Managing the Strategy Making Process

Welcome to Global Strategy
and Sustainability
Strategic Leadership – Managing the
Strategy Making Process

Today’s Agenda
Review of Module Outline and Assessment Brief
What is meant by competitive advantage?
• Group Activity: UBER
BREAK
Primary steps in a strategic planning process and the key players in
the process
• Group Activity: Circus du Soleil
Handling strategic planning pitfalls
The role strategic leaders play in the planning process
• Individual Activity: Becoming A Strategic Leader
• Review of Apply Activity
• Recap, Q&A, Discussion
• Next steps

Today’s Learning Outcomes
Develop an understanding of what is meant by
competitive advantage
Recognise the primary steps in a strategic planning
process and the key players in the process
Critically evaluate the common pitfalls of planning and be
able to assess how these can be avoided
Appreciate and evaluate the role strategic leaders play in
the planning process

1) What is meant by competitive advantage?
What is strategy?
• All successful business strategies share four stand-out common factors:
What are the different levels of strategy?
Wit, Bob D. Strategy, 7th
Edition, Cengage Learning
EMEA, 2020. VitalSource
Bookshelf Online
Competitive advantage and
business strategy

What is the ultimate outcome of a business level
strategy?
“Competitive advantages are factors that allow a company to
produce goods or services better or more cheaply than its
rivals. These factors allow the productive entity to generate
more sales or superior margins compared to its market rivals.”
To develop competitive advantages for the organisation
Investopedia.com
when competitors are unable to duplicate the benefits in the longterm, then the firm has a sustained competitive advantage.
Competitive advantage: internal sources
• Speed of delivery
• Speed to market
• Price
• Technology
• Design
• Scale
• Customer service
• Personalization
• Intellectual property and trademarks
• Experience
Competitive advantages Business model
Source: Cremades A. 2018. Forbes.com
Types of competitive advantage
Competitive
advantage
Cost
advantage
Differentiation
advantage
Higher rate of
profit over rivals
Achieve
Similar
offering at
lower cost
Premium price
from unique
offering

Competitive advantages and strategic position
Broad differentiation
strategy
Overall low cost
leadership strategy
Focused
differentiation
strategy
Focused
low cost
strategy
Differentiation
Industry wide
market
Type of competitive advantage
Low cost
Narrow segment of
the market
Target market:
strategy scope
Porter’s generic competitive strategies
Lower cost strategies
• Economies of scale
• Economies of knowledge
• Process technology
• Product design
• Input costs
• Capacity utilisation

Differentiate strategies
• Superior product quality
• Branding
• Product features
• Technology
• Design
• Knowledge
• Customer service

“Stuck in the middle” strategies
Broad differentiation
strategy
Overall low cost
leadership strategy
Focused
differentiation
strategy
Focused
low cost
strategy
Differentiation
Industry
wide
market
Type of competitive advantage
Low cost
Narrow
segment
of the
market
Target market:
strategy scope
Low cost
advantages
Differentiation
advantages
Stuck in
the
middle
Companies with no absolute cost or differentiation leadership
Hybrid strategies: pursuing differentiation
and low-cost leadership simultaneously
• Low cost:
• Low warehouse cost (DIY)
• Low retail cost (big showrooms outside cities)
• Low production cost (China & Malaysia)
• Economies of scale (large volume)
• Differentiation:
• Modern design
• Good quality and reliable
• Localise product range
• Very targeted market
Good quality + stylish design + low price
Group Activity
Uber: Competitive advantage analysis
This Photo by Unknown Author is licensed under CC BY-ND
Break Time – 15 minutes
2. Primary steps and key players in the strategic
planning process

Strategy process: intended versus realised
Source: Mintzberg and et al. (1987)
Strategic
planning
Agile strategy

Strategic planning process: main steps

Existing Business
Model
Mission,
Vision, Values,
and Goals
External
Analysis:
Opportunities
and Threats
SWOT –
Strategic Choice
Strategies:
Functional,
Business,
Global, and
Corporate
Level
Governance
and Ethics
Design and
Implement
Organisation
Structure
Design and
Implement
Organisation
Culture
Design and
Implement
Organisation
Controls
Internal Analysis:
Strengths and
Weaknesses

Hill, C, et al, (2016), Strategic Management, Cengage Learning, 11th ed, Andover, Hampshire
Strategic planning process: why/where to use
Direction
Give a sense of organisational direction
Long-term commitment
Enable early commitment to a course of action
Coordination
Help to coordinate strategic initiatives into a
single cohesive pattern.
Allocation
Facilitate optimal resource allocation.
Plan
Promote programming in advance of
organisational activities.
Large organisations
Stable market/environment
Top-down structures

Agile strategy
Source: adapted from McKinsey
https://www.mckinsey.de/publikationen/leading-in-a-disruptive-world/the-five-trademarks-ofagile-organizations
• An iterative process
• which identifies key issues facing the
business
• focuses on short sprints to formulate
plans and achieve outcomes
Agile strategy formation requires
agile organisations
Five trademarks of agile organisations
Strategy
Boxes and lines less important,
focus on action
Structure
Network of empowered teams
Process
Rapid decisions and learning cycles
People
Dynamic people model that
ignites passion
Technology
Next generation enabling
technology

