Strategic Management

Week 1 Introduction

MSc / MA Semester 2 11/12

Phil Johnson

Phil Johnson

Teaching Fellow in Management

BA (Hons) 2:1 in European Studies

European literature, history and philosophy French language

MSc in Logistics & Supply Chain Management

Cranfield 1994

PGCE

Keele 2005
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Phil Johnson

Teaching Fellow in Management

1977-2004 Marks & Spencer plc

Store manager Third party logistics contracts Global supply chain strategy
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Phil Johnson

Teaching Fellow in Management

1998-2004 Visiting Lecturer

Cranfield University

Leeds Business School

Warwick University

Westminster University
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Objectives

To provide an overview of the process and procedures of strategy management. To provide an understanding of the main approaches to strategy in business, their practical and theoretical underpinnings, their limitations and weaknesses. To provide practice in applying these models to differing, complex and volatile situations.
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Timetable (flexible!)

Week 1

Overview

Objectives Timetable Assessment

History Elements of strategic management Case study: EMB inc

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Timetable

Week 2
Stakeholders

Mission, Vision, Values External analysis

Macro

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Timetable

Week 3

External analysis

Industry/sector

Internal analysis Case Study: EMB inc (re-visited) Corporate structures and strategic management

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Timetable

Week 4

Corporate level strategy

Growth, portfolios, Ansoff

Business level strategy

Porter, Bowmans clock

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Timetable

Week 5

Intended & emergent strategies Assignment prep

Case study: to be confirmed

Wrap up

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Assessment

Case study circa 2,500 words (+/- 10%) Emphasis on analysis, not description Demonstrate that you understand the appropriate use of the tools we have discussed
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Sources and referencing

Use formal, reputable sources, such as textbooks, journal articles and the quality media (eg Financial Times, The Economist).

Do NOT use Wikipedia, or any site that offers prewritten term papers (such as Ivythesis or Scribd).

Please use Harvard referencing style.

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Sources

Set books KLE

Flash movie at:

http://www.keele.ac.uk/depts/aa/landt/KLE%20D EMO%20LDU%20version.swf
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What is strategy?

Would you tell me please, which way I ought to go from here?

That depends a good deal on where you want to get to said the Cat
Alices Adventures in Wonderland Lewis Carroll

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Strategy

Incircumstances of competition or conflict, as in the theory of games, decision theory, business administration, etc., a plan for successful action based on the rationality and interdependence of the moves of the opposing participants. OED Online 2005

Strategy is the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competencies with the aim of fulfilling stakeholder expectations.

Johnson, Scholes & Whittington, 2005 p9

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Some history

Sun Tzu (circa 400BC)

Strategic objectives External analysis Internal analysis Resulting action Plan Organise Coordinate Command Control
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Fayol (1841-1925)

Some history

1960s - Harvard business policy courses

emphasis on practicality, not theory or research

1960s & 70s - Development of

corporate planning

finance-driven

corporate planning departments

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Some history

1980s & 90s

Quinn, Mintzberg, Pettigrew

people [are] too imperfect and the world too complex for heavy reliance on analysis and planning (Johnson, Scholes & Whittington, 2008, p17) It is better to work with, rather than against, the messiness of organisations. (ibid.) Competitive advantage (1980) & Competitive Strategy (1985) resource-based theories (1990)

Porter

Hamel & Prahalad

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Elements of strategic management

Missions & Stakeholders

Johnson, Scholes & Whittington Exploring Corporate Strategy 2005 Phil Johnson 19

Vision

A visionis a view of a future reality that the organisation seeks.

Mellahi Frynas & Finlay Global Strategic Management 2005 p363

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Mission

The mission of an organisation outlines the broad directions that it should and will follow and briefly summarises the reasoning and values that lie behind it. The role of the mission statement is to communicate to all the stakeholders inside and outside the organisation what the company stands for and where it is headed. Lynch
Corporate Strategy 2006, p246 Phil Johnson 21

Mission

Mission statements should:

be specific enough to have an impact upon the behaviour of individuals throughout the business; reflect the distinctive advantages of the organisation and be based upon an objective recognition of its strengths and weaknesses; be realistic and attainable; be flexible enough to take account of shifts in the environment; emphasise the common ground amongst stakeholders, not the differences.
Adapted from Lynch Corporate Strategy 2006 Phil Johnson 22

Values

Core values are the principles that guide an organisations actions.

