Resume

Strategic Management - 2020/2021 - Comprehensive Summary with HOC note's

9 fois vendu

Cours
Strategic Management

Établissement
Vrije Universiteit Brussel (VUB)

This summary was based on previously existing summaries & all slides. The structure was fully updated and extra/new slide info was added. ALL important information mentioned in the HOC is written down in grey (2020/20201). ALL titles are structured so that during the exam you can look them up. ...

[Montrer plus]

Dernier document publié: 4 année de cela

Aperçu 10 sur 132 pages

Voir l'exemple

Publié le 3 janvier 2021
Fichier mis à jour le 3 janvier 2021
Nombre de pages 132
Écrit en 2020/2021
Type Resume

anastasiaklimenko Membre depuis 6 année 79 documents vendus

€4,20

Ajouter au panier

Enregistrer

Garantie de satisfaction à 100%
Disponible immédiatement après paiement
En ligne et en PDF
Tu n'es attaché à rien

Summary Strategic
Management
2020
Annie

(Including cases and exam 2020)

!Open book exam!

Black = Slides
Grey = extra from lecture / handbook

0

,Contents
1. Introduction of concepts & schools of thought ............................................................................... 8
1.1. Aim of this course.......................................................................................................................... 8
1.2. The Concept of Strategy: 4 BIG ISSUES ......................................................................................... 8
1.3. What is strategy?........................................................................................................................... 9
1.4. Characteristics of strategic decisions: ........................................................................................... 9
1.5. The role of analysis ........................................................................................................................ 9
1.6. Strategy Making Processes within the Company: multiple Roles of Strategy .............................. 9
1.7. Strategic Plan Hierarchy ................................................................................................................ 9
1.8. What makes a successful strategy?............................................................................................. 10
1.9. The basic framework Strategy: the link between the firm and its environment ........................ 10
1.10. Sources of Superior Profitability ............................................................................................. 10
1.11. Big issues 2, 3 and 4: Besanko et. Al........................................................................................ 10
1.12. Components of “Success” – example ...................................................................................... 11
1.13. The Evolution of Strategic Management ................................................................................ 12
1.14. Strategy Making: Design or Process? ...................................................................................... 12
1.15. Strategy Safari – Mintzberg, Ahlstrand, Lampel...................................................................... 13
1.16. Ten schools .............................................................................................................................. 13
1.16.1. Design school........................................................................................................................... 14
1.16.2. Planning school ....................................................................................................................... 15
1.16.3. Positioning school ................................................................................................................... 15
1.16.4. Entrepreneurial school ............................................................................................................ 16
1.16.5. Cognitive school ...................................................................................................................... 16
1.16.6. Learning school ....................................................................................................................... 16
1.16.7. Power school ........................................................................................................................... 17
1.16.8. Cultural school......................................................................................................................... 17
1.16.9. Environmental school.............................................................................................................. 17
1.16.10. Configuration school ........................................................................................................... 17

2. Chapter 2 – Horizontal Boundaries of the firm ............................................................................. 18
2.1. Intro ............................................................................................................................................. 18
2.2. Determinants horizontal boundaries .......................................................................................... 18
2.2.1. Economies of Scale two options ............................................................................................. 19
2.2.1.1. U-shaped cost curve ............................................................................................................ 19
2.2.1.2. L-shaped cost curve ............................................................................................................. 19
2.2.2. Economies of scope................................................................................................................. 20
2.2.2.1. Sources of economies of scale/scope ................................................................................. 20

1

,2.2.2.2. Fixed costs ........................................................................................................................... 21
2.2.2.3. Trade-offs among technologies........................................................................................... 21
2.2.2.4. Inventories........................................................................................................................... 21
2.2.2.5. Physical Properties of Production ....................................................................................... 22
2.2.2.6. Purchasing => Large buyers can get volume discounts ....................................................... 22
2.2.2.7. Advertising........................................................................................................................... 23
2.2.3. Innovation and size ................................................................................................................. 23
2.2.4. Diseconomies of scale ............................................................................................................. 23
Intermediate Summary ........................................................................................................................... 24
2.2.5. Learning curve ......................................................................................................................... 24
2.2.5.1. Learning curve and scale economies................................................................................... 26
2.3. Why diversify? ............................................................................................................................. 26
2.3.1. Example: Virgin (this is a presentation of 10 years ago, but it’s till a big UK company) ......... 27
2.3.2. Measuring “relatedness”......................................................................................................... 28
2.3.3. Classification by relatedness ................................................................................................... 28
2.3.4. Conglomerates after WWII ..................................................................................................... 28
2.3.5. Entropy Measure of diversification ......................................................................................... 29
2.3.6. Firms can diversify in different ways ....................................................................................... 29
2.3.7. Why do firms diversify? ........................................................................................................... 29
2.3.7.1. Efficiency based reasons that benefit the shareholders: .................................................... 29
2.3.7.2. Managerial reasons: ............................................................................................................ 30
2.3.8. Diversification: long term performance .................................................................................. 30

