Chapter 1 - Strategy defined

Question 1

What is strategy about?

Answer 1

• it is about asking questions and trying to choose the best options based on this
• it is about making choices and also to decide what not to do or what not to do anymore
• it is about “adaptive planning”; finding a balance between sticking to a plan and keeping some flexibility
• listening to what (potential) customers have to say
• find people that support your decisions and make them motivated to turn these decisions into actions and results

Question 2

What are the three components of a strategy definition? Explain in detail.

Answer 2

1) Meaningful positioning

Create a position among your competitors that the customers come to you / prefer you (also called customer-centric approach).
If your position does not make sense towards the customers, then why should they buy from you?
→ can lead to competitive advantage

Meaningful refers to long-term goals:

• Continuity goals → long-term survival of the company e.g. linked to market share, profit, turnover, profitability
• Social goals → well-being of the employees; link between leadership style and organizational culture; if employees are doing good they will contribute to the continuity of the company
• Societal goals → relationship between the organization and the external world; by taking care of environment the corporate image can be boosted and indirectly maybe the sales

2) Well-defined time span

Work with deadlines and make SMART short-term decisions

3) Different possible ways

Even though companies (even of the same industry) have total different strategies, they can still be successful and survive - multiple ways possible

Question 3

What are the goals with the three components Meaningful positioning, Societal goals and Different possible ways?

Answer 3

They should create a sustainable competitive advantage

Question 4

What is a sustainable competitive strategy?

Answer 4

• being different
• being unique and outstanding compared to competitors
• sustainable: it should last over a longer period of time

Question 5

Describe Mintzberg’s vision on strategy.

Answer 5

You start out with an intended strategy.

However, only parts of the initial plan will be fulfilled because of two reasons:

1) Unrealized strategy: Some of the things you initially intended to do are not a good choice anymore, so you execute them

2) Opportunistic strategy: Opportunities you could not have foreseen, these opportunities might disappear as fast as they appeared, so they might be irrelevant if you wait until the next strategic plan

Question 6

Describe the strategic triangle and how it is build.

Answer 6

It is a tool to build up or restore a competitive advantage (competitive advantage in the middle of the triangle)

The three corners of the triangle contain:

• Steering elements → What do I want to do?
  All the things that give a direction e.g. business definition, goals, objectives
• Environment → What should I do?
  Refers to the external world which is linked with opportunities but also threats for your organization
• Resources → What can I do?
  Resources you have e.g. money, human resources, knowledge, …

Balancing these three corners correctly will help to realize the competitive advantage