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Strategic Management 1 What is Strategy Free MBA course — Transcript

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0:00hi everybody and welcome to this MBA in
0:03marketing management
1:06okay as I said it is all about strategy
1:09so before I continue perhaps it'll just
1:12be worth you pausing for a minute stop
1:14the video and just think what do you
1:17already know about this area so on the
1:20area of policy and strategy why do you
1:22think business policy is important could
1:25you even maybe give it a definition
1:28okay so hopefully you've had a time to
1:31think about that and we can explore a
1:33little bit more about why it is so
1:34important
1:36so business policy and Strategic
1:39Management
1:40um have been discussed by various
1:42researchers and um there's a nice
1:44definition here that says that actually
1:46without a business policy and a strategy
1:48an organization has no Direction so it's
1:52a bit like an organization that's
1:54literally just going around in circles
1:56with no place to go
1:59um the business policy here is defined
2:01as the study of the function and
2:03responsibilities of Senior Management
2:05The crucial problems that affect success
2:07in the total Enterprise and really
2:10importantly the decisions that shape the
2:13directions of the organization and its
2:15future
2:17so what are the problems with business
2:20policy in the sense of is it very easy
2:23to define a business policy what do you
2:25think
2:26so the area of policy in business is a
2:30little bit like those of policy in
2:33public affairs in that actually it's to
2:36do with choice of purposes and molding
2:39the organizational identity and
2:41character
2:42and doing that and continually defining
2:46what needs to be done mobilizing
2:48resources in order for those things to
2:50be achieved so to achieve organizational
2:53goals and doing that in the face of
2:55competition or adverse circumstances
3:00so a core concept of strategy is all
3:03about understanding the competitive
3:05moves and business approaches that
3:07managers employ to attract and please
3:10customers compete successfully grow the
3:13business conduct operations and Achieve
3:16targeted objectives
3:18so you may have come across the word
3:20before strategy do you have any idea
3:22where it comes from where its Origins
3:24are from and what it actually means
3:27so to give you a little bit more of an
3:29understanding of that
3:31the military origins of strategy comes
3:34from the Greek word meaning generalship
3:36not quite sure how to pronounce that in
3:38Greek but maybe it's strategia or
3:41strategia or something like that so in
3:43military terms strategy often refers to
3:46maneuvering troops into position before
3:49the enemy is actually engaged so in this
3:52sense strategy refers to the deployment
3:55of troops
3:56and once the enemy has been engaged
3:58attention then shifts to tactics
4:01so here the employment of troops is
4:03really Central so this kind of military
4:06origins of strategy are centuries old
4:09and therefore it kind of seems sensible
4:11to start there when we analyze and
4:13understand what we mean by strategy and
4:16if we substitute resources for troops
4:19and the transfer of the concept of the
4:21business world then kind of begins to
4:23take shape and and begins to make more
4:25sense
4:27so we've seen what the military origins
4:30of the word strategy mean
4:32can you think of any problems with this
4:34definition what do you think and I think
4:37that may sort of come to mind is this an
4:39adequate definition to understand what
4:41strategy means
4:43so according to little heart who wrote a
4:47book about strategy
4:49he examines Wars and battles from the
4:51time of the ancient Greeks through to
4:53World War II
4:55and he concludes that the definition of
4:57strategy as the art of the employment of
5:00battles as a means to gain the object of
5:02war is actually not a very good
5:04definition and is actually quite flawed
5:07in the sense that strategy intrudes upon
5:11policy and makes battle the only means
5:14of achieving strategic ends
5:16so a wiser definition of strategy could
5:19actually be the Practical adaptation of
5:23the means placed at a general's disposal
5:25to the attainment of the object and
5:28unview
5:29so the military strategy therefore would
5:32kind of be a means to political ends
5:35and concluding his view of War's policy
5:39strategy and tactics little heart
5:42arrives at this very short definition of
5:44strategy
5:45and that is the strategy is the art of
5:48Distributing and applying military means
5:51to fulfill the ends of policy
5:55so
5:57according to George Steiner who's a
6:00professor of management and one of the
6:02founders of the California management
6:04review
6:05his book strategic planning is close to
6:08being a Bible on the subject
6:10and Steiner points out in his notes that
6:13there is very little agreement as to the
6:15meaning of strategy in the business
6:16world
6:18some of the definitions in use to which
6:21Steiner pointed include the following
6:23the strategy is that which top
6:25management does that is of great
6:27importance to the organization
6:29strategy refers to basic directional
6:32decisions that is to purposes and
6:35missions
6:36strategy consists of the important
6:38actions necessary to realize these
6:41directions
6:42and strategy answers the question what
6:45should the organization be doing and
6:47also what are the ends we seek and how
6:49should we seek them
6:52so how has business policy evolved so if
6:57we look at strategy and defining a
6:59concept of strategic management starting
7:02in 1965 Igor ansoff said that the Common
7:06Thread among the organization's
7:08activities and product markets that
7:10defines the essential nature of business
7:12that the organization was or plan to be
7:15in future
7:16so that's how he defines strategy and
7:20this idea of strategic management back
7:22in 1965.
