BsS Business Strategy – Bob de Wit –
Summary
Chapter 1
The nature of strategy
An understanding of the topic of strategy can only be gained by grappling with the diversity
of insights presented by so many prominent thinkers and by coming to terms with the fact
that there is no simple answer to the question of what strategy is.
Identifying the strategy issues
Strategists are seen as either:
o Actors who identify, determine, evaluate, choose, translate and carry out based on
rigorous logic and extensive logic of all important factors.
o The nature of strategic thinking is highly intuitive and creative rather than rational.
Strategizing is about perceiving strengths and weaknesses, envisioning threats and
opportunities and creating the future, which requires imagination and judgement.
Dimensions: strategy content, strategy process, and strategy context
o Distinguishable dimensions each
strategic problem is three-dimensional
o The understanding of all dimensions is
essential to solve the problem
o E.g., the manner in which the strategy
process is organized will have significant
impact on the resulting strategy content,
while the content of the current strategy
will strongly influence the way in which
the strategy process will be conducted in
the future.
Strategy content: the combined decisions and
choices that lead the company into the future.
What is, and should be the strategy for the
company and its units? Aggregation
(combination):
o Lowest level: one person or task
o Highest level: all people or activities within
the organization
o 3 levels of aggregation:
o Functional level operations,
marketing and financial strategy
(etc.)
o Business level the functional
level strategies are intended for
specific products/services and
customer groups. In companies that
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, operate in multiple businesses, a multi business or corporate level strategy is
required
o Network level companies that operate in various businesses. In such
companies a multi business or corporate level strategy is required which
aligns the multiple business level strategies.
Strategy process: the manner in which strategies come
about is referred to as strategy process. How, who and
when of strategy.
o Analysis stage: SWOT analysis
o Formulation stage: check, evaluate and choose
available strategic options
o Implementation stage: concrete carried-out
activities
Strategy context: circumstances under which strategy
content and strategy process are determined. Where (In
which firm and which environment) are the strategy
process and the strategy content embedded?
o Strategists agree that managers should strive for
a balance between the strategy process, strategy
content and specific circumstances.
o Strategists disagree related to details.
o Important question: Should the strategic manager’s actions be determined by the
context or should the strategic manager shape the context?
o “Set the rules” perspective: the strategy context has a dynamic of its own that can
hardly be influenced. Motto: “adapt or die”.
o Perspective: strategists should not be driven by the context but should have a large
measure of freedom to set their own course of action.
Structuring the strategy debates
Puzzles: A challenging problem with an optimal solution.
Dilemmas: A vexing problem with two possible
outcomes, neither one is logically the best.
Trade-offs: Many possible solutions and
combinations between two opposites can be
found, each one with its own pros and cons (e.g.,
work and leisure time).
Paradoxes: a situation in which 2 seemingly
contradictory or mutually exclusive factors appear
to be true at the same time. It is a problem that
has no real solution.
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,Dialectical enquiry: two opposite points of view are used by the problem-solver, to have a
better understanding of the issue. Advantages are:
o Understanding of the range of ideas
o Points of contention/ arguments
o Stimulus for bridging use elements of both
poles
o Stimulus for creativity challenge to deal
with both situations
Managing strategy paradoxes
A discussion between two representatives with opposite views leads to a better
understanding of the matter.
For strategists, understanding the problem is more a beginning and not the end itself. The
steps of making better strategic decisions and acting more efficiently are more important.
Separating Research and Development from the company’s operations may work (Paradox
of exploration and exploitation), separating the corporate objective to create multi business
synergies from business unit operations (Paradox of synergy and responsiveness) is not an
option.
The attractiveness of an option is directly related to the specific company context, such as
the industry context and the firm’s company culture.
Navigating: focus on one contrary demand at a time, which leads to a development path.
Managing the paradox of multi business synergy and multi business responsiveness, a
company may start a corporate initiative to capture synergies between businesses (such as
“one firm”), followed by another initiative (such as “customer first”) aimed at improving
responsiveness of the business units.
Parallel processing: Separate the contrary demands in different internal departments or
business units or external (alliance partners) organizational units. A company may separate
improving existing products and developing a new generation of products in different units.
Balancing: Manage opposite demands by trading off elements of the opposing demands and
finding the most appropriate balance – dynamic equilibrium. When employing that
strategy, the strategist is looking for constituting elements of each demand to create a
company-based balance that may change if the circumstances change. The manager might
comply with certain industry rules while changing others.
Juxtaposing: simultaneously manage opposite demands permanently. The conflict is
accepted, and the manager/strategist will have to accommodate both factors at the same
time. It requires dynamic capabilities to manage to opposites on daily or project basis.
Resolving: Arrive at a higher-level equilibrium by developing a new synthesis between
competing demands or exploiting the tension. It will create a new balance between contrary
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, elements. For example, companies may add societal demands into their mission statement
and combine the need to create societal value to create shared value.
Embracing: The sixth option is to embrace and actively use the tension as a source of
creativity and opportunity. The conflict is not only accepted but exploited to benefit the
innovative power of tensions. A firm may, for example, assign to opposite personalities in
the leadership team.
Developing an international perspective
National differences in strategic management practices and preferences have been
identified but in general the topic has received little attention.
International companies, cross-border-strategists and global strategists should question
whether their own theories can be globally standardized or if they are limited by their
domestic “field of vision”. Yet the real danger is if certain theories are based on local
assumptions that are not true or appropriate in other nations – that danger can be called
“think local, generalize global”. It required strategists to guard against the indiscriminate
export of domestically generated strategy theories across international borders. The
question can be whether theories “travel” as well as the companies they describe.
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