lOMoARcPSD|2374147
Samenvatting – Strategic Management
Table of contents
The quest of a competitive advantage .......................................................................................... 3
1 Theme 1: Introduction: What is strategy? ............................................................................. 3
1.1 Strategic thinking................................................................................................................. 3
1.2 Competitive advantage ....................................................................................................... 3
1.3 The evolving nature of an organization’s strategy............................................................... 4
1.4 Businessmodel elements .................................................................................................... 5
1.5 What makes a good strategy? ............................................................................................ 8
1.6 Definition of a strategy ...................................................................................................... 10
1.7 Levels of Leadership Influence ......................................................................................... 11
2 Theme 2: Organization Direction & External Analysis ....................................................... 11
2.1 Crafting a strategy: purpose and strategy ......................................................................... 11
2.2 An Industry or External Analysis ....................................................................................... 16
3 Theme 3: Internal Analysis: Resources, Capabilities and Competitive advantage ......... 26
3.1 Resources & Capabilities: the impact of resources & capabilities in firms ........................ 26
3.2 Understanding your internal position within the competitive setting.................................. 29
3.3 Strategy: focusing on distinctive capabilities (brand recognition)...................................... 33
3.4 Resources & Capabilities of strong strategic leaders: “Strategizing Distinctive Capabilities
33
3.5 A case ............................................................................................................................... 36
4 Theme 4: Generic strategies & Competitive advantage through positioning (positioning
in the industry)............................................................................................................................... 36
4.1 Positioning adopting to existing structure.......................................................................... 36
4.2 Gaining competitive advantage ......................................................................................... 44
4.3 Cases on positioning ......................................................................................................... 49
4.4 Reinterpreting “Positioning”: addressing the supply and demand side ............................. 53
4.5 Case of linking VP and VC ................................................................................................ 58
5 Theme 5: Blue Ocean Strategy – Business strategies in different industries and contexts
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(restructuring the industry) .......................................................................................................... 60
5.1 The principles of Blue Ocean Strategy.............................................................................. 61
5.2 Reconstructionist approach of Blue Ocean Strategy (KIM & MAUBORGNE)................... 63
5.3 Choosing the right Strategic Approach ............................................................................. 65
5.4 Examples of Blue Ocean Strategy .................................................................................... 66
6 Theme 6: Game Changing Management Innovation (New ways of Operating) ................ 74
6.1 Introduction ....................................................................................................................... 74
6.2 The importance of strategic innovation ............................................................................. 77
6.3 Disruptive innovation: a job to be done ............................................................................. 85
6.4 The advantage of big data – new digital business models................................................ 86
6.5 Artificial Intelligence .......................................................................................................... 90
6.6 Network effects ................................................................................................................. 95
6.7 Case: an AI driven company: Netflix ................................................................................. 97
7 Theme 7: A global strategy for international expansion .................................................. 100
7.1 Globalization ................................................................................................................... 100
7.2 Strategic Options for Entering and Competing in International Markets ......................... 106
7.3 Competing Internationally: The Three Main Strategic Approaches................................. 108
7.4 The Quest for Competitive Advantage in the International Arena ................................... 109
8 Theme 8: A Corporate Strategy beyond strategic units ................................................... 111
8.1 Mergers & acquisitions, strategic alliances and vertical or horizontal integration ........... 111
8.2 Creating value in a diversified firm .................................................................................. 115
8.3 Synergies among business units .................................................................................... 120
9 Theme 9: Strategy and Sustainability ................................................................................ 130
9.1 Introduction: global risks ................................................................................................. 130
9.2 Strategy and Sustainability.............................................................................................. 131
10 Theme 10: Strategy in Turbulent Times ......................................................................... 152
10.1 Good Strategy versus Bad Strategy................................................................................ 152
10.2 Strategy in Turbulent Times ............................................................................................ 153
10.3 How Game Theory can help to make good strategic choices ......................................... 157
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11 Summary ........................................................................................................................... 163
The quest of a competitive advantage
1 Theme 1: Introduction: What is strategy?
1.1 Strategic thinking
What is the essence of Strategic thinking & implementation?
Business is about solving a problem/challenge and how u deal with competitors. The start of
a new business is often a reaction to a competitor and their poor treatment of their customers
ex. Netflix
Strategy is about competing differently from rivals—
- Doing what they don’t do or doing it better!
- Doing what they can’t do!
- Doing that which sets the firm apart and attracts customers.
- Deciding what we should or should not do to produce a competitive edge.
- Can be described as adopting a particular position
But even more importantly: being unique (on your own terms) that allows you to deliver value to
customers who are willing to pay a proper price for your value proposition.
