Lecture 1 - chapter 1 & 2 - strategy goals and performance
Mintzberg’s five p’s for strategy:
1. Plan: Consciously intended, plan before actions
2. Ploy: specific tactic / maneuver
3. Pattern: stream of actions, consistency
4. Position: niche in the environment
5. Perspective: shared norms and values, commitment
Porters five forces shaping competition in an industry
Mission: overall purpose of the organization → why does it exist, what business are
we in?
- Direction: defining the boundaries of strategic choices and actions
- Legitimization: convince stakeholders that the firm is pursuing valuable activities okay
- Motivation: inspiring individuals to work together in a particular way
Vision: the desired future state of the organization
- The aspirations on which strategists are trying to focus attention
- Relatively vague, details left out → like political promises
- General aim in line with the mission
- Current state → target → objective → vision
Classical framework of strategic management
, Grants version: emphasis on performance
Levels of strategy:
1. Network level: business B <> corporation T = Alliance P
2. Corporate level: business A <> business B <> business C = corporation X
3. Business level: HRM <> finance <> R&D <> marketing <> operations = business B
4. Functional level: Product <> price <> place <> promotion = marketing
Rumelt's criteria for evaluating strategy
1. Consistency: elements do not contradict each other
2. Consonance: an adaptive response to the environment
3. Advantage: tries to create a competitive advantage
4. Feasibility: does not overwhelm resources
,Lecture 2 - chapter 3 & 4 - industry and competitive analysis
PESTEL analysis (macro environment)
- Political / governmental: tax policy, trade restrictions
- Economic: economic growth, interest rates
- Socio-cultural: demographics, career attitudes
- Technological