world. 5.

Strategic practice: Who does what in the strategic process. * Issues regarding the exploring strategy model: – Small companies – Multinational corporations – Public sectors and not-for-profits companies The strategy lenses Ways of looking at strategic issues differently in order to generate many insights. * Strategy as design: planning and analyzing * Strategy as experience: Strategy influenced by experience of managers * Strategy as variety:Initiatives, diversity and new options * Strategy as discourse: * The lenses encourages the exploration of different perspectives.