3. Chapter 3 & 4 – Organizing vertical boundaries ............................................................................ 31
3.1. Vertical boundaries ..................................................................................................................... 31
3.2. Transaction cost theory: essentials ............................................................................................. 31
3.3. Extra from textbook .................................................................................................................... 32
3.4. The trade-off in vertical integration ............................................................................................ 33
3.5. Alternatives to vertical integration ............................................................................................. 34
3.5.1. Tapered integration................................................................................................................. 34
3.5.1.1. Tapered integration in gasoline retailing ............................................................................ 34
3.5.2. Strategic alliances and joint ventures ..................................................................................... 35
3.5.3. Collaborative relationships...................................................................................................... 35
3.5.4. Implicit contracts ..................................................................................................................... 35

2

,4. Chapter 6 – Entry and exit .............................................................................................................. 37
4.1. Forms of entry ............................................................................................................................. 37
4.2. Forms of exit................................................................................................................................ 37
4.3. Evidence on entry and exit .......................................................................................................... 37
4.4. DRS (Dunne, Roberts and Samuelson) findings on entry and exit .............................................. 37
4.4.1. Implication of DRS findings for strategy .................................................................................. 37
4.5. Cost benefit analysis for entry .................................................................................................... 38
4.6. Typology of entry conditions – How incumbents respond to threat? (3) ................................... 38
4.7. Barriers to entry .......................................................................................................................... 39
4.8. Types of structural barriers ......................................................................................................... 39
4.9. Entry deterring strategies: strategic barriers to entry ................................................................ 40
4.9.1. Limit pricing ............................................................................................................................. 40
4.9.1.1. Situations when limit pricing works: ................................................................................... 40
4.9.2. Predatory pricing ..................................................................................................................... 41
4.9.2.1. Is predatory pricing rational? .............................................................................................. 41
4.9.2.2. Situations when predatory pricing works: .......................................................................... 41
4.9.3. Excess capacity and entry deterrence (e.g. Covid and airplane companies) .......................... 41
4.9.3.1. Excess capacity is not always strategic (like Covid & airplanes) ......................................... 41
4.9.3.2. Situations when excess capacity works to deter entry ....................................................... 41
4.10. Exceptions to any strategic barrier to entry............................................................................ 42
4.10.1. Contestable Markets and Entry Deterrence ........................................................................... 42
4.10.2. Entrant’s strategy: “Judo Economics” ..................................................................................... 42
4.10.3. War of attrition ....................................................................................................................... 42
4.11. Evidence on the use of entry deterring strategies .................................................................. 42
4.12. Barriers to exit ......................................................................................................................... 42

5. Chapter 7 – Dynamics: competing across time.............................................................................. 43
5.1. Strategic Commitment ................................................................................................................ 43
5.2. Commitment value of announcements ...................................................................................... 43
5.3. Strategical or tactical? Examples................................................................................................. 43
5.4. Reversible and irreversible moves .............................................................................................. 44
5.5. Strategic commitment and competition ..................................................................................... 44
5.6. Factors that influence the strategic effect .................................................................................. 45
5.7. Flexibilty and Option value.......................................................................................................... 45
5.7.1. Commitment-flexibility trade-off ............................................................................................ 45
5.8. Dynamic price competition ......................................................................................................... 45
5.9. Dynamic vs. Static Models........................................................................................................... 45

3

,5.10. Cournot and Bertrand Models ................................................................................................ 46
5.11. Dynamic model scenarios ....................................................................................................... 46
5.12. Cooperative pricing as a dynamic model ................................................................................ 46
5.13. Market structure, cooperative pricing .................................................................................... 47
5.14. Practices that facilitate cooperative pricing............................................................................ 47
5.15. Quality competition ................................................................................................................ 47

