STRATEGIC
MANAGEMENT
Prof Bruno Cassiman
,Strategic management ................................................................................................................. 4
Topic 1: What is strategy? ............................................................................................................. 4
How is Ryanair been able to consistently outperform other airline companies? .................................. 5
Corporate strategy .......................................................................................................................... 8
Characteristics of strategy ............................................................................................................... 9
Which decisions are strategic?....................................................................................................... 10
Topic 2: Value creation & value capture ....................................................................................... 13
Is value created by the business? ................................................................................................... 13
Is value captured by the business? ................................................................................................. 17
Is value captured sustained by the business? ................................................................................. 17
Example Barco .............................................................................................................................. 19
Exercise: return on invested capital ................................................................................................ 26
Topic 3: The Competitive landscape, building and sustaining competitive advantage .................... 28
Step 1: understanding the competitive landscape ........................................................................... 28
The Competitive landscape ........................................................................................................... 28
Industry attractiveness .................................................................................................................. 30
Porter’s 5-forces model ................................................................................................................. 31
The industry value system.............................................................................................................. 31
Case Marijuana ............................................................................................................................. 33
Topic 4: Building Competitive Advantage ..................................................................................... 36
Defining competitive advantage ..................................................................................................... 36
Defining added value ..................................................................................................................... 37
Defining scope of a business ......................................................................................................... 39
Step 2: Define the scope of you business ........................................................................................ 40
What is EW’s Business Scope? The Wine business .......................................................................... 42
Defining the scope of a business: where you play? .......................................................................... 43
Step 3: Select the activity set of your business ................................................................................ 43
The value chain ............................................................................................................................. 43
Value chains (Pipelines) versus platforms ....................................................................................... 46
Cost drivers .................................................................................................................................. 47
Ryanair’s value curve..................................................................................................................... 48
2
, Activity analysis step 4: Consider changes in activities to widen the wedge between Costs and WTP . 49
Resources, capabilities and value creation – value capture ............................................................. 52
Step 5: Set up the Business Model to link value creation and value capture and create a Virtuous cycle
.................................................................................................................................................... 55
Topic 5: Sustaining Competitive Advantage ................................................................................. 58
Step 6: Understanding the Sustainability of your competitive advantage ........................................... 58
Step 7: Test your strategy ............................................................................................................... 63
Topic 6 ....................................................................................................................................... 66
Case: Roland Berger...................................................................................................................... 66
Case Ducati .................................................................................................................................. 68
Summary ...................................................................................................................................... 68
Case: Le pain quotidien ................................................................................................................. 72
Case: House of HR ........................................................................................................................ 76
Case Colruyt ................................................................................................................................. 77
Topic 7: Corporate Strategy ......................................................................................................... 79
Competitive advantage.................................................................................................................. 79
Corporate or parental advantage.................................................................................................... 81
Maersk 2015: Premium Conglomerate ........................................................................................... 82
Corporate strategy ........................................................................................................................ 84
Step 1: Building your portfolio of businesses and defining your model for corporate advantage (which
businesses makes sense to put together?) ..................................................................................... 84
Brief history of Portfolio management ............................................................................................. 84
The industry attractiveness-business strength matrix (McKinsey) ..................................................... 85
Value based portfolio management ................................................................................................ 89
Step 2: Designing your group and organizing for corporate advantage ............................................... 90
Case DEME ................................................................................................................................... 92
Topic 8: Diversification Strategy .................................................................................................. 95
Topic 9: Governance & Corporate Social Responsibility................................................................ 97
3
, Strategic management
Topic 1: What is strategy?
Strategy
It is a vague concept. It is used to connect an activity with creating profit (phase two from
the video). The way how the create value. Strategy is about the long-term performance of
the companies
“Everyone has a plan ‘till they get punched in the mouth.”
Mike Tyson, heavy weight champion.
A strategy is not only about having a plan, but also about handle unpredictability. A good
strategies takes in account this and gives a direction which is strong enough to be
adjusted when the environment changes.
Ryanair
It is one of the best airline companies in the world as they make huge profits. Although
there were some fluctuations like Covid, on the long run they kept a strong performance
for both their turnover as return.
But then, there rises a big question: how is Ryanair able to keep such a consistent strong
performance even though this is a very tough sector? This suggest they must have a very
thoughtful and sustained strategy.
They try to turn the plan around as fast as possible because it
is when the plane is flying that they are making money. Over
the years they changed some things though. First they only
operated in small airports where traOic was low and they were
able to take oO much faster, though in airports like Brussels
this is much more diOicult. They also implemented seat assignments, though this
increases the time of filling plans. And they do not allow connecting flights.