7:24then if we move forward to 1972 William
7:27uh Gluck or glueck
7:31um defined it as a unified comprehensive
7:34and integrated plan designed to ensure
7:37that the basic objectives of the
7:39Enterprise are achieved
7:42then going through to 1980s to Henry
7:45minsberg he made it a little bit more
7:47simple by saying that it's a pattern in
7:49a stream of decisions and actions
7:52then fast forwarding through to 1996
7:54Michael E Porter talked about developing
7:58and communicating the company's unique
8:00position making trade-offs and forging
8:03fit among activities
8:06so then continuing this evolution of
8:09business policy as a discipline
8:12um Harvard Business School
8:14um back in sort of 1911 you uh talked
8:18about having an integrated course in
8:20management aimed at providing General
8:22management capability
8:24strategic management by Hoffa was a case
8:27book in policy and planning and the
8:29business policy Evolution has undergone
8:31four Paradigm shifts and this transition
8:34is of overlapping nature
8:36so the development of sub the subject of
8:38business policy has always followed the
8:40demands of real life business
8:45um and in 1930 through to 1960 in
8:51environment change new products
8:53continuously changing markets the Ford
8:56Foundation report recommended by Gordon
8:59and Hal suggested a Capstone course of
9:02business policy which would give
9:04students an opportunity to pull together
9:06what they have learned in the separate
9:07business fields and utilize this
9:10knowledge in the anal analysis of
9:11complex business problems
9:14and 1969 this course was made mandatory
9:17by the American assembly of Collegiate
9:19schools of business
9:22aacsb for short and in 1990 the course
9:25has become an integral part of
9:27management education curriculum
9:30so to give you a little bit of an
9:31understanding of how strategic
9:33management and business policy has
9:34evolved over the years
9:37and there are actually Four paradigms
9:39involved in this evolution of business
9:41policy
9:42so Paradigm one was ad hoc policy making
9:47so 1900 through to 1930 was an era of
9:51mass production in which maximizing
9:54output normally a single product
9:57standardized and low-cost products
9:59catering to Unique sets of customers
10:01servicing limited geographical areas
10:04informal control and coordination so the
10:08strategic planning was centered on
10:10maximizing input
10:12so that was Paradigm one
10:14then if we move to Paradigm 2 was a
10:17little bit more about integrated policy
10:19formation or formulation
10:22so from 1930 to 1940 with changes in
10:26technology there was more turbulence in
10:28the political environment emergence of
10:30new Industries and demand for novelty
10:32products even at higher costs with
10:35product differentiation Market
10:38segmentation and increasingly
10:39competitive and changing markets and
10:42these all made investment decisions
10:45increasingly difficult this was an era
10:48of integrating or functional areas and
10:50framing policies to guide managerial
10:52actions
10:54so they're moving forward to Paradigm
10:56three
10:57which was the concept of strategy so
11:00from 1940 to 1960 planned policy became
11:04irrelevant due to increasingly complex
11:06and accelerating changes
11:09firms had to anticipate environmental
11:11changes and a strategy needed to be
11:13formed with critical look at a basic
11:16concept of business and its relationship
11:19to the existing environment then
11:22and then moving to the last Paradigm
11:25Paradigm 4 all about strategic
11:27management was from sort of 1980 onwards
11:30and the focus of strategic management
11:32was very much on the Strategic process
11:34of business firms and responsibilities
11:36of General management so everything
11:39outside the four walls is changing
11:41rapidly and this phenomenon is called
11:45um discontinuity
11:47as it was called by Peter Drucker so
11:50past experiences are no longer a
11:52guarantee as science and technology
11:54technology is moving so much faster
11:57the future is no more extension of the
12:00past or the present
12:02so the world is substantially compressed
12:04and managing the external and internal
12:06environment becomes a really crucial
12:08function
12:09what to produce where to Market which
12:13new businesses to enter which one to
12:15quit and how to get there internally
12:17stronger and resourceful are the new
12:20Stakes at this stage
12:21so strategic planning is required to be
12:24done to endow the Enterprise with
12:27certain fundamental competencies and
12:30distinctive strengths which could take
12:32care of eventualities resulting from