6. Chapter 8 – Industry analysis ......................................................................................................... 48
6.1. Industry analysis .......................................................................................................................... 48
6.2. Porter’s 5 Forces Framework ...................................................................................................... 48
6.2.1. Intern rivalry ............................................................................................................................ 48
6.2.1.1. Price competition ................................................................................................................ 48
6.2.2. Entry ........................................................................................................................................ 49
6.2.2.1. Factors that affect the threat of entry ................................................................................ 49
6.2.3. Substitutes and complements ................................................................................................. 49
6.2.4. Supplier power ........................................................................................................................ 49
6.2.4.1. Factors that determine supplier power .............................................................................. 49
6.3. Some strategies to cope with the Five Forces............................................................................. 49
6.4. “Five Forces” and “Value Net” .................................................................................................... 50
6.5. Examples of cooperative interactions among firms.................................................................... 50
6.6. Five Forces analysis of Chicago Hospitals.................................................................................... 50
6.6.1. Market definition .................................................................................................................... 50
6.6.2. Internal Rivalry ........................................................................................................................ 50
6.6.3. Entry ........................................................................................................................................ 50
6.6.4. Substitutes/ complements ...................................................................................................... 50
6.6.5. Supplier power ........................................................................................................................ 50
6.6.6. Buyer power ............................................................................................................................ 51
6.6.7. Summary ................................................................................................................................. 51

7. Chapter 9 – Strategic positioning for competitive advantage ...................................................... 52
7.1. Competitive advantage and profitability: evidence .................................................................... 52
7.2. Strategic positioning.................................................................................................................... 52
7.3. Competitive advantage and value creation ................................................................................ 52
7.4. Value creation and profitability .................................................................................................. 53
7.5. Components of consumer surplus .............................................................................................. 53
7.6. Price-quality trade-off ................................................................................................................. 53
7.7. Value map: an illustration ........................................................................................................... 54
7.8. Value created and economic profits ........................................................................................... 54

4

,7.9. Value created and competitive advantage ................................................................................. 54
7.10. Where to look for value? The Value Chain.............................................................................. 54
7.11. Michael Porter’s Value Chain .................................................................................................. 55
7.11.1. Using the value chain to identify differentiation potential on the supply side ...................... 55
7.11.2. Value chain and competitive advantage ................................................................................. 55
7.11.3. Evaluating the organization of the vertical chain.................................................................... 55
7.11.4. Value creation and resources and capabilities........................................................................ 56
7.12. The emergence of competitive advantage ............................................................................. 57
7.13. Sources of competitive advantage .......................................................................................... 57
7.14. Porter’s generic strategies ...................................................................................................... 57
7.15. Stuck in the middle? Porter’s three generic strategies ........................................................... 57
7.16. Features of cost leadership and differentiation strategies ..................................................... 58
7.17. Drivers of cost advantage ....................................................................................................... 58
7.18. Using the value chain analysis to explore cost-saving : Singapore Airlines ............................ 59

8. Chapter 11 – Sustaining competitive advantage ........................................................................... 60
8.1. Sustainability with monopolistic competition............................................................................. 60
8.2. Threats to sustainability regardless of market structure ............................................................ 60
8.3. Lifecycle of competitive advantage............................................................................................. 60
8.4. Sustaining competitive advantage .............................................................................................. 60
8.4 Sustaining competitive advantage (continued) ................................................................................ 61
8.4.1. Impediments to imitation ....................................................................................................... 62
8.4.2. Early-mover advantage ........................................................................................................... 62
8.5. Virtual network ........................................................................................................................... 63
8.6. Summary CA and sustainability ................................................................................................... 63
8.7. Dynamic capabilities.................................................................................................................... 63
8.7.1. Factors that limit dynamic capabilities.................................................................................... 63
8.7.2. Path dependence .................................................................................................................... 64
9.1. Porter’s Diamond framework .................................................................................................... 64
9.2. “What creates prosperity?” ........................................................................................................ 65
9.3. Frameworks supporting competitiveness analysis ..................................................................... 66
9.4. Determinants of competitiveness “The Core Framework” ......................................................... 66
9.4.1. Endowments............................................................................................................................ 66
9.4.2. Macroeconomic competitiveness ........................................................................................... 67
9.4.2.1. Sound monetary and fiscal policy ....................................................................................... 67
9.4.2.2. Human development and effective public institutions ....................................................... 67
9.4.3. Microeconomic competitiveness ........................................................................................... 68

5

,9.4.3.1. Sophistication of company operations and strategy .......................................................... 68
9.4.3.2. Quality of the Business Environment .................................................................................. 69
9.4.3.3. State of cluster development .............................................................................................. 71
9.5. Creating Shared Value (CSV) ....................................................................................................... 74
9.5.1.  Corporate Social Responsibility (CSR) .................................................................................. 74
9.5.2. How to create shared value opportunities?............................................................................ 75
9.5.3. Examples of CSV ...................................................................................................................... 76

