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Strategy and Structure Cheat Sheet by

University intro to business strategy and structure

What is business

what business an organi­sation wants to be and how it is going to get there
taking decisions which allow an organi­sation to achieve a sustai­nable compet­itive advantage over the long term (Henry, 2021)

Strategy formul­ation (emergent)

strategy formul­ation emergent is the process of using available knowledge to document the intended direction of a business
the Ration­alist School (Kenneth Andrews and Igor Ansoff)
an organi­sation needs to match its strengths and weaknesses which derive from its resources and compet­encies with the needs of its business enviro­nment; formal, systematic approach; achieved using tools such as SWOT
the Learning School
successful businesses pursue strategies that are opport­unistic and adaptive; Mintzberg and Waters suggest 3 approaches to strategy: intended, realis­ed,­eme­rgent; “Strategy comes about as a result of a process of learning” (Henry); strategic drift

YIP's global drivers

internal businesses trade in one or more countries
global businesses complete across the globe set up subsid­iaries across the globe
George Yip’s framework helps a business determine which parts of an industry can be considered global or not, enabling managers to be able to determine a global strategy by reviewing four key global drivers:
market drivers (who are customers, what are implic­ati­ons); cost drivers (economies of scale + economies of scope); government drivers; compet­itive drivers

Porter's 5 forces

powerful tool used to analyse the compet­iti­veness of an industry
helps businesses determine the profit­ability of the industry and main factors that can impact upon it
once businesses understand this, they are then able to determine strategies to improve profit­ability
threat of new entrants
if new entrants move into an industry they will gain market share and rivalry will intensify; the position of existing firms is stronger if there are barriers to entering the market; if barriers to entry are low then the threat of new entrants will be high, and vice versa
bargaining power of suppliers
if the supplier forces up the price paid for inputs, profits will be reduced
bargaining power of customers
powerful customers are able to exert pressure to drive down prices
threat of substitute products
if there are substi­tutes to a firm’s product, they will limit the price that can be charged and will reduce profits; customer loyalty and availa­bility will limit the extent of this threat
intensity of rivalry
compet­itive rivalry will be higher in an industry with many current and potential compet­itors

Organi­sat­ional charts

Weber suggested managers structure their organi­sations carefully and show their structure using organi­sat­ional charts. He suggested this in part to reduce nepotism. Weber pursued the internal process management model – bureau­cracy – lots of rules
lines of author­ity­/chains of command; subdiv­isi­ons­/fu­nct­ional areas or depart­ments; levels and tasks; spans of control; roles, respon­sib­ility and accoun­tab­ility; channel of commun­ica­tion; specia­lis­ation
Henry Fayol’s Scalar Chain within his 14 Principles of Management suggested organi­sations should be struct­ured, and this should be depicted through an organi­sat­ional chart

Struct­uring organi­sations

occurs where senior management make most decisions in the organi­sation
occurs when lower level or non-ma­nag­erial employees make decisions as opposed to senior managers
is in place where organi­sations use written or electronic documents to direct and control employees, rather than a friendly chat

Porter's value chain

higher the added value, the more compet­itive and profitable the organi­sation becomes
model focuses on systems with customers at its centre
focuses on primary activities
produc­tion; mainte­nance; sales; supporting activi­ties; any area that does not add value needs to be restru­ctured

Business entities

sole trader
partne­rship + LLP
privat­e/p­ublic limited company
social enterp­rises
legal framework determines who shares in the profits and losses, how tax is paid, and the legal liability

