Chapter 1: the concept of strategy • Strategy is about winning (rate of return above cost of capital). A unifying theme that gives coherence and direction to the actions and decisions of individual or organization. The essence of strategy is making choices Simple, consistent, long term goals Profound understanding of the competitive environment Objective appraisal of resources Effective implementation Successful strategy Internal analysis •Goals and values •Resources and capabilities •Structure and systems External analysis •Competitors •Customers •Suppliers • Military parallel: Sun Tzu (500BC: “the highest form of victory is when the enemy give up”) and Greek στρατηγός (general); offensive/defensive, frontal/outflank, graduated/aggressive, surprise, deception, envelopment, escalation, attrition • Characteristics of strategic decision: important, involves significant resources and is not easily reversible. • Contingency theory: best way to design, manage, and lead an organization depends on its environment • Brief history: from strategy (financial/corporate) planning to strategy management and positioning (50s-70s); from external sources of profit to internal resources in the quest for competitive advantage (70s-80s); from irrational exuberance (new economy) to managing uncertainty, globalization, Corporate Social Responsibility (90s-today). Today: creating options of the future & seeking the “blue oceans” of uncontested market space • Where to compete (corporate strategy), how to compete (business or competitive strategy) • Formulation: vision, mission, business models, strategic plans • Intended vs. realized vs. emergent strategy: design school vs. emergence/learning school • Strategy roles: decision support, coordinating device, target • Analytic techniques = frameworks to help identifying, classifying and understanding the principal factors relevant to strategic decisions… i.o.w.: reducing complexity! Main testimonials: Queen Elizabeth II, Lady Gaga, US Steel, McDonald’s and Nokia, US State Department