12:34unexpected environmental changes
12:38so going back to Strategic Management as
12:41a core concept
12:44strategy in a nutshell or the core
12:47concept of strategic management or
12:49strategy is that a company strategy is
12:52as we said
12:53competitive moves and business
12:55approaches that managers employ to
12:58attract and please customers compete
13:01successfully grow the business conduct
13:03operations and Achieve targeted
13:05objectives
13:07so the definition by glueck is very much
13:11about this idea that strategy is Unified
13:14comprehensive and an integrated plan
13:16that relates to the Strategic advantages
13:19of the firm to the challenges of the
13:21environment and is designed to ensure
13:23that basic objectives of the Enterprise
13:25are achieved through proper
13:27implementation
13:29and another definition is that strategy
13:32is the organization's pattern of
13:34response to its environment over a
13:37period of time to achieve its goals its
13:40objectives and its mission
13:43so what types of actions are involved in
13:47strategy and what is the essence of
13:48strategy so strategy includes the
13:51determination and evaluation of
13:53alternative paths to an esta already
13:56established Mission and objectives of
13:58the Enterprise and therefore then
14:01choosing the alternative to be adapted
14:04so four important aspects of strategy
14:06are long-term objectives which emphasize
14:10the long-term growth and development and
14:12these give direction for implementing
14:14strategy
14:16something else which is very important
14:17another really important aspect of
14:19strategy is competitive advantages so
14:21understanding and scanning the external
14:23environment so monitoring it and making
14:26sure therefore that strategy is made to
14:29have a firm uh or that is made to have
14:32the firm a continuous competitive
14:34advantage
14:35Vector is a Direction with Force so
14:39therefore a series of actions are to be
14:40taken and they should have the same
14:42direction for the whole organization and
14:45another really important aspect is about
14:46Synergy so once these decisions are
14:50taken to accomplish the objectives in
14:52the same direction there will be Synergy
14:54and Synergy can happen due to
14:56competitive advantage and growth vector
14:59and the objectives need to be measurable
15:01and could be for example return on
15:03investment sales growth rate
15:06so what type of actions are involved in
15:09strategy so three types of actions are
15:12involved in strategy so we've got here
15:14the determination of long-term goals and
15:16objectives adoption of courses of action
15:20allocating resources and strategy
15:23therefore is this creation of unique and
15:26valued position involving a different
15:28set of activities so the company that is
15:31strategically positioned performs
15:34different activities from rivals or
15:36performs similar activities in different
15:39ways
15:40so you might want to think about
15:41organizations that you've come across
15:43where they have created their own
15:45strategy which is unique and very
15:47different from perhaps one that they've
15:49used before
15:51um and what do we know so we know that
15:54the nature of strategy is a major course
15:56of action through which organization
15:58relates itself to its external
16:01environment
16:02but it is a blend of internal and
16:04external factors
16:06so face opportunities and threats
16:08provided by external factors and then
16:11internal factors a match with them
16:17the nature of strategy is to be
16:20understood in the sense that strategic
16:22actions are going to be different for
16:24different situations so strategy is a
16:27combination of actions to solve a
16:29certain problem to achieve a desirable
16:31end
16:32it may involve contradictory actions
16:34simultaneously or with a gap of time
16:37like closing down some operations and
16:39expanding others at the same time
16:42so strategy is always future oriented
16:45new situations would have not which have
16:47not Arisen in the past will require
16:49revised strategic actions
16:52the strategy requires some systems and
16:54norms for its efficient adoption in any
16:57organization
16:58it provides the overall framework for
17:01guiding Enterprise thinking and action
17:04so what is the difference
17:07strategy and policies
17:09so we spoke a little at the beginning
17:11about management policy business policy
17:14and the challenges around that how can
17:17we Define the difference between what
17:19strategy is and what policies are so you
17:22might want to stop the video now for a
17:23few minutes and just pause to think
17:25about that