Agile organi­sations

a company whose structure, policies, and capabi­lities have been designed to enable employees to quickly respond to changing enviro­nments
why adopt agile techniques
global­isa­tion; IT and digital develo­pment; economy changes; value of human resources; enviro­nmental concerns; ethical influe­nces; political change; lifestyle trends; marketing evolve­ment; legal change; faster product delivery; operat­ional effici­encies; culture issues; necessity to react; strategic develo­pment; core compet­ence; pandemic
tradit­ional structures are replaced by flatter struct­ures, formal working practices and relati­onships are replaced by new ones with wider reporting lines and new ways of working
flatter structures encourages innovation and engagement
perfor­mance replaces presen­teeism
high level of trust placed on employees
agile organi­sations succeed if the business culture supports the change
features of agile working practices
efficient use of techno­logy; productive working enviro­nment; team working; recogn­ition and use of skills; flexible practices; career develo­pment; enrich­ment; less constr­aints; empowe­rment; more remote working; workers autonomy; talent acquis­ition and retention; job satisf­action; reduced operating costs; motivated staff; lean produc­tion; social intera­ction; career develo­pment; efficient space management
benefits of agile organi­sations
manage and prosper in complex enviro­nments; talent to quickly identify threats and identify business opport­uni­ties; innovative in produc­t/s­ervice creation, but also in creating value; increased business value; long-term approach to business; establ­ishes sustai­nab­ility
drawbacks of agile organi­sations
change cannot happen overnight; there must be commitment at all levels; culture is long establ­ished and can be a signif­icant barrier; not everyone will buy into the agile concept; benefits may not be clearly measurable and can be very subjec­tive; staff may need to be educated and trained regarding agile processes

What is a compet­itive strategy

how a business intends to achieve a compet­itive advantage in its market
compet­itive advantage is the config­uration of an organi­sations activities which enable it to meet consumer needs better than its rivals (Henry, 2021)
compet­itive strategy is about being different; it means delibe­rately choosing a different set of activities to deliver a unique mix of value (Porter, 1966)

Strategy loop

just like the Kolb’s learning loop
managers make adjust­ments based on experience
volatile markets offer opport­unities and threats, but they are unpred­ictable so planning is difficult
"­every strategy is a work in progress that is subject to revision in light of ongoing intera­ctions between the organi­sation and its enviro­nment” (Sull, 2007)

3 levels of strategy

Corpor­ate­-level strategy
Busine­ss-­level strategy
Operat­ional strategies

mechan­istic and organic organi­sations

Burns & Stalker (1961)
links to Quinn's Competing Values Framework
tall organi­sat­ions; inflex­ible; often bureau­cra­cies; fixed roles and rules; emphasis is around control; main goal is effici­ency, but are these businesses efficient?
flatter organi­sat­ions; fewer rules; decent­ral­ised; flexible bottom-up; employees involved more in decisi­on-­making process; human relations model

PESTLE analysis

compet­ition policy; industry regula­tion; government spending and tax policies; business policy and incentives
interest rates; consumer spending and income; exchange rates; business cycle (GDP)
demogr­aphic change; impact of pressure groups; consumer tastes and fashions; changing lifestyles
disruptive techno­logies; adoption of mobile techno­logy; new production processes; big data and dynamic pricing
employment law; minimu­m/l­iving wage; health and safety laws; enviro­nmental legisl­ation
Ethical + enviro­nmental
sustai­nab­ility; tax practices; ethical sourcing; pollution & carbon emissions
must be relevant and personal to the organi­sation
useful when done well
quite often done badly

Porter's generic strategies

Kay's RAI
distin­ctive capabi­lities; unique to each business; critical for establ­ishing compet­itive advantage
cost leadership
striving to be lowest­-cost provider in market; increased profit with market level prices­/in­crease market share with lower prices
involves a business operating in a amass market but adopting a unique position; usp may mean premium price; easy to copy
targeting a narrow range of customers; closely aligned to niche marketing; cost focus/­dif­fer­ent­iation focus


limited liability company
a business that is owned by its shareh­olders, run by directors and,most import­antly, where the liability of shareh­olders for the debts of the company is limited; business is a separate entity to the shareh­olders of a business; investors can only lose the money they have invested and no more
unlimited liability company
owner is liable for the debts run up in trading

