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Which definition of strategy emphasizes a logical flow from goals to the allocation of resources?
Which definition of strategy emphasizes a logical flow from goals to the allocation of resources?
What does Mintzberg suggest about the nature of strategy?
What does Mintzberg suggest about the nature of strategy?
Which characteristic is essential for gaining a competitive advantage according to the definitions provided?
Which characteristic is essential for gaining a competitive advantage according to the definitions provided?
What does the long-term orientation of strategy allow companies to do?
What does the long-term orientation of strategy allow companies to do?
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What is NOT a distinctive characteristic of strategic decisions, as mentioned in the content?
What is NOT a distinctive characteristic of strategic decisions, as mentioned in the content?
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Which statement best captures Drucker's view of strategy?
Which statement best captures Drucker's view of strategy?
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What is one of the main advantages of long-term orientation in strategy?
What is one of the main advantages of long-term orientation in strategy?
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What aspect of organizations is highlighted in the definition of strategy?
What aspect of organizations is highlighted in the definition of strategy?
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What is the primary function of strategy statements in public-sector organisations?
What is the primary function of strategy statements in public-sector organisations?
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What is the primary focus of resource allocation in strategy deployment?
What is the primary focus of resource allocation in strategy deployment?
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Which level of strategy focuses on how businesses compete within their markets?
Which level of strategy focuses on how businesses compete within their markets?
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What is a key aspect that differentiates a company's strategy from a series of random decisions?
What is a key aspect that differentiates a company's strategy from a series of random decisions?
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Which of the following is NOT a component of corporate strategy?
Which of the following is NOT a component of corporate strategy?
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Which model highlights methods to avoid imitation by competitors?
Which model highlights methods to avoid imitation by competitors?
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What is a key characteristic of functional strategies?
What is a key characteristic of functional strategies?
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Which group primarily benefits from a well-articulated strategy statement in a voluntary organisation?
Which group primarily benefits from a well-articulated strategy statement in a voluntary organisation?
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What critical question should an organization's purpose address?
What critical question should an organization's purpose address?
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What is the main objective of a mission statement?
What is the main objective of a mission statement?
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The macro-environment appears primarily in which part of the exploring strategy framework?
The macro-environment appears primarily in which part of the exploring strategy framework?
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What does a vision statement primarily focus on?
What does a vision statement primarily focus on?
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What does business-level strategy typically emphasize?
What does business-level strategy typically emphasize?
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What impact does a clear organizational purpose have on stakeholders?
What impact does a clear organizational purpose have on stakeholders?
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Strategic statements can serve which of the following purposes?
Strategic statements can serve which of the following purposes?
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What does the 'perimeter' of a value creation model define?
What does the 'perimeter' of a value creation model define?
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What do statements of corporate values primarily communicate?
What do statements of corporate values primarily communicate?
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Which of the following is NOT typically considered an objective of an organization?
Which of the following is NOT typically considered an objective of an organization?
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What are the three main themes that a strategy statement should summarize?
What are the three main themes that a strategy statement should summarize?
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In what way does the concept of 'scope' in a strategy statement manifest?
In what way does the concept of 'scope' in a strategy statement manifest?
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What does an organization's 'advantage' refer to in a strategy statement?
What does an organization's 'advantage' refer to in a strategy statement?
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The example of IKEA's strategy statement emphasizes which key aspect?
The example of IKEA's strategy statement emphasizes which key aspect?
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Which statement about strategy statements is accurate?
Which statement about strategy statements is accurate?
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What is a triple bottom-line approach in the context of organizational objectives?
What is a triple bottom-line approach in the context of organizational objectives?
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Study Notes
Business Strategy
- Presented by Sandra Ramos, 2024/2025
- Introduces the concept of business strategy.
Definitions
- Chandler's definition: The determination of long-run goals and objectives of an enterprise, plus the necessary action courses and resource allocation.
- Porter's definition: Competitive strategy is about being different. Deliberately choosing a different set of activities to deliver a unique mix of value.
- Drucker's definition: A firm's theory about how to gain competitive advantages.
- Mintzberg's definition: A pattern in a stream of decisions.
- Exploring Strategy's definition: The long-term direction of an organization.