(Sometimes it’s easier being unique because u don’t have any competition)
1.2 Competitive advantage
Competitive Advantage
Meeting customer needs more effectively, with products or services that customers value
more highly, or more efficiently, at lower cost (in comparison with the company’s competitors)
Sustainable Competitive Advantage
Giving buyers lasting reasons to prefer a firm’s products or services over those of its
competitors
Strategic approach choices:
3
, lOMoARcPSD|2374147
Building Competitive Advantage
Differentiation on Focus on
Low-cost provider Focus on cost
features differentiation
market niche
market niche
- Low-cost provider vb. Aldi, Tesco
- Differentiation on features vb. Tesla, Porsche
1.3 The evolving nature of an organization’s strategy
Realized (current) strategy is a blend of:
- Proactive (deliberate) strategy elements that include both continued and new initiatives. You,
as an organization, come up with new ideas to fulfill needs the customers didn’t even know
they had.
- Reactive (emergent) strategy elements that are required due to unanticipated competitive
developments and fresh market conditions. Your organization for example follows the
competition.
Deliberateness vs. Emergence
EXAMPLE: HONDA IN THE USA IN 1950
Intended strategy: Honda tried to enter the US market in the 1950 wanting to compete with
Harley Davidson with their 150cc motorbike
Deliberate strategy: In this stage: what has been planned will be materialized. Turns out Honda
couldn’t compete with the Harley Davidson motorcycle because of multiple reasons (ex. it was not
4
, lOMoARcPSD|2374147
accustomed to the Californian weather). Honda needed to change their intended strategy to remain
relevant.
Realized strategy: A series of events made it so that a different type of Honda motor would be much
more to the liking of the US market. Honda switched up their strategy and became popular in the
US.
1.4 Businessmodel elements
The Customer Value Proposition
- Satisfying buyer wants and needs at a price customers will consider a good value.
- The greater the value provided (V or WTP) and the lower the price (P), the more attractive
the value proposition is to customers
The Profit Formula
- Creating a cost structure that allows for acceptable profits, given that pricing is tied to the
customer value proposition.
o V—the value provided to customers (V or WTP)
o P—the price charged to customers
o C—the firm’s costs
- The lower the costs (C) for a given customer value proposition (V–P), the greater the ability
of the business model to be a moneymaker.
Business = value creation
5
Samenvatting – Strategic Management
Table of contents
The quest of a competitive advantage .......................................................................................... 3
1 Theme 1: Introduction: What is strategy? ............................................................................. 3
1.1 Strategic thinking................................................................................................................. 3
1.2 Competitive advantage ....................................................................................................... 3
1.3 The evolving nature of an organization’s strategy............................................................... 4
1.4 Businessmodel elements .................................................................................................... 5
1.5 What makes a good strategy? ............................................................................................ 8
1.6 Definition of a strategy ...................................................................................................... 10
1.7 Levels of Leadership Influence ......................................................................................... 11
2 Theme 2: Organization Direction & External Analysis ....................................................... 11
2.1 Crafting a strategy: purpose and strategy ......................................................................... 11
2.2 An Industry or External Analysis ....................................................................................... 16
3 Theme 3: Internal Analysis: Resources, Capabilities and Competitive advantage ......... 26
3.1 Resources & Capabilities: the impact of resources & capabilities in firms ........................ 26
3.2 Understanding your internal position within the competitive setting.................................. 29
3.3 Strategy: focusing on distinctive capabilities (brand recognition)...................................... 33
3.4 Resources & Capabilities of strong strategic leaders: “Strategizing Distinctive Capabilities
33
3.5 A case ............................................................................................................................... 36
4 Theme 4: Generic strategies & Competitive advantage through positioning (positioning
in the industry)............................................................................................................................... 36
4.1 Positioning adopting to existing structure.......................................................................... 36
4.2 Gaining competitive advantage ......................................................................................... 44
4.3 Cases on positioning ......................................................................................................... 49
4.4 Reinterpreting “Positioning”: addressing the supply and demand side ............................. 53
4.5 Case of linking VP and VC ................................................................................................ 58
5 Theme 5: Blue Ocean Strategy – Business strategies in different industries and contexts
1
, lOMoARcPSD|2374147
(restructuring the industry) .......................................................................................................... 60
5.1 The principles of Blue Ocean Strategy.............................................................................. 61
5.2 Reconstructionist approach of Blue Ocean Strategy (KIM & MAUBORGNE)................... 63
5.3 Choosing the right Strategic Approach ............................................................................. 65
5.4 Examples of Blue Ocean Strategy .................................................................................... 66