Ansoff's Matrix

gives managers options to achieve growth using one of more of the strategies suggested
market penetr­ation
business aims to sell existing products into existing markets; aims to increase market share by reducing price, increasing advert­ising or improving distri­bution
market develo­pment
business aims to sell existing products into new markets; businesses retain existing markets whilst moving into new markets by altering products or developing new ones
product develo­pment
business aims to sell new products into existing markets; exploits existing customer base
business aims to sell new products in new markets; horizontal and vertical integr­ation; very risky
businesses can pursue more than one strategy at any one time

Different structures

entrep­ren­eurial structures
centra­lised structure revolves around founder of business; founder makes all decisions; employees may not have clearly defined roles and will work long hours; flexib­ility a strength
tradit­ional (tall) structures
narrow spans of control; long chain of command; more promot­ional opport­uni­ties; functional structure
flat structures
middle layer (middle managers) removed; based around teamwork and collab­ora­tion; open culture; wide spans of control; short chain of command; respond faster to market changes; innova­tive; manager overload; lack of promotion opport­uni­ties; lack of close superv­ision may lead to poor decision making so a drop in produc­tivity
matrix structures
combines functional and divisional structure; occurs when projects run; attempt to increase organi­sat­ional flexib­ility and meet needs of rapidly changing market; those involved have two bosses; can be productive and break down silos; may place more pressure and conflict on team members; may create role incomp­ati­bility; may create role ambiguity
outsourced activities controlled by a central hub, organi­sations that outsource all activities other than central capabi­lities are called hollow organi­sat­ions; core capabi­lities retained centrally; where manufa­cturing is outsou­rced; organi­sations are known as modular organi­sations useful in fast moving indust­ries; flexible; need to agree and understand goals
virtual organi­sation
employees physically dispersed; organi­sations need to be flexible and responsive to change; custom­isation and person­ali­sation key features; cost effective; less risky; collab­oration of other organi­sations to form a virtual organi­sation developing produc­ts/­ser­vices; no hierarchal relati­onship; made possible by techno­logical advances; useful if dynamic and globalised markets
an organi­sation that focuses on autonomy and self-g­ove­rnance; employees are not told how to work but belong to voluntary groups who listen to new ideas or problems and come up with solutions together; decision making by everyone rather than a line manager/HR manager; engagement and motivation increases as employees experience autonomy, mastery and meaning (Daniel Pink); originated from anti-t­ota­lit­arian political writer Arthur Koestler

Organi­sat­ional life cycle

creation (non-b­ure­auc­ratic)
few staff; few written rules; few formalised processes
young (pre-b­ure­auc­ratic)
growth and expansion; more staff; rules and guideline establ­ished
mid-life (burea­ucr­atic)
becoming large in market; many rules; many hires; decent­ralised structure
maturity (very bureau­cratic)
risk of stagnation and inflexible approach

SWOT analysis

strengths + weaknesses
opport­unities + threats
strengths of SWOT analysis
logical structure; focuses on strategic issues; encourages analysis of external enviro­nment
limita­tions of SWOT
too often lacks focus; indepe­ndent; needs to be regularly reviewed as can quickly become out of date

Levels of goals and their importance

strategy is shaped by the mission
a mission statement creates a shared and clear sense of purpose/a broad vision; it powerfully commun­icates intentions which inspires and motivates employees to realise the organi­sat­ion’s visions of the future

Resources and compet­encies

valuable capabi­lities
enable a business to exploit an internal opport­unity or neutralise an external threat; in regards to revenues and costs, any positive impact is a valuable capability
capabi­lities are rare if only one organi­sation has them, i.e. visionary leadership
difficult to retain as compet­itors copy
this may be location, knowledge, the right policies, control system and procedures
make or buy
anything that is not a core competence may be outsou­rced, which may keep costs down but then it is open to supplier price hikes/­supply issues


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