Viable Business Strategy

Viable Business Strategies

Chapter 1 - The philosophy of strategy

Historical roots of strategy

• Rooted in military history – main objective of winning the war

• The art of strategy is also known as the art of the “calculated risk”

• At first military strategy served as the model for corporate strategy, nowadays corporate strategy is the model for military strategy

• Strategy is indispensable to direct enterprises

Evolution of strategy

• Rise of political institutions led to use of different tools in strategy, besides military, e.g. trade, economics, religious dogma

• Modernist era:

o From 1900’s strategy and management merged

o Recipe-driven search for successful business strategies

o Basic premise: there is one correct answer for an enterprise’s problems

• Postmodernism:

o More complexity introduced (more staff, knowledge workers)

o Moving from manufacturing economy to service and information, i.e. economy based on theory as mechanism for change

o Multiple truths due to rate of change and complexity – no single right answer

o Strategy is now driven with a futuristic perspective; success determined by ability to mobilise according to strategy and executing with intent and speed

o Latest models for business strategy are based on biological thinking – strategic thinking is continuously evolving

Views on corporate strategy

Influences in shaping corporate strategy:

• SWOT view of strategy – what business are capable of vs. what they could do

• Competitive positioning – focusing on the industry and factors outside the business (known as a positioning approach)

• Competencies and capabilities – focus mainly on resources internal to the organisation (known as a resource-based approach)

• Emergent thinking around strategy as a learning process, focusing not only on the content, but also...