Summary of all the lectures for Strategic Management (6012B0425Y), part of the minor Business Administration: Managing Strategy and Marketing at the University of Amsterdam
Week 6: corporate entrepreneurship and strategic renewal .................................................. 14
,Week 1: Strategic management and external analysis (ch. 1-2)
What is strategy?
Strategy
- A detailed plan for achieving success in situations such as war, politics, industry, or
support
- Or the skill of planning for such situations
- Porter’s definition: a strategy is the creation of unique and valuable position, involving
different set of activities
- Book’s definition: 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
Competitive advantage: when a firm implements a strategy competitors are unable to
duplicate of find too costly to try to imitate it
Operational effectiveness
Operational effectiveness: performing activities better (faster, with fewer resources and
defects) than rivals
- How
- Outsourcing
- Reducing the number of defects
- Business process reengineering or change management
- Difference with strategy → can be imitated easily by competitors
Strategic positioning
Strategic positioning: attempts to achieve sustainable competitive advantage by preserving
what is distinctive about a company by performing different activities from rivals, or
performing similar activities in different ways
- Variety-based positioning: based on the choice of product or service varieties rather
than specific customer segments (ex. 3M, wide range of glue products for different
segments)
- Needs-based positioning: serving most or all needs of a particular group of customers
(ex. Lululemon targets yoga-lovers, thinks what else would this segment need)
- Access-based positioning: segmenting customers who are accessible in different
ways (ex. How do I access my segment, ex. a small town grocery store)
Strategic positioning is not enough in itself in the long term unless a unique combination of
activities is created
- Trade-offs naturally emerge
- Strategy is about combining activities
- Activity fit is important
- Activities are reminders of the strategy
- Strategy without activities is just a statement
, Two underlying models
I/O model (industrial organisational model) → competitive advantage comes from outside
1. Analyse the external environment
2. Find an attractive industry
3. Formulate a strategy to develop required assets and implementing the strategy
Assumptions
- Resources are mobile
- Rational decision-making
- Firm strategies are similar in nature
- + Porter’s five forces
Resource-based view → competitive advantage comes from inside
1. Analyse the internal resources
2. Find an attractive industry that can be exploited by firm’s resources
3. Formulate and implement strategy to achieve above-average returns
How to identify opportunities and threats? → Analyse macro and industry environment
Macro environment
General environment analysis: identifying forces in the macro environment that are mostly
beyond a firm’s control → PESTLE analysis
- political/legal, economic, sociocultural, technological, demographic, global,
environmental
Scenario planning
1. Conduct a general environment analysis
2. Identify critical dimensions based on a degree of uncertainty and impact
3. Develop scenarios
4. Discuss how each scenario would impact company strategy
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