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Strategic Management Lecture Notes
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Lecture notes of 26 pages for the course 6012B0430Y at UvA (6 weeks of notes)
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WEEK 1Lecture 1: Introduction
Learning goals:
- Recognize strategic problems in practical situations
- Explain how organisation can develop strategies to effectively deal with the demands
of the contemporary business environment
- Analyse external and internal environments of an organisation
- Resolve basic strategic problems in practical stations
Assignments
- 30% group assignments + bonus points
- 70% Written examination (open and 25 closed questions)
Strategic management and external analysis
What is strategy?
- What comes to your mind when you hear the word “Strategy”?
o Method to achieve what you want
o Game plan
o Chess
o Structuring and planning of ideas
- Origin
o (Greek) “Leader or commander of an army”
- Dictionary definition
o A detailed plan for achieving success
o The skills of planning for such situations
- Course definition (2 definitions)
o Porter: “strategy is the creation of unique and valuable positions, involving a
different set of activities”
o Book: “ A strategy is an integrated and coordinated set of commitments
(Decisions), and actions designed to exploit and develop core competencies
and gain a competitive advantage.”
Competitive advantage
- = when a firm implements a strategy competitors are unable to duplicate or find too
costly to try and imitate
Operational effectiveness
- = performing activities better, that is, faster, or with fewer inputs and defects, than
rivals (Porter, 1996)
- Why is operational effectiveness not strategy?
o Competitors can imitate this easily
Strategic planning
- “Strategic positioning attempts to achieve sustainable competitive advantage by
preserving what is distinctive about company… by performing different activities
from rivals, or performing similar activities in different ways” (Porter, 1996)
, - Variety based positioning
o Product orientated
o Based on choices of product or service varieties rather than specific customer
segments
- Needs-based positioning
o Thinking about specific customer preferences
o Serving most or all needs of a particular group of customers
Ex. Lululemon (yoga mats)
- Access-based positioning
o Segmenting customers who are accessible in different ways
- Strategic planning is not enough in the long-term unless unique combination of
activities is created
o Trade-offs naturally emerge
o Strategy is about combining activities
Two underlying models
- I/O Model
o Assumptions: Resources are mobile, rational decision-making, firm strategies
are similar in nature (Porter’s five forces)
o 20%
- Resource based view
o Assumptions: Heterogenous firm resources, immobile resources, rational
decision making
o 36%
, Strategic management process:
Analysing the external environment
- How can we identify opportunities and threats?
o Analyses macro and industry environments
Macro embroilment
- What would I look at if I was going to make an investment
o Political conditions
Stability, taxation
o Environmental conditions (natural resources)
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