17:27so when we look at strategies versus
17:29policies we need to make sure that we
17:32distinguish the fact that strategy and
17:34policy are not synonymous
17:36so policy is a guideline for decisions
17:38and actions to be taken by subordinates
17:41for the Fulfillment of the set of
17:42objectives
17:44policies are commonly accepted as
17:48um or accepted understanding of decision
17:50making and they are thought oriented and
17:53they have to be integrated that so that
17:56strategy is implemented successfully and
17:58effectively
17:59so strategy and policies are both the
18:03means directed towards meeting the
18:05organizational objectives
18:07strategies are concerned with the
18:09direction in which human and physical
18:11resources are deployed to maximize the
18:14chances of achieving organizational
18:16objectives in the face of a very
18:18variable environment
18:20so
18:21strategies are specific actions
18:24suggested to achieve objectives
18:26strategies rather than policies which
18:29are thought oriented strategies are
18:31action oriented and empowers
18:34um and empowers
18:36um the people concerned who are going to
18:39implement them
18:40strategies cannot be delegated downwards
18:43and strategy is a is rule for making
18:46decision and policy is contingent
18:49decision
18:50so that's quite important to remember
18:52that there is a clear difference between
18:53what we mean regarding what strategies
18:56actually you're concerned with and how
18:58strategies and policies are actually
18:59quite different in distinct areas
19:03and here we can see an example of what
19:07happens with policy standards guidelines
19:10processes and procedures that you have
19:13some kind of Charter which can be
19:16lifetime for example or it could be 10
19:18years approved by the CEO and that
19:21involves interpretation and it's
19:23mandatory
19:24that then is then filtered down into
19:27policy so the policy could have a
19:28lifetime of five years which would also
19:30be approved by the CEO and need to be
19:33mandatory and then that policy is split
19:36up into two separate areas so it's split
19:39up into standards which can be perhaps
19:42for two to three year two to three years
19:44in duration duration and normally
19:46approved by the CIO and once again their
19:50interpretation is mandatory
19:53and it's also split up into guidelines
19:55so these once again are around two to
19:59three years in duration duration
20:00approved by the CEO CIO sorry and their
20:04interpretation though for however is
20:07discretionary
20:08so this is showing how we can start with
20:12the charter we then need to then Cascade
20:14down into a policy standards and
20:15guidelines which I suppose we could say
20:18in terms of purpose are the functional
20:20requirements so what characteristics
20:23will the solution have
20:25the policy is more related to the
20:27business requirements and the charter is
20:29more to do with the mandate
20:31so if we then filter right down to the
20:33bottom of the pyramid
20:34once we've got our standards and our
20:36guidelines these are then broken down
20:38into processes and procedures so that
20:41could have a lifetime of anything from
20:44maybe half a year to three years it's
20:46normally approved by middle management
20:48and its interpretation is mandatory so
20:51we could call this if you like the
20:53recipe so what steps do we take for this
20:56to take place and for this Charter to
20:58happen
20:59it started off from from being mandatory
21:03um over a much longer period which is
21:05the Mandate and the volume is much less
21:09to then when we go filter down into
21:11standards and guidelines and processes
21:13and procedures we're talking about a lot
21:15here we're talking about the recipes and
21:17the steps that we need to take to make
21:19that Charter happen
21:21so when we talk about strategy we need
21:25to understand too that strategy is
21:26different from tactics
21:28so strategy determines the major plans
21:31to be undertaken a goal of a strategy is
21:34to gain competitive Advantage break the
21:36opponent
21:37strategic decisions cannot be delegated
21:40downwards
21:41strategy formulation is dynamic so it's
21:44constantly changing responding to the
21:46environment and it can be continuous or
21:49it can be irregular
21:50strategy has a long-term perspective and
21:54has a high element of uncertainty
21:56because of course the best laid plans we
21:58don't really know if they're actually
21:59going to take place because of what's
22:01going on in the external environment
22:03and strategy formulation is affected by
22:07the personal values of the person
22:08involved in the process
