1. Strategy and
Strategic
Management: An
overview
Global Business Consultants &
Partners Training Courses
Copyright 2020 Global Business Consultants

2. Chapter 3. Aligning Strategy
to the Company’s External
and Internal Situation
Lesson 1: Strategic Position

3. Strategic
position
Understanding the strategic position of an organisation.
 A company can use many methods to determine its strategic
position. Some methods include:
 Internet research on macro, market and industry trends;
 sending out customer and employee surveys; and
 acquiring information about its competitors through secret shopper,
trade shows, or industry reports.
 A company must also understand its external environment.
 Essentially, those factors which it cannot control such as Political,
Environmental, Societal, Technological, Economic and Legal factors.
 A company must understand its Strengths, Weaknesses,
Opportunity and Threats in determining its strategic position.

4. Strategic
position
 The Organisation’s Environment
 Political Economic Social Technological Environmental Legal
(“PESTEL”)
 Strategic Capability of a Company
 Resources and Competences
 Strengths and Weaknesses
 Expectations and Purposes
 Corporate Governance, Stakeholders, Ethics and Culture.
 Sources of Power and Influence.
 Communication of Purpose: Mission and Objectives.

5. Strategic
position
 The Organisation’s Environment
 Every company operates in a broad “macro-environment” that
comprises six principle components.
 Political factors.
 Economic conditions in the company’s general environment
(local, country, regional, worldwide).
 Sociocultural forces.
 Technological forces.
 Environmental factors.
 Legal/regulatory conditions.
 An analysis of the impact of these factors is referred to as
PESTEL analysis.

6. Strategic
position
The Organisation’s Environment
 Macro-economic factors impact different industries in
different ways.
 It is fundamental that business owners and managers
determine which of these represent the most strategically
relevant factors outside the company’s industry
boundaries.
 By strategically relevant we mean important enough to
have a bearing on the decisions the company will
ultimately make about its long-term direction,
objectives, strategy, and business model.

7. Strategic
position
The Organisation’s Environment
 The impact of macro-economic factors can range
from big to small. But even if factors change slowly or
are likely to have a low impact on a company’s
situation, they still must be watched with careful
interest.
 For example. The strategic opportunities for a cigarette
producer to grow their business are greatly reduced by
antismoking ordinances, the decisions of government to impose
higher taxes, and the growing cultural stigma attached to
smoking.

8. Strategic
position
The Organisation’s Environment
 Political factors. These factors include political policies
and processes, including the extent to which a
government intervenes in the economy.
 Economic conditions. These conditions include the
general economic climate and specific factors such as
interest rates, exchange rates, the inflation rate, and the
unemployment rate.
 Sociocultural forces. These forces include the societal
values, attitudes, cultural factors, and lifestyles that
impact businesses, as well as demographic factors such as
population size, growth rate and age distribution.

9. Strategic
position
The Organisation’s Environment
 Technological factors. These factors include the pace of
technological change and technical developments that
have the potential for wide-ranging effects on society
such as genetic engineering and nanotechnology.
 Environmental forces. These forces include ecological
and environmental forces such as weather, climate,
climate change and associated factors like water
shortages.
 Legal/regulatory factors. These factors include the
regulations and laws with which a company must comply
such as consumer laws, labour laws, anti-trust laws, and
occupational health and safety regulations.

10. Strategic
position
The Strategic Capability of a Company
 An essential element for a business owner or
manager to decide whether his or her company’s
overall situation is fundamentally healthy or
unhealthy entails interrogating the attractiveness of
its resources and capabilities.
 A company’s resources and capabilities are its
competitive assets.
 It also determines whether its competitive power in the marketplace
will be impressively strong or disappointingly weak.
 Company’s with second-rate competitive assets nearly always are
relegated to a trailing position in the industry.

11. Strategic
position
The Strategic Capability of a Company
 In evaluating a company’s overall situation, a key
question is whether it is in a position to pursue attractive
market opportunities and defend against external threats
to its future well-being.
 The most effective and widely used tool for conducting
this examination is known as SWOT analysis.
 It zeroes in on a company Strengths, Weaknesses, market
Opportunities and external Threats
 A well thought through SWOT analysis provides the basis for developing a
strategy that capitalizes on the company's strengths, overcomes its
weakness, capture market opportunities and defends against external
threats.

12. Strategic
position
The Strategic Capability of a Company
 SWOT analysis involves more than just making four lists.
 The two most important parts of SWOT analysis is Drawing Conclusions and
Translating these conclusions into strategic actions.
 The conclusions concerning a company’s overall situation is gleaned by asking:
 Where on the scale from “alarmingly weak” to “exceptionally strong” does the
attractiveness of the company’s situation rank.
 What are the attractive and unattractive aspects of the company’s situation.
 In translating the analysis, implications for the improving the company’s
strategy include:
 Using the company’s strengths as the foundation for its strategy.
 Pursuing those market opportunities best suited to its strengths.
 Correcting weaknesses and deficiencies.
 Using the company’s strengths to lessen the impact of important external threats.

13. Strategic
position
Expectations and Purposes
 The idea of stakeholders in the extreme, means that
every person is a stakeholder of every company.
 The first step in stakeholder management, is the process of accurately assessing
stakeholder claims so a company can manage them effectively. It is therefore
fundamental to define and prioritize stakeholders significant to the company.
 Using the Power/Influence tool is the most widely used
and effective stakeholder prioritization framework
 The Power/Influence grid helps company’s focus on the key stakeholders who can
make or break business venture. In turn, this helps you in stakeholder
prioritizations.
 A company’s Mission and vision both relate to its purpose
and are communicated in written form.
 Mission and vision are statements from the company that answer questions about
“who we are, what do we value, and where we’re going”.

14. “Most strategies are a
combination of intended and
emergent processes.”
Karen | GBC

15. Congratulations! You’ve completed lesson .
Recap: In this lesson you learned about the focus areas of
determining a company’s strategic position and thereafter
communicating its purpose to stakeholders. You learned that a
company’s strategic position can be determined using tools such
as PESTEL and SWOT analysis.
Awesome work!
Now click Complete and then Next for Lesson 2.