Agile Strategic formation: why/where to use
Change
constant re-evaluation of strategic plans
Innovation
Promote innovation
Opportunism
alert to new technologies, can promote disruptive
patterns
Budget
budgeting is flexible
Small/entrepreneur organisations
Rapid change market/environment
companies that are growing
quickly

This Photo by Unknown Author is licensed under CC BY-SA
Strategy formation: Balanced Scorecard (BSC)
BSC translates mission and
strategy into tangible
objectives and measures.
external
measures for
shareholder
and customer
Internal measures
for critical business
processes,
innovation, and
learning and growth

Strategy formation: Balanced Scorecard (BSC)
This Photo by Unknown Author is licensed under CC BY-SA
A Strategy Map is a
visual representation
of the cause-andeffect relationships
amongst the
components of an
organisation’s
strategy.

Strategy formation: Blue Ocean Strategy
This Photo by Unknown Author
is licensed under
CC BY
Blue Ocean strategy is the simultaneous pursuit of differentiation and low cost to open
up a new market space and create new demand.

Strategy formation: Blue Ocean four actions grid
This Photo by Unknown Author is licensed under CC BY-SA-NC
Group Activity
Cirque du Soleil: Competitive advantage based on innovation
This Photo by Unknown Author is licensed under CC BY-SA
3. Handling common pitfalls of planning
This Photo by Unknown Author is licensed under CC BY-NC-ND
Lack of flexibility pitfall
The planning process and the
associated tools cannot keep
up with the pace of change in
the business environment.
The resulting strategic plan
may be too inflexible for
today’s pace of change.
Source: Gerry J. and Scholes K. Exploring Corporate Strategy 1997
Strategic drift
The gradual deterioration of competitive action that
results in the failure to respond to changes in the
business environment.

More planning pitfalls …
• Lack of ownership of the strategy across the
organisation
• An intellectual exercise removed from the
reality of operations
• strategy can becomes thought of as the plan,
not a log-term direction
• become too obsessed with the research for a
definitely “right” strategy
This Photo by Unknown Author is
licensed under
CC BY-SA-NC
4.The role strategic leaders play in the planning
process
This Photo by Unknown Author is licensed under CC BY-SA-NC
Strategic leaders: roles of top management
Envisioning future strategy
clear and compelling vision of the future
communicate clearly both internally and to external
stakeholders.
Aligning the organisation to deliver that strategy
ensure that people are committed to the strategy,
motivated to make the changes needed
empowered to deliver those changes.
Embodying change
A strategic leader will be seen by others as intimately
associated with a future strategy and a strategic change
programme.

Strategic leaders: roles of middle managers
Advisers
they are often the closest to indications of market or
technological changes
communicate clearly both internally and to external
stakeholders.
‘Sense making’ of strategy
explain and make sense of strategy in specific contexts
(e.g., a region of a multinational or a functional
department).
Local leadership of change
aligning and embody change, as do top management,
but at a local level.
This Photo by Unknown Author is
licensed under
CC BY-NC-ND
Changing roles for strategising managers
Managers nowadays need to become “creators of environments” that will
allow their companies to achieve Competitive Advantage.
Modern strategy planning needs flexible leadership with emotional
intelligence. Leaders must be recast as social-systems architects who
enable innovation and collaboration.
Activity 3: Individual
Review of Apply
Activity

Apply Activity Instructions
Assessment:
• For your assignment you will act in the role of a Management Consultant where you are required to develop
a consultancy report and a PowerPoint presentation for the CEO of Tesla (case study provided) by using the
techniques and concepts you have covered in the module.
• The report comprises of 4 tasks based on the Module Topics studied each week and from you will draft on a
weekly basis. The PowerPoint presentation will comprise of the Topic – Strategic Purpose – Sustainability
and Corporate Performance.
• To help you get started, it is suggested that you conduct some preliminary research into the global car
industry with particular focus on electric vehicles (EV).
Discussion Forum (100 words)
Apply the learning from watching/reading the learning materials on the HUB by engaging with these questions
and answering and discussing them within the discussion forum.
Answer the following questions in the discussion forum
• Provide an example of a company using one of Porter’s competitive strategies. Identify the strategy and
explain why you think they are using it. (max 50 words)
• Conduct some research and find an example of a company who is using an alternative approach to
strategy such as emergent, Blue Ocean or Balanced Scorecard (max 50 words)

Recap, Q&A,
Discussion

Key Takeaways
You should be now be able to:
• Have confidence with the Module structure
• Understand what competitive advantage is
• Understand some of the main approaches to
strategy formation
• Understand some of the key roles managers
have in the strategic planning
• Understand main pitfalls in strategic planning

Next Steps
• Review this topic
• Go through the Module Overview and Introduction (if not
done yet)
• Go through the Preparation and Apply part of this week (if
not done yet)
• Go through the Consolidation part of this week
• Go through the Preparation and Apply part of next week
• Conduct your preliminary review of the car industry with a
focus on electric cars (EV)
• See you next week same time!