Lecture notes
Lecture 8
- Institution
- Royal Holloway University Of London
CORPORATE STRATEGY & INTERNATIONAL COMPETITIVENESS
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25/10/2019LECTURE 8: CORPORATE STRATEGY & INTERNATIONAL
COMPETITIVENESS
TODAY’S OBJECTIVES: TODAY’S LEARNING OUTCOMES
• Strategy overview By the end of this session you will be able to:
• Corporate Strategy as a distinct area • Understand what competitive advantage is
• Global-Local dimension to operating • Understand what ‘strategy’ and how corporate
internationally strategy fits into this is
• International Competitiveness aka • Understand the implications of the global-local
Porter-The diamond framework dimension to developing a strategy
• Examine the determinants and external
variables in Porter’s “diamond” model of
national competitiveness
COMPETITIVE ADVANTAGE…YES BUT WHAT IS IT?
Competitive advantage is a function of either providing comparable buyer value more efficiently than
competitors (low cost) or performing activities at comparable cost but in unique ways that create more
buyer value than competitors and, hence, command a premium price (differentiation).
You don’t have to do things perfectly, but you need to them better than your competition.
It is not a concept that all organizations get.
Michael Porter he is one of the key writers, he argues that fundamentally you can seek
competitive advantage in 2 ways:
1. You can be extremely efficient and become the cost leader in your industry
2. You can differentiate yourself, your product or your service
You can now combine both cost and differentiation (eg. Ikea). So, this is the 3rd option but Michael
Porter does not agree with this while other writers do.
There are 3 particular competitive advantages:
1. Cost leader
2. Differentiation
3. Hybrid position
, LEVELS OF STRATEGY LEVEL OF STRATEGY
Issues of Scope and Parenting Relationship M & S was the market leader in the 19s. As they
did not change their strategy properly, they are
not as popular as they used to be.
C o rp o ra te
S tra te g y
We can use strategy as a tactic.
B u s in e s s
There are a lot of different views on strategy but
S tra te g y the most common one is the one that underpins
the thinking idea that we have directions on
where we are going.
F u n c ti o n a l
S tra te g y Once organizations know where they are going in
the next years, they will set specific objectives to
C h o ic e o f P r o d u c t s be able to determine how they are progressing.
C h o ic e o f M a r k e t s And then they check if they are on target with
C h o ic e o f C o m p e t it o r s
their strategy.
INCREMENTALISM is the idea of small adjustments to a strategy, based on your KPI (Key
Performance Indicator)
DIFFERENT LEVELS OF STRATEGY:
• Corporate Level is when a business makes a decision that affects the whole company.
It is utilized to help increase competitive advantage over its competitors and to continue
to offer a unique product or service to consumers.
o Where to Compete?
o What Business/es?
o Relationship with units (Parenting)
• Business Level focuses on how to attain and satisfy customers, offer goods and
services that meet their needs, and increase operating profits. To do this, it focuses on
positioning itself against competitors and staying up to date on market trends and
technology changes.
o How to Compete & Cooperate?
• Functional Level consists in the actions and goals assigned to various departments that
support your business level strategy and corporate level strategy. These strategies specify
the outcomes you want to see achieved from the daily operations of specific departments
(or functions) of your business.
o How to Contribuite?
THE KEY CORPORATE LEVEL STRATEGY QUESTIONS
Key themes over the past 30 years
• Vertical Disintegration and the rise of….
• Alliance Capitalism-we cover this next week
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