Johnson, Scholes & Whittington, 2005, p207

The underlying and enduring core principles that guide an organisations strategy and define the way the organisation should operate.
Johnson, Whittington & Scholes 2011, p121

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Values

Values should:

Place constraints on the means by which the organisation will seek to maximise shareholder value Increase the effectiveness with which the organisation builds competitive advantage through reinforcing strategic intent and building internal consensus and commitment.

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Stakeholders

Stakeholders are those individuals or groups who depend on an organisation to fulfil their own goals and on whom, in turn, the organisation depends.
Johnson, Scholes & Whittington Exploring Corporate Strategy 2008, p132

the individuals and groups who have an interest in the organisation and, therefore, may wish to influence aspects of its mission, objectives and strategies. Lynch
Corporate Strategy 2006, p172

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Stakeholder examples

Source: From R.E. Freeman, Strategic Management: A Stakeholder Approach, pub. Pitman 1984 Copyright 1984 by R. Edward Freeman

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Stakeholder analysis

Source: Adapted from A. Mendelow, Proceedings of the Second International Conference on Information Systems, Cambridge, MA, 1991. In Johnson Scholes and Whittington 2008, p156

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Conflict of expectations

Johnson, Scholes & Whittington, Exploring Corporate Strategy 2008, p155 Phil Johnson 28

Mission/Vision/Values

Marks & Spencer plc

Our Vision: To be the standard against which all others are measured. Our Mission: To make aspirational quality accessible to all. Our Values: Quality, value, service, innovation and trust.
M&S circa 2009

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Mission/Vision/Values

The purpose of the firm is to contribute to society by supplying goods of high quality at low prices in ample quantity. The happiness of man is built on mental stability and material affluence. To serve the foundation of happiness, through making mans life affluent with an inexpensive and inexhaustible supply of lifes necessities like water, is the duty of a manufacturer. The purpose of the enterprise is to materialise the duty and consequently contribute to society.

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Mission/Vision/Values

The purpose of the firm is to contribute to society by supplying goods of high quality at low prices in ample quantity. The happiness of man is built on mental stability and material affluence. To serve the foundation of happiness, through making mans life affluent with an inexpensive and inexhaustible supply of lifes necessities like water, is the duty of a manufacturer. The purpose of the enterprise is to materialise the duty and consequently contribute to society. Matsushita, in Mellahi Frynas & Finlay
Global Strategic Management 2005 p364 Phil Johnson 31

Mission/Vision/Values

Our Mission is to own and develop financially disciplined businesses that are leaders in responsibly providing adult tobacco consumers with superior branded products.
Altria Group Mission Statement www.altria.com Jan 12 Phil Johnson 32

Mission/Vision/Values

As an operating company of Altria Group, PM USA is guided by Altria Group's Mission to own and develop financially disciplined businesses that are leaders in responsibly providing adult tobacco consumers with superior branded products. Guided by Altria Groups Mission and Values, PM USAs role is to responsibly and effectively develop, manufacture and market superior branded cigarettes and smokeless products for adult tobacco consumers.

The Mission guides and informs the business decisions at Altria Group and its operating companies, which pursue the Mission by focusing on four strategies:

Invest in Leadership: We will invest in excellent people, leading brands and external stakeholders important to our business success. Align with Society: We will actively participate in resolving societal concerns that are relevant to our business. Satisfy Adult Consumers: We will convert our deep understanding of adult tobacco consumer needs into better, more creative and more satisfying products. Create Substantial Value for Shareholders: We will execute our business plans to create sustainable growth and generate substantial return for shareholders

www.philipmorrisusa.com Jan 12 Phil Johnson 33