Introduction to Strategy and

StrategicThinking

•Strategic Management (5 ECTS)

•Ismo Vuorinen

•Principal Lecturer

•Autumn 2010

What is Strategy

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 competences with the aim

of fulfilling stakeholder expectations

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Characteristics of

Strategic Decisions

Long-term direction

Scope of an organisation’s activities

Competitive advantage

Strategic fit with business environment

Organisation resources and competences

Values and expectations of power players

1-3

Implications of Strategic Decisions

Complexity

Uncertainty

Operational

decisions

Integration

Relationships and

networks

Change

1-4

Levels of Strategy

1-5

Operational strategy

Business-level

strategy

Corporate-

level

strategy

What is a Strategic Business Unit?

A strategic business unit (SBU) is a part

of an organisation for which there is a

distinct external market for goods or

services that is different from another

SBU.

1-6

Vocabulary of Strategy

Mission

Vision

Goal

Objective

Strategic capability

Strategies

Business model

Control

1-7

Vocabulary of Strategy: Nokia

Vision/Mission

◦ Connecting is about helping people feel close to

what matters. Wherever, whenever, Nokia believes

in communicating, sharing, and in the awesome

potential in connecting the 2 billion who do with

the 4 billion who don’t.

1-8

Vocabulary of Strategy:

Kingston University

Mission

◦ To promote participation in higher education, which it regards as a democratic entitlement; to strive for excellence in learning, teaching, and research; to realise the creative potential and fire the imagination of all its members; and to equip its students to make effective contributions to society and the economy.

1-9

What is Strategic Management?

Strategic management includes

understanding the strategic position of a

organisation, making strategic choices for

the future, and managing strategy in action.

1-10

Exhibit 1.3 The Exploring

Corporate Strategy Model

1-11

What is

Strategic Position?

Strategic position is concerned with the

impact on strategy of the external

environment, an organisation’s strategic

capability and the expectations and influence

of stakeholders.

1-12

Strategic Position

1-13

The

Strategic

Position

Environment

Culture

PurposeCapability

What are Strategic Choices?

Strategic choices involve understanding

the underlying bases for future strategy at

both the business unit and corporate

levels and the options for developing

strategy in terms of both the directions

and methods of development.

1-14

Strategic Choices

1-15

Strategic

Choices

Business-

level

Innovation

InternationalCorporate-

level

Evaluation

What is Strategy in Action?

Strategy in action is

concerned with ensuring

that strategies are working in practice.

1-16

Strategy in Action

1-17

Strategy

in Action

Processes

Changing

ResourcingStructuring

Practice

Strategic Thinking within different stages of business

(Näsi- Aunola, 2001)

Strategy as a world viewA set of principles that work in practice

Based on trial and error

Strategy as a turf (territory)Definition of the sphere of operations (products / markets /

geographical scope etc.)

Strategia as a plan Planning of the basics of business to achieve the desired objectives

Strategy as a pattern in the stream of decisions Strategy work is like navigating a vessel

-- task-- equipment -- differing situations (deep sea, archipelago)-- varying circumstances (weather, wind etc.)

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Strategic Planning

Strategic Management

Strategic leadership

Strategic

Analysis

Strategic Thinking and Subconcepts (Näsi – Aunola, 2001)

Strategic thinking (Näsi - Aunola, 2001)

• Strategic Analysis Identify the relevant factors in the internal and external environment (PESTEL,

SWOT, CSFs)

may be performed by outside analysts (not by management itself)

• Strategic planning Deliberate action done by management (systematic, hierarchical)

Result is a plan (an internal memo and/or a document for stakeholders)

• Strategic management Planning, implementation, control (a process consisting of successive phases)

• Strategic leadership Leading the people as the main part of strategy work

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