Summary and college notes on Fundamentals of Strategy by Richard Whittington - 5th edition - a little scrambled
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Course
International Business Strategy
Institution
Rijksuniversiteit Groningen (RuG)
Book
Fundamentals of Strategy
This is a summary of the most important chapters and all college notes on Fundamentals of Strategy by Richard Whittington the 5th edition. It reads like study notes and not all chapters are in perfect order. I've included all visuals that are important for the exam. Written 2024.
Week 1: JWS 1, 3 & 4 + Porter 1996 article
Lecture
Keywords strategy: change – competition – management – analysis – contingency plan –
future – policy – goals – institutions – planning – finance – profit – innovations
Strategy is…
Long-term direction
Scope of activities: what business are we in?
Positioning: who do(‘nt) we serve?
Resources and competences: what do we use? And how?
Fulfilling expectations: how good?
Advantage: what do we do better?
These questions can be answered using the mission statement of a company.
Strategy implements…
VRIO-framework – sustainable competitive advantage.
Valuable: market potential?
Rare: not same value perceived with other product?
Inimitable: costly to imitate.
Organizationally embedded: exploited non-substitutes.
To see whether the firm is competitive and to determine its current market position –
only focusing on resources and capabilities.
SWOT-analysis: Strengths, Weaknesses, Opportunities and Threats. Internal (SW) and
external (OT). SWOT is an extension of VRIO.
JWS
Chapter 1 – Introducing Strategy
Strategy – long-term direction of an organization. There
are different definitions of strategy:
Chandler: long-run goals and objectives and allocation of resources.
Porter: being different, different set of activities, unique mix of value.
Mintzberg: pattern in a stream of decisions.
Exploring Strategy: long-term direction of an organization. Long
term
Three horizons framework – comprising three types of business or activity:
1) Core activities
2) Emerging activities new source of profit
3) Possibilities: unsure (R&D)
, Essential: managers need to avoid focusing on the short-term issues. Strategic
direction
Trajectory, long-term objectives are set. Depends on the type of organization. I.e.: private
sector; maximizing profits for shareholders. However, profit not always strategy drive.
Organization
Not only organization, but also stakeholders: people working inside or outside the
organization: involved with different interests and views.
Strategic management – managing people, relationships and resources.
Levels of Strategy
Corporate-level strategy – overall scope of an organization and how value is
added.
Business-level strategy – how individual business should compete in their
particular markets.
Operational strategies – how the components deliver effectively to both corporate-
level and business-level strategies in terms of resources, processes and people –
integration.
Strategy Statements
Strategy statements – three main themes: fundamental goals: mission, vision and
objectives; scope or domain activities and advantages/capabilities.
Mission: what business are we in? – Mission statement.
Vision: what do we want to achieve? – Vision statement.
Objectives: what do we have to achieve in the coming period?
Scope: three dimensions: customers/clients, geographical location, extent of
internal activities.
Advantage: being better than others to achieve same goal.
Exploring strategy model – understanding strategic position assessing strategic choices for
the future and managing strategy in action – equally prior.
Strategic position – impact on strategy of external environment, strategic
capability, goals and culture:
× Environment – opportunities and threats (swOT). Regarding: political,
social, technological and economic.
× Strategic choices – resources and competences: strengths and
weaknesses (SWot). Competitive (dis)advantage? Adequate tools?
× Strategic purpose – vision, mission and objectives, influenced by
governance structure and culture. What does it seek to achieve?
Strategic choices – options for strategy: directions and methods.
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