Business Chemistry

2Principles of Strategy: How to Develop Strategy

Jens Leker¹ and Tobias Lewe²

¹ University of Münster, Department of Chemistry and Pharmacy

² A.T. Kearney Management Consulting GmbH, Energy & Process Industries Practice

Strategy is about making choices, trade‐offs; it’s about deliberately choosing to be different.

Michael Porter, Professor at Harvard Business School

This chapter introduces the fundamentals and basic principles of strategy development. We first describe a fictitious situation of an executive manager in the chemical industry to illustrate the market environments and choices managers face when developing strategies. This example ends with a couple of questions that should periodically be asked by executives to challenge existing strategies and to guide strategy development. The main issues with these questions are discussed in depth later as well as in Chapter 3, which particularly focuses on strategic analysis. In Section 2.2 of the present chapter, the main definitions of strategic management are presented, which are further illustrated by examples from the chemical industry. In Section 2.3 we present an overview of strategy trends and in Section 2.4 you will learn about the strategy development process. Finally, the general conditions and trends actually guiding strategy development in the chemical industry are depicted in Section 2.5, to emphasize the dynamic and complexity of industrial practice. But let’s start with Walter Brown.

2.1 The First Day for ...