10. Chapter 13 – Strategy and Structure.......................................................................................... 77
10.1. Designing organizational structure ......................................................................................... 77
10.2. Determinants of structure....................................................................................................... 77
10.3. Fundamentals of Organizing ................................................................................................... 78
10.4. Complex hierarchy .................................................................................................................. 78
10.5. Types of organizational structures .......................................................................................... 79
10.5.1. Functional organization (U-form) ............................................................................................ 79
10.5.2. Multidivisional Organization (M-form) ................................................................................... 79
10.5.3. Divisional Organization............................................................................................................ 80
Customer and geographic divisions: ....................................................................................................... 80
10.5.4. Matrix organization ................................................................................................................. 80
10.5.5. Network organization.............................................................................................................. 81
10.6. Strategy – structure coherence ............................................................................................... 82
10.7. Exam question ......................................................................................................................... 82

11. Chapter 14 – Environment, power and culture ......................................................................... 83
11.1. Social context of firm behavior ............................................................................................... 83
11.2. Internal context ....................................................................................................................... 83
11.3. Power and culture ................................................................................................................... 84
11.4. Do we need power? ................................................................................................................ 84
11.5. Power and culture ................................................................................................................... 84
11.6. External contexts ..................................................................................................................... 84
12. Appendix ..................................................................................................................................... 85
12.1. Exam strategic management january 2019............................................................................. 85
Case 1 : MAERSK .............................................................................................................................. 85
Case 2 : STARBUCKS......................................................................................................................... 85
12.2. Solution of 3 assignments (year unknown) ............................................................................. 86
12.2.1. Case 1 – Shell ........................................................................................................................... 86
12.2.2. Case 2 – Tesla .......................................................................................................................... 87

6

,12.2.3. Case 3 – Ryanair ...................................................................................................................... 89
12.2.4. Case 4 – Yara International Africa Strategy ............................................................................. 94
12.3. ‘How To Do’ – Value Chain Analysis....................................................................................... 99
12.3.1. Value chain analysis for McDonald’s and its cost leadership strategy.................................. 100
12.3.2. Value chain for Starbucks ...................................................................................................... 101
12.3.3. Value chain for Dell ............................................................................................................... 102
12.4. ‘How To Do’ - SWOT ............................................................................................................. 104
12.4.1. SWOT Analysis for Netflix ...................................................................................................... 104
12.5. ‘How To Do’ - Porter’s Diamond model ............................................................................... 106
12.5.1. Germany’s Luxury Car Manufacturing Industry .................................................................... 106
12.5.2. Mobile telecommunication ................................................................................................... 107
12.6. ‘How To Do’ - Porter’s Five Forces ....................................................................................... 108
12.6.1. Netflix .................................................................................................................................... 108
12.6.2. Mc Donald’s........................................................................................................................... 109
12.7. ‘How To Do’ - Porter’s Generic Strategies ........................................................................... 110
12.8. ‘How To Do’ - BCG................................................................................................................. 112

12.9. Case discussions 2020-2021 .................................................................................................. 114
12.10. Case 1 : Porsche .................................................................................................................... 114
12.11. Case 2: Walmart.................................................................................................................... 116
12.12. Case 3: Wumart .................................................................................................................... 118
12.13. Case 4: Netflix ....................................................................................................................... 122
12.14. Case 5: Starbucks .................................................................................................................. 126

7

,1. Introduction of concepts & schools of thought

1.1. Aim of this course
• Critically understanding concepts, schools of thought and current trends
o How they look at strategy, from different angels, over a period of 50 years
o Young stream of science, starting with the military strategy in he 2nd WW and then from there
we see the first research appearing and exponentially booming from the 60’s on.
• Knowing and applying strategy instruments/analyses/frameworks
• Understanding principles, but also their limitations in the context of market/business reality
• Importance of links and assumptions

1.2. The Concept of Strategy: 4 BIG ISSUES

1. Concept and evolution of strategic “schools of thought” WHAT?
o How did SM develop as a science?
2. Boundaries of the firm: WHERE?
o Horizontal: size of the company, how much producing
o Vertical: what will we produce or buy?
o Corporate (company as a whole): on which markets do we want to be?
3. Competition: WHO and HOW?
o Type of market business is operating
o Kind of interaction of rivals
4. Positioning and dynamics: WHY?
o Where do we want to be? Low cost? Differentiation?...
o Which competitive advantage do we want to have? Do we have the resource
and capabilities for that?