- Essential elements, yet different, for various authors: Chandler emphasizes a logical flow from goal setting to resource allocation. Porter focuses on deliberate choices, competition, and differentiation. Drucker views strategy as a framework for a firm's success. Mintzberg acknowledges that strategies don't always follow a linear plan and can emerge organically.
Three elements
- Long-term: Strategies are measured over years (e.g., decades, or more for some organizations).
- Strategic Direction: Strategies follow a long-term orientation or trajectory. They may take time to emerge coherently.
- Organisation: Organizations are complex entities with internal and external relationships involving multiple stakeholders.
Long-Term Orientation
- Advantage 1: Includes deliberate and emergent, incremental aspects.
- Advantage 2: Can be based on the search for competitive advantage, cooperation, or imitation.
Three Horizons Framework
- Horizon 1: Extend and defend core business
- Horizon 2: Build emerging businesses
- Horizon 3: Create viable options
Gaining Competitive Advantage
- Create additional value for customers by offering more than the cost.
- The value creation system (business model) should be difficult for competitors to imitate.
- A company without a unique strategy is essentially following a similar strategy as competitors.
Allocation of Resources
- Resources include financial, human, physical, technological, commercial, or relational.
- Strategists need to allocate appropriate resource mixes to promising activities.
- Strategic decisions must be difficult to reverse. Changing strategy every few months indicates a lack of a true strategy.
VIP Model
- Value: On what value creation model is performance based? (What business model is used?)
- Imitation: How can you avoid competitors copying your value creation model? How can you ensure long-term advantage?
- Perimeter: What is the perimeter of this value creation model? What markets should you go into and what markets should you avoid? What aspects of the value chain?
Purpose of Strategy: Mission, Vision, Values and Objectives
- Strategists: Must define and express a clear and motivating purpose.
- Purpose: Clearly defines how the organization makes a difference (for stakeholders).
- Mission Statement: Aims to provide clarity to employees and stakeholders about the organization's fundamental purpose. (What business are we in? How do we make a difference?)
- Vision Statement: Focuses on the future and aims to motivate people. (What do we want to achieve?)
- Values: These are enduring principles guiding the organization's strategy and operation. They are likely to change with circumstances and need to be communicated well.
- Objectives: Specific outcomes to be achieved, often expressed in precise financial terms (e.g., sales, profits). Can also include quantifiable market-based objectives (e.g., market share) and triple bottom line objectives (economical, environmental and social).
Strategy Statements
- Entrepreneurs and managers should be able to summarize their organization's strategy with a concise statement.
- Key themes include:
- Fundamental goals (mission, vision, objectives)
- Scope or domain of activities
- Advantages or capabilities
- Scope: Customers, geographic location, internal activities/processes.
- Advantage: How an organization achieves objectives, characteristics that distinguish it from competitors (know-how, skills, value to customers/users).
- IKEAs Example: To create a better everyday life for the many people by offering a wide range of well-designed, functional home furnishings at low prices.
Strategy Statements
- Strategy statements are not always fully achieved due to unexpected changes.
- They provide a valuable guide for daily decisions.
- Allows observers to understand the general direction of the organization.
- Ability to provide a clear strategy statement is a good indicator of managerial competence.
- Relevant to various organizations (start-ups, public sector, voluntary organizations).
Levels of Strategy
- 1st Level: Corporate Strategy: Concerns the overall scope of an organization and how value is added to constituent businesses. Includes geographical scope, product diversity, business acquisitions, and resource allocation between different elements.
- 2nd Level: Business-Level Strategy: Focuses on how individual businesses compete in specific markets. Addresses issues like innovation and responding effectively to competitor moves. Includes entrepreneurial start-ups or business units in larger corporations.
- 3rd Level: Functional Strategies: How the company's components (departments, resources, and people) effectively support corporate and business-level strategies.
Exploring Strategy Framework
- Strategic Position: Impact of macro-environment, industry, organizational capabilities, stakeholder expectations, and culture on strategy.
- Strategic Choices: Options for strategy direction and methods.
- Strategy in Action: Forming and implementing strategies.
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Description
Explore the fundamental concepts of business strategy through various definitions provided by renowned authors like Chandler, Porter, Drucker, and Mintzberg. This quiz will test your understanding of how different perspectives shape the way organizations strategize for long-term success.