22:10so how does that differ into tactics
22:12then so tactics is more the means by
22:16which previously determined plans are
22:18executed
22:19the goal of tactics is to achieve
22:22success in a given Direction
22:24so tactical decisions can be delegated
22:27to all levels of the organization and
22:30tactics are determined on a periodic
22:31basis with some fixed timetable
22:35tactical decisions are more certain as
22:38they work upon the framework set by the
22:40strategy
22:41tactical decision implementation is
22:44impersonal and tactical decisions are
22:47less important than strategic decisions
22:50so we've talked about the difference
22:52between strategy and policies we've
22:54talked about now the difference between
22:55strategic strategy and tactics
22:58so to have a think for a little bit what
23:00do we mean therefore by Strategic
23:01Management see if you can just think
23:03okay so how do we put this all together
23:06so strategic management is defined as
23:10the process of analyzing various
23:13opportunities and threats vis-a-vis
23:15organizational strengths and weaknesses
23:18formulating and arriving at strategic
23:21choices through critical evaluation of
23:23Alternatives and implementing them to
23:26meet the set of objectives of the
23:27organization
23:29so a more simple objective
23:31or sorry a more simple definition is
23:34that strategic management is concerned
23:36with making decisions about an
23:37organization's future Direction and
23:40implementing those decisions
23:43and what are the tasks then so we know
23:45this is what strategic management is and
23:47what are the tasks of strategic
23:49management have a think about that for a
23:51second maybe pause the video before we
23:53continue
23:55so there are five tasks of strategic
23:58management the first task is all about
24:01forming or formulating a strategic
24:03vision of what the company's future
24:05business makeup will be on where the
24:08organization is headed so a long-term
24:10Vision to infuse the organization with a
24:13sense of purposeful action
24:16another really important task of
24:18strategic management is setting
24:19objectives so converting strategic
24:22Vision into specific measurable
24:24performance outcomes
24:26then another really important part of
24:28strategic management is crafting a
24:30strategy to achieve those desired
24:32outcomes
24:33we then of course need to implement and
24:35execute it efficiently and effectively
24:37as possible and once that's taken place
24:40at the end of the process there needs to
24:42be some evaluation looking at the
24:44performance and initiating corrective
24:46adjustment in Vision long-term
24:49directions objectives and strategy in
24:52light of actual experience so changing
24:54conditions new ideas and new
24:56opportunities
24:59so who performs these five tasks of
25:01strategic management well as we saw in
25:04the pyramid earlier the CEO is extremely
25:07important in this process so he or she
25:10is actually the most important strategy
25:12manager who is also most visible and he
25:16or she performs various roles such as
25:18Chief Direction Setter Chief objective
25:22Setter Chief strategy maker Chief
25:25strategy implementer
25:27the vice presidents of various functions
25:30have roles to play in strategy making
25:32and implementing two
25:34so functional heads like production
25:36marketing Finance HR Etc have
25:40responsibilities to deliver measurable
25:42performance as per strategic planning
25:45and all make major organizational units
25:48so business units divisions staff plants
25:52support groups district offices have
25:56leading and supporting roles in the
25:59company's strategic game plan
26:01so those are the the main players who
26:04are crucial in actually undertaking and
26:06being involved in the in the tasks of of
26:09creating a strategic management
26:11Workforce
26:15the CEO and Senior
26:17senior corporate Executives have
26:19responsibility and personal Authority
26:21for major strategic decisions
26:23the managers work with profit and loss
26:26responsibilities for individual business
26:28units or functions
26:30functional heads and departments and
26:32departmental heads have direct
26:34responsibility over major business areas
26:37and managers of operating plants
26:40um for them strategy making is a job for
26:43all the line managers so doers should be
26:46strategy makers it should not be left to
26:49staff
26:50of planners strategic planning is not a
26:53standalone function it's an integrated
26:55team effort
26:56so these are the people who are involved
26:59involved in strategic planning what is
27:01involved in strategic planning so
