Reflection on unit 5

And so now we are onto the Choose phase of Johnson & Scoles' cycle.

A reminder of the different levels of strategy

Corporate
Business
Functional

Evaluation and choice of strategic options occurs at the business strategy level - how and where the organisation will compete (competitive strategy). Heavily influenced by corporate strategy issues.

4 key areas to unit 5
- relationship between competitive and corporate strategy
- types of competitive strategies and decision making evaluation
- corporate strategy options, scope of the organisation and the role of the corporate parent
- corporate strategy options for multi-business organisations

Learning outcomes - be able to
1. Analyse the org's competitive strategy and why it has chosen to compete this way
2. Understand corporate strategy and the rationale behind your organisations decisions to pursue particular corporate or competitive strategies in its chosen industries or sectors
3. undertake an evaluation of the organisational strategic choices made, using a variety of evaluative measures to comment upon its congruence with organisational aims and objectives.

How we compete within our given industries and sectors is the focus of competitive strategy, whilst corporate strategy is about the interrelationships between businesses (business units).

These interrelationships between business or business units can have a powerful effect on competitive advantage as they could benefit from eg. shared activities.

Two key questions. What options are available, and how and why do we choose between them?

Remember it's an iterative process as organisational life is messy! Organisational decision-making processes are untidy.

If it were an interative process it would be U5s2p8:-

• Develop or define organisation’s objective
• Analysis and projection of the environment surrounding organisation (macro-economic analysis, political climate, etc.)
• Reconsider objective (and change if environment requires this)
• Develop strategy options
• Select option against likelihood of achieving objective
• Implement chosen strategy option

In a small business there may not be much of a plan other than what is in the owner/entrepeneur's head.

As these busineses need to grow they may need to develop strategic plans to help them secure additional capital for that growth.

Larger organisations, particularly those with many business units will not only have a formal business plan but also often a dedicated strategic planning process and even function or team.

It also encourages consistency in the decision making at all levels of the organisation.

end u5s2p8