6 Theme 6: Game Changing Management Innovation (New ways of Operating) ................ 74
6.1 Introduction ....................................................................................................................... 74
6.2 The importance of strategic innovation ............................................................................. 77
6.3 Disruptive innovation: a job to be done ............................................................................. 85
6.4 The advantage of big data – new digital business models................................................ 86
6.5 Artificial Intelligence .......................................................................................................... 90
6.6 Network effects ................................................................................................................. 95
6.7 Case: an AI driven company: Netflix ................................................................................. 97
7 Theme 7: A global strategy for international expansion .................................................. 100
7.1 Globalization ................................................................................................................... 100
7.2 Strategic Options for Entering and Competing in International Markets ......................... 106
7.3 Competing Internationally: The Three Main Strategic Approaches................................. 108
7.4 The Quest for Competitive Advantage in the International Arena ................................... 109
8 Theme 8: A Corporate Strategy beyond strategic units ................................................... 111
8.1 Mergers & acquisitions, strategic alliances and vertical or horizontal integration ........... 111
8.2 Creating value in a diversified firm .................................................................................. 115
8.3 Synergies among business units .................................................................................... 120
9 Theme 9: Strategy and Sustainability ................................................................................ 130
9.1 Introduction: global risks ................................................................................................. 130
9.2 Strategy and Sustainability.............................................................................................. 131
10 Theme 10: Strategy in Turbulent Times ......................................................................... 152
10.1 Good Strategy versus Bad Strategy................................................................................ 152
10.2 Strategy in Turbulent Times ............................................................................................ 153
10.3 How Game Theory can help to make good strategic choices ......................................... 157
2
, lOMoARcPSD|2374147
11 Summary ........................................................................................................................... 163
The quest of a competitive advantage
1 Theme 1: Introduction: What is strategy?
1.1 Strategic thinking
What is the essence of Strategic thinking & implementation?
Business is about solving a problem/challenge and how u deal with competitors. The start of
a new business is often a reaction to a competitor and their poor treatment of their customers
ex. Netflix
Strategy is about competing differently from rivals—
- Doing what they don’t do or doing it better!
- Doing what they can’t do!
- Doing that which sets the firm apart and attracts customers.
- Deciding what we should or should not do to produce a competitive edge.
- Can be described as adopting a particular position
But even more importantly: being unique (on your own terms) that allows you to deliver value to
customers who are willing to pay a proper price for your value proposition.
(Sometimes it’s easier being unique because u don’t have any competition)
1.2 Competitive advantage
Competitive Advantage
Meeting customer needs more effectively, with products or services that customers value
more highly, or more efficiently, at lower cost (in comparison with the company’s competitors)
Sustainable Competitive Advantage
Giving buyers lasting reasons to prefer a firm’s products or services over those of its
competitors
Strategic approach choices:
3
, lOMoARcPSD|2374147
Building Competitive Advantage
Differentiation on Focus on
Low-cost provider Focus on cost
features differentiation
market niche
market niche
- Low-cost provider vb. Aldi, Tesco
- Differentiation on features vb. Tesla, Porsche
1.3 The evolving nature of an organization’s strategy
Realized (current) strategy is a blend of:
- Proactive (deliberate) strategy elements that include both continued and new initiatives. You,
as an organization, come up with new ideas to fulfill needs the customers didn’t even know
they had.
- Reactive (emergent) strategy elements that are required due to unanticipated competitive
developments and fresh market conditions. Your organization for example follows the
competition.
Deliberateness vs. Emergence
EXAMPLE: HONDA IN THE USA IN 1950
Intended strategy: Honda tried to enter the US market in the 1950 wanting to compete with
Harley Davidson with their 150cc motorbike
Deliberate strategy: In this stage: what has been planned will be materialized. Turns out Honda
couldn’t compete with the Harley Davidson motorcycle because of multiple reasons (ex. it was not
4
, lOMoARcPSD|2374147
accustomed to the Californian weather). Honda needed to change their intended strategy to remain
relevant.
Realized strategy: A series of events made it so that a different type of Honda motor would be much
more to the liking of the US market. Honda switched up their strategy and became popular in the
US.
1.4 Businessmodel elements
The Customer Value Proposition
- Satisfying buyer wants and needs at a price customers will consider a good value.
- The greater the value provided (V or WTP) and the lower the price (P), the more attractive
the value proposition is to customers
The Profit Formula
- Creating a cost structure that allows for acceptable profits, given that pricing is tied to the
customer value proposition.
o V—the value provided to customers (V or WTP)
o P—the price charged to customers
o C—the firm’s costs
- The lower the costs (C) for a given customer value proposition (V–P), the greater the ability
of the business model to be a moneymaker.
Business = value creation
5
