Strategic management
Lecture 1 - Introduction
Strategy: orchestrated, unified, integrated, and purposeful set of choices, commitments and activities
directed at achieving and sustaining above-average performance.
Strategic management: the formulation + execution of strategy
How can we achieve above-average returns?
(Industrial organization model)
,
Operational effectiveness: performing activities better, that is, faster, or with fewer inputs and defects that
rivals.
Why is operational effectiveness not strategy?
How to achieve operation effectiveness
- Outsourcing
- Reducing number of defects
- Business re-engineering or change management
,
Lecture 2 - Industry and Internal Analysis
Industry analysis
Industry = a group of firms producing similar products and competing for same resources and customers in
the marketplace.
- A product market includes goods or services with similar characteristics in terms of features, performance,
intended use and price.
Porter’s 5 forces model
1. Degree of rivalry
• Assessing industry characteristics, structure and therefore attractiveness.
• Industry level analysis, not firm level.
1. Market concentration
2. Low switching costs
3. Slow rate of industry growth
4. High exit barriers
5. Cost structure (e.g., high sunk costs)
6. Product differentiation
7. Competitors’ determination
8. Life cycle stage
2. Threat of new entrants
Lecture 1 - Introduction
Strategy: orchestrated, unified, integrated, and purposeful set of choices, commitments and activities
directed at achieving and sustaining above-average performance.
Strategic management: the formulation + execution of strategy
How can we achieve above-average returns?
(Industrial organization model)
,
Operational effectiveness: performing activities better, that is, faster, or with fewer inputs and defects that
rivals.
Why is operational effectiveness not strategy?
How to achieve operation effectiveness
- Outsourcing
- Reducing number of defects
- Business re-engineering or change management
,
Lecture 2 - Industry and Internal Analysis
Industry analysis
Industry = a group of firms producing similar products and competing for same resources and customers in
the marketplace.
- A product market includes goods or services with similar characteristics in terms of features, performance,
intended use and price.
Porter’s 5 forces model
1. Degree of rivalry
• Assessing industry characteristics, structure and therefore attractiveness.
• Industry level analysis, not firm level.
1. Market concentration
2. Low switching costs
3. Slow rate of industry growth
4. High exit barriers
5. Cost structure (e.g., high sunk costs)
6. Product differentiation
7. Competitors’ determination
8. Life cycle stage
2. Threat of new entrants
