Thompson, J., and Martin, F. Strategic Management: Awareness and Change, 6th Edition Chapter 1 Strategy Explained Strategies are means to ends. All organizations, large and small, profit-seeking and not-for-profit, private and public sector, have a purpose, which may or may not be articulated in the form of a mission and/or vision statement. Strategies relate to the pursuit of this purpose. Strategies must be created and implemented, and it is these issues which are addressed by our study of strategic management. This opening chapter begins by outlining how successful organizations manage their strategies, and what they achieve, before exploring the meaning of strategy in greater detail. It then continues with an explanation of the strategic management process in the context of the framework upon which this book is structured before explaining the different ways in which strategies are created. It then describes how the subject of strategic management has developed in the last 30 years, before concluding with a brief consideration of the similarities and differences in strategic management in various types of organization. Chapter 2 – Strategic Thinking, Environmental Analysis, Synergy and Strategic Positioning Good ideas for the future can either start inside the organization or be obtained from external contacts, and the ability to synthesize and exploit the information that is available to develop new products, new services and new strategic positions is a reflection of the organization’s strategic thinking capabilities. Think about how the idea for PartyGaming (Case 2.1) might have come about. At one level, matching, exploiting and changing the linkages between resource competency and environmental opportunity is an expression of organizational competitiveness, and the presence (or absence) of competitive advantage. It was shown earlier (Chapter 1) how it is essential for organizations to seek competitive advantage for every product, service and business in their portfolios. Strategic thinking embraces the past, present and future. Understanding patterns and lessons from the past will certainly inform the future – but given the dynamic, turbulent and uncertain business environments that affect many industries and organizations, it would be dangerous to assume that the future will reflect the past and be a continuation of either past or existing trends. Synergy is either a path to sustained growth or a ‘bridge too far’ for organizations. It is concerned with the returns that are obtained from resources. Ansoff (1968) argues that resources should be combined and managed in such a way that the benefits which accrue exceed those which would result if the parts were kept separate, describing synergy as the 2 + 2 = 5 effect. Simply, the combination of the parts produces results of greater magnitude than would be the case if the parts operated independently.
Chapter 3 – Resource-Led Strategy The resource-based view of strategy gradually emerged during the 1980s and 1990s with a series of important contributions, in particular work on core competency from Prahalad and Hamel (1990) and on added value by Kay (1993). This view helps to explain why some organizations succeed in creating competitive advantage and earning superior profits, while others do not. Consequently, it looks at strategies which can be identified with an individual company as distinct from those that are available to all competitors through an understanding of industries and markets. In other words, market opportunities have to be identified and then satisfied in an individual and distinctive way. Supporters of the resource-based view put forward a number of arguments. As long as there are opportunities which can be identified, it will normally be easier and less risky for organizations to exploit their existing resources in new ways than to seek to acquire and learn new skills and competencies. Innovation matters and new ways of
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