Introduction to corporate strategy

Strategy is the direction and scope of an organisation over the long term, achieving advantage through its configuration of resources and competencies — the Johnson, Scholes and Whittington definition, and the one your exam expects. Every word in it is doing work: long term rules out this quarter's firefighting, direction and scope rule out day-to-day running, and advantage means the point is to beat rivals, not merely to operate.

That last distinction — strategy against operations — is the first thing to get firm. Strategy sets where the business is going; operations execute that direction day to day. Deciding that Zambeef will own its supply chain from farm to shop shelf is strategy. Scheduling this week's deliveries from the Mpongwe farms is operations. Both matter, but only one of them is what this course examines.

Everything else in the course hangs off three questions: where are we now, where do we want to go, and how do we get there. Every framework you meet — PESTEL, the Five Forces, SWOT, the BCG matrix, the generic strategies — is a tool for answering one of the three. When a new model appears, place it against its question first and it will make sense faster.

Strategy operates at three levels, and classifying which level a decision belongs to is a core exam skill — case questions regularly ask you to classify and then justify.

A memorable shorthand: corporate asks "what businesses should we be in?", business asks "how do we compete in this business?", and functional asks "how do we execute that day to day?". When a case describes a decision, classify the level before you analyse the decision — the classification usually is what the question is testing.

The levels also cascade. When ZESCO decides to enter solar generation for rural communities, that corporate choice forces business-level decisions — which customers, what pricing against diesel generators and home solar kits — and functional ones — who builds the installation teams, how billing systems change. A corporate decision that never cascades into the lower levels stays an announcement.

Mintzberg's contribution is the observation that strategy is not always the deliberate, written thing the definition suggests. He identified five forms it actually takes in organisations.

The pair the exam tests hardest is plan against pattern. A plan is deliberate: it comes from the top and exists before the actions it directs. A pattern is emergent: it shows up in a consistent stream of decisions over time whether or not anyone intended it. The uncomfortable implication — and the reason examiners like it — is that a company can have an emergent pattern that contradicts its written plan. A bank whose plan says "digital first" but which approves branch expansion every year has a pattern that tells you its real strategy.

Strategic management runs as a cycle of four stages. "Describe the process" is a standard long-answer question, so know each stage by name and in sequence.

The stages are a loop, not a line — what evaluation finds becomes the input to the next round of analysis. And formulation begins with purpose: what is this organisation for, and what is it trying to achieve? Get that wrong and every option you evaluate afterwards is measured against the wrong target, which is why mission, vision and objectives come next in this course.

A competitive advantage is an attribute that lets a firm outperform its rivals — either through lower cost or through higher perceived value. It is sustainable when rivals cannot easily replicate it. Porter mapped the ways of pursuing one into five specific approaches.

Notice that scope — broad against narrow — is a separate choice from the source of advantage — cost against differentiation. When you read a case, identify the scope first, then the source. Mixing the two up is the most common error in generic-strategy questions: a firm serving one niche cheaply is a focused low-cost player, not a low-cost provider, and the difference changes every recommendation that follows.

Try it on Zanaco. The bank keeps branches running across rural Zambia, including some that run at a loss, and treats that reach as part of its identity. Broad scope, and an advantage built on accessibility and trust rather than on being the cheapest — a broad differentiation position. That reading also tells you what threatens it: a mobile money operator reaches the same rural customer without a single branch, attacking the very thing the differentiation is built on. Which of Porter's strategies a firm follows is never just a label — it tells you where it is exposed.