27:04aspects of strategic planning which are
27:06really important to be aware of
27:08are the fact that strategic planning
27:10provides the route map for the
27:12Enterprise so it lends a framework which
27:15can ensure that decisions concerning the
27:18future are taken in a systematic and
27:20purposeful way
27:22so strategic planning provides a hedge
27:25against uncertainty and against totally
27:28unexpected developments
27:30so strategic planning helps in
27:31understanding Trends in a better way and
27:33generates a reference frame for
27:35investment decisions
27:37it provides the framework for all major
27:39business decisions decisions on
27:41businesses products markets
27:43manufacturing facilities Investments and
27:46organizational structure
27:48it's a Pathfinder for business
27:50opportunities and it is also a defense
27:53mechanism to avoid costly mistakes in
27:56the choice of product Market or
27:58Investments
28:00the more intense the environmental
28:02uncertainty is the more critical it is
28:06to have a strategic planning process so
28:09the success of the efforts and
28:10activities of the Enterprise depends
28:12heavily on the quality of strategic
28:14planning
28:15considerable thought and effort must go
28:18into the vision the Insight the
28:20experience the quality of judgment and
28:22the Perfection of methods and measures
28:25strategic planning is a management task
28:27concerned with growth and a future of
28:29the business Enterprise
28:33another area to be aware of is that
28:36strategic planning utilizes a little bit
28:39of intuition as well as logic so the
28:42logic is through planning and in the
28:43information process and intuition is
28:46through experience knowledge and vision
28:48of the top people in in management
28:51so all vital aspects of corporate
28:53governments governance are perfect
28:56perfected through strategic planning
28:58starting from the corporate Mission
29:00philosophy and core values down to the
29:03choice of businesses and strategies
29:06so through analytical process or through
29:10that the analytical process aspect
29:12involved in strategic planning
29:14corporations understand where it's
29:17called their their core competencies are
29:20they're therefore able to identify their
29:23competitive advantages and then do a
29:25little bit of a gap analysis to point
29:28pinpoint where are the gaps and
29:30formulate steps to bridge them
29:33so when we're talking about strategic
29:35planning it's really important to think
29:37about future the growth environment
29:42um a kind of a basket of businesses of
29:44the firm for additions and deletions
29:46strategy and
29:49um and kind of not day-to-day routine
29:51matters but the creation of core
29:53competencies and competitiveness and and
29:56finally putting that all together and so
29:58integrating it all
29:59so strategic planning views the
30:02organization and business in its
30:04totality and not a particular function
30:06thus strategy strategic planning is
30:09Corporate strategy
30:11strategic planning differs from other
30:13operative and administrative functions
30:15of management
30:16strategic planning provides objective
30:19strategy design so it looks at growth
30:22objective to Performance levels
30:24profitability targets it then looks at
30:27the product Market scope and how it's
30:29going to penetrate the market
30:31it looks at growth Vector product Market
30:33posture and development or
30:36diversification
30:38it looks at its competitive advantages
30:41creating Synergy and strength obtained
30:44from new product market selections
30:46so it um yeah it's broken down into
30:50those uh five areas
30:53um and yeah and difference from other
30:54operative and administrative functions
30:56of management
31:00um Henry mintzberg who's an academic
31:02author and researcher
31:06um who's pictured here in this in this
31:08in this slide
31:10um wrote a book with Bruce alstrand and
31:13Joseph Campbell called strategy bites
31:16back and in that he presented five PS as
31:20a way to define strategy
31:22and each P shines a spotlight on what
31:26strategy is and means and encompasses it
31:29from a different angle to provide a
31:32really comprehensive overview that's
31:33probably more useful than definitions
31:36that try to fit it all into a couple of
31:38sentences
31:40so minceberg's five PS of strategies are
31:44related to the fact that these five PS
31:47adjusted where necessary to fit into
31:50Professional Services or industrial
31:52firms are as follows
31:55so strategy is a plan so P for plan to
31:58almost anyone you care to ask strategy
32:01is a plan it's got to have some sort of
32:04consciously intended course of action
