Notes

WEEK 14

The functional structure divides responsibilities according to the organisation’s primary specialist roles such as production, research and sales.
The multidivisional structure is built up of separate divisions on the basis of products, services or geographical areas.
The matrix structure combines different structural dimensions simultaneously, for example product divisions and geographical territories or product divisions and functional specialisms
Planning systems plan and control the allocation of resources and monitor their utilisation.
Performance targets focus on the outputs of an organisation (or its parts) such as product quality, revenues or profits.
Balanced scorecards set performance targets according to a range of perspectives, not only financial.
Cultural systems aim to standardise norms of behaviour within an organisation in line with particular objectives.
Configurations are the set of organisational design elements that interlink together in order to support the intended strategy.
Situational leadership – successful strategic leaders are able to adjust their style of leadership to the context they face.
Summary
• There are many structural types (e.g. functional, divisional, matrix). Each type has its own strengths and weaknesses.
• There is a range of different organisational systems to facilitate and control strategy.
• The structure and systems of organisations should contribute to a coherent organisational configuration summarised in the McKinsey 7-S framework.
• Translating intended strategy into strategy in action requires the leadership of strategic change. This may take different forms such as incremental change, reconstruction (or turnaround), revolutionary and evolutuionary change.
WEEK 13
Organic development is where a strategy is pursued by building on and developing an organisation’s own capabilities. This is essentially the ‘do it yourself’ method.
Corporate entrepreneurship refers to radical change in the organisation’s business, driven principally by the organisation’s own capabilities.
A merger is the combination of two previously separate organisations, typically as more or less equal partners.
An acquisition involves one firm taking over the ownership (‘equity’) of another, hence the alternative term ‘takeover’.
A strategic alliance is where two or more organisations share resources and activities to pursue a strategy.
Collective strategy is about how the whole network of alliances of which an organisation is a member competes against rival networks of alliances.
Collaborative advantage is about managing alliances better than competitors.

Summary

There are three broad methods for pursuing strategy: mergers and acquisitions, strategic alliances and organic development.
Organic development can be either continuous or radical. Radical organic development is termed corporate entrepreneurship.
Acquisitions can be hostile or friendly. Motives for mergers and acquisitions can be strategic, financial or managerial.

The acquisition process includes target choice, valuation and integration.
Strategic alliances can be equity or non-equity. Key motives for strategic alliances include scale, access, complementarity and collusion.
The strategic alliance process relies on co-evolution and trust.

WEEK 12

Invention involves the conversion of new knowledge into a new product, process or service.
Innovation involves the conversion of new knowledge into a new product, process or service and the putting of this new product, process or service into actual use.

A business model describes how an organisation manages incomes and costs through the structural arrangement of its activities.
Diffusion is the process by which innovations spread amongst users.
Disruptive innovation creates substantial growth by offering a new performance trajectory that, even if initially inferior to the performance of existing technologies, has the potential to become markedly superior.
Summary
• Strategists face four fundamental dilemmas in innovation: the relative emphasis to put on technology push or market pull; whether to focus on product or process innovation; how much to rely on ‘open innovation’ and finally how far to concentrate on technological innovation as opposed to broader business-model innovation.
• Innovations often diffuse into the marketplace according to an S-curve model in which slow start-up is followed by accelerating growth (the tipping point) and finally a flattening of demand. Managers should watch out for ‘tripping points’.
• Managers must choose between being first into the marketplace and entering later. Innovators can capture first-mover advantages. However, ‘fast second’ strategies are often more attractive.
• Established incumbents’ businesses should beware disruptive innovations. Incumbents can stave off inertia by developing portfolios of real options and by organising autonomous new venture units.

WEEK 11
PESTEL provides a comprehensive list of influences on the possible success or failure of particular strategies.
Porter’s five forces framework helps identify the attractiveness of an industry in terms of five competitive forces:
• the threat of entry,
• the threat of substitutes,
• the bargaining power of buyers,
• the bargaining power of suppliers and
• the extent of rivalry between competitors.

Identifies firm’s major competitors and their strengths & weaknesses in relation to a sample firm’s strategic positions.
The value chain describes the categories of activities within an organisation which, together, create a product or service.
Financial Ratio Analysis

Liquidity ratios provide information about a firm's ability to meet its short-term financial obligations.

WEEK 10

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WEEK 9

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