4
MANAGEMENT
Prof Bruno Cassiman
,Strategic management ................................................................................................................. 4
Topic 1: What is strategy? ............................................................................................................. 4
How is Ryanair been able to consistently outperform other airline companies? .................................. 5
Corporate strategy .......................................................................................................................... 8
Characteristics of strategy ............................................................................................................... 9
Which decisions are strategic?....................................................................................................... 10
Topic 2: Value creation & value capture ....................................................................................... 13
Is value created by the business? ................................................................................................... 13
Is value captured by the business? ................................................................................................. 17
Is value captured sustained by the business? ................................................................................. 17
Example Barco .............................................................................................................................. 19
Exercise: return on invested capital ................................................................................................ 26
Topic 3: The Competitive landscape, building and sustaining competitive advantage .................... 28
Step 1: understanding the competitive landscape ........................................................................... 28
The Competitive landscape ........................................................................................................... 28
Industry attractiveness .................................................................................................................. 30
Porter’s 5-forces model ................................................................................................................. 31
The industry value system.............................................................................................................. 31
Case Marijuana ............................................................................................................................. 33
Topic 4: Building Competitive Advantage ..................................................................................... 36
Defining competitive advantage ..................................................................................................... 36
Defining added value ..................................................................................................................... 37
Defining scope of a business ......................................................................................................... 39
Step 2: Define the scope of you business ........................................................................................ 40
What is EW’s Business Scope? The Wine business .......................................................................... 42
Defining the scope of a business: where you play? .......................................................................... 43
Step 3: Select the activity set of your business ................................................................................ 43
The value chain ............................................................................................................................. 43
Value chains (Pipelines) versus platforms ....................................................................................... 46
Cost drivers .................................................................................................................................. 47
Ryanair’s value curve..................................................................................................................... 48
2
, Activity analysis step 4: Consider changes in activities to widen the wedge between Costs and WTP . 49
Resources, capabilities and value creation – value capture ............................................................. 52
Step 5: Set up the Business Model to link value creation and value capture and create a Virtuous cycle
.................................................................................................................................................... 55
Topic 5: Sustaining Competitive Advantage ................................................................................. 58
Step 6: Understanding the Sustainability of your competitive advantage ........................................... 58
Step 7: Test your strategy ............................................................................................................... 63
Topic 6 ....................................................................................................................................... 66
Case: Roland Berger...................................................................................................................... 66
Case Ducati .................................................................................................................................. 68
Summary ...................................................................................................................................... 68
Case: Le pain quotidien ................................................................................................................. 72
Case: House of HR ........................................................................................................................ 76
Case Colruyt ................................................................................................................................. 77
Topic 7: Corporate Strategy ......................................................................................................... 79
Competitive advantage.................................................................................................................. 79
Corporate or parental advantage.................................................................................................... 81
Maersk 2015: Premium Conglomerate ........................................................................................... 82
Corporate strategy ........................................................................................................................ 84
Step 1: Building your portfolio of businesses and defining your model for corporate advantage (which
businesses makes sense to put together?) ..................................................................................... 84
Brief history of Portfolio management ............................................................................................. 84
The industry attractiveness-business strength matrix (McKinsey) ..................................................... 85
Value based portfolio management ................................................................................................ 89
Step 2: Designing your group and organizing for corporate advantage ............................................... 90
Case DEME ................................................................................................................................... 92
Topic 8: Diversification Strategy .................................................................................................. 95
Topic 9: Governance & Corporate Social Responsibility................................................................ 97
3
, Strategic management
Topic 1: What is strategy?
Strategy
It is a vague concept. It is used to connect an activity with creating profit (phase two from
the video). The way how the create value. Strategy is about the long-term performance of
the companies
“Everyone has a plan ‘till they get punched in the mouth.”
Mike Tyson, heavy weight champion.
A strategy is not only about having a plan, but also about handle unpredictability. A good
strategies takes in account this and gives a direction which is strong enough to be
adjusted when the environment changes.
Ryanair
It is one of the best airline companies in the world as they make huge profits. Although
there were some fluctuations like Covid, on the long run they kept a strong performance
for both their turnover as return.
But then, there rises a big question: how is Ryanair able to keep such a consistent strong
performance even though this is a very tough sector? This suggest they must have a very
thoughtful and sustained strategy.
They try to turn the plan around as fast as possible because it
is when the plane is flying that they are making money. Over
the years they changed some things though. First they only
operated in small airports where traOic was low and they were
able to take oO much faster, though in airports like Brussels
this is much more diOicult. They also implemented seat assignments, though this
increases the time of filling plans. And they do not allow connecting flights.
4