 The first issue in corporate strategy: “What are the boundaries of our firm, what do we do, and what do we
do not?”
o E.g.: You’re in IT: “Do we do only hardware or do we make also the software to that, do we add services?
To make the software individual for our customers?
o If you have a value chain from raw materials to end consumers, we can look at the boundaries in a
horizontal way, how many products or you can look in the vertical way: ‘I’m going to make a soft drink
but also the packaging for distribution and I’m even controlling the distribution channel myself or e.g. I
make diamonds but I also own the mines (upstream or downstream integration).
o Finally, in which markets do we want to be, which can be horizontally or vertically segmented, so finally
we decide on our portfolio = portfolio management = C-level.
o The CEO and his/her team, they wonder about this, over and over again, if the market’s changing,
competitors change, if they’re considering a merger or acquisition,… it’s with all that in their mind, ‘what
are the boundaries of our firm’. There are mainly efficiency related & managerial (e.g. be CEO of a bigger
firm) related reasons. Typically when there are no managerial reasons behind this, it doesn’t last long.

 Who and how are we competing? – Business Unit Level
o Who else is in that market?

 Once we know who’s there, how do we interact? If they do ‘this’, what should we do?
o E.g. they apply limit pricing / predatory pricing this is potentially starting a price war, what is the best
reaction to that and how do we explain this? And even though explicit price corporation is illegal, a lot
of companies do apply some kind price coordination…
o Our decision depend also on the basic resources we have

8

, 1.3. What is strategy?
Distinguishing strategy from tactics:
• Strategy = the overall design and philosophy to plan for deploying resources to establish a favorable
position/ reach success
o Usually LT
o Significant commitment of resources (not only money wise)
o Not easily reversible
• Tactic = a scheme for a specific maneuver
o Short term

1.4. Characteristics of strategic decisions:
• Important
• Involve a significant commitment of resources
• Not easily reversible

1.5. The role of analysis
• Strategy analysis improves/supports decision processes, but doesn’t give answers
• Strategy analysis assists us to identify and understand the main challenges of organizations/
businesses
• Strategy analysis helps us to manage complexity
• Strategy analysis can enhance flexibility and innovation by supporting learning

1.6. Strategy Making Processes within the Company: multiple Roles of Strategy

1.7. Strategic Plan Hierarchy

(KPI’s)

9

Les avantages d'acheter des résumés chez Stuvia:

Qualité garantie par les avis des clients

Les clients de Stuvia ont évalués plus de 700 000 résumés. C'est comme ça que vous savez que vous achetez les meilleurs documents.

L’achat facile et rapide

Vous pouvez payer rapidement avec iDeal, carte de crédit ou Stuvia-crédit pour les résumés. Il n'y a pas d'adhésion nécessaire.

Focus sur l’essentiel

Vos camarades écrivent eux-mêmes les notes d’étude, c’est pourquoi les documents sont toujours fiables et à jour. Cela garantit que vous arrivez rapidement au coeur du matériel.

Foire aux questions

Qu'est-ce que j'obtiens en achetant ce document ?

Vous obtenez un PDF, disponible immédiatement après votre achat. Le document acheté est accessible à tout moment, n'importe où et indéfiniment via votre profil.

Garantie de remboursement : comment ça marche ?

Notre garantie de satisfaction garantit que vous trouverez toujours un document d'étude qui vous convient. Vous remplissez un formulaire et notre équipe du service client s'occupe du reste.

Auprès de qui est-ce que j'achète ce résumé ?

Stuvia est une place de marché. Alors, vous n'achetez donc pas ce document chez nous, mais auprès du vendeur anastasiaklimenko. Stuvia facilite les paiements au vendeur.

Est-ce que j'aurai un abonnement?

Non, vous n'achetez ce résumé que pour €4,20. Vous n'êtes lié à rien après votre achat.

Peut-on faire confiance à Stuvia ?

4.6 étoiles sur Google & Trustpilot (+1000 avis)

66184 résumés ont été vendus ces 30 derniers jours

Fondée en 2010, la référence pour acheter des résumés depuis déjà 15 ans

Commencez à vendre!

Resume

Strategic Management - 2020/2021 - Comprehensive Summary with HOC note's

Infos sur le Document

Sujets

École, étude et sujet

Vendeur

Avis reçus

Aperçu du contenu