32:06some sort of guideline or set of
32:08guidelines to deal with the situation
32:11a child has a strategy to get over a
32:14fence a firm has one to dominate a
32:16market for a particular service or
32:18practice area so by this definition
32:21strategies have two essential
32:23characteristics they are developed
32:25consciously and their developed
32:27purposefully
32:29strategy is also a ploy so really what
32:34we mean by that it's a specific maneuver
32:36intended to outwit an opponent or
32:39competitor
32:40so the kid may use the fence as a ploy
32:43to draw a bully into his yard where his
32:46Doberman Pinscher awaits Intruders so
32:51likewise a firm May threaten to
32:53establish a new practice area in order
32:55to discourage a competitor from trying
32:57to do the same
32:59so here the real strategy
33:01as planned that is the real intention is
33:04the threat not the new practice area
33:07itself and as such is a ploy threatened
33:10litigation often falls into this
33:12category
33:13so the third p in minsberg's definition
33:16of strategy involves patterns
33:19so strategy whether as generals plans or
33:22specific ploys is pointless if it cannot
33:25be realized so in other words defining
33:28strategy as a plan or a ploy is not
33:31sufficient we also need a definition
33:33that encompasses the resulting Behavior
33:36their strategy is also a pattern and
33:39it's a pattern in a stream of actions so
33:42by this definition strategy is
33:44consistent in Behavior whether or not
33:46intended so the outcome of strategy does
33:49not derive from the design or plan but
33:52from the action that is taken as a
33:54result
33:56the strategy is also about position so
33:59specifically as a means of locating a
34:02firm in its environment so in ecological
34:05term strategy becomes that firm's niche
34:08in management terms a domain consisting
34:11of a particular combination of services
34:13clients and markets so position is often
34:16defined competitively literally so in
34:19the military where it becomes the site
34:21of a battle
34:22then the last part of strategy according
34:24to minsberg's five PS is that strategy
34:28is a perspective
34:30so while position is outwardly focused
34:33perspective looks inward into the firm
34:36even into the heads of the actual
34:38strategists themselves so strategy in
34:41terms of this definition becomes an
34:43ingrained Way of perceiving the World
34:45some firms are aggressive Pace Setters
34:48others build protective shells around
34:51themselves almost every profession has
34:54about it in its unique perspectives the
34:57indelibly flavor the strategies that
35:00firms practicing those professions craft
35:03for themselves
35:04so a law firm's view of their business
35:06is fundamentally different to that of an
35:09accounting firm and an engineering firm
35:11or a graphic design studio yet all are
35:14staffed by professionals
35:17so to put that in in um well just kind
35:21of put that in a simple terms and and
35:22then integrate the five PS together
35:26the plan then provides the road map by
35:29which the firm intends to achieve its
35:31goals ploys add a dimension of maneuver
35:35where one firm's gain is another's loss
35:38and competitive Advantage is crucial
35:41patterns emphasize that strategy is not
35:44a once off event but a constant stream
35:46of decisions and results and actions
35:48that drive the firm forward over time
35:51towards its goals
35:53position ads that different firms have
35:55different mixes of markets clients and
35:58services that they provide to those
36:00clients
36:01and finally perspective provides an
36:04insight into how the firm and its
36:06strategists are informed by their own
36:08profession their perceptions of business
36:11and the unique characteristics of each
36:14firm's own world
36:17so strategy it's a simple and undeniably
36:22relevant matter for managers to
36:23periodically ask themselves some
36:25questions of the employees reporting to
36:28them
36:29so questions such as what have you done
36:32to improve customer service what have
36:34you done to improve customer
36:35satisfaction
36:37what have you done to reduce costs what
36:40have you done to increase productivity
36:42and what have you done to increase
36:43revenues from new products and services
36:46so these are some fundamental questions
36:49and regardless of the definition of
36:51strategy all the many factors affecting
36:54the choice of corporate or competitive
36:56strategy
36:58there are some fundamental questions to
37:00be asked and answered and then these
37:03also include the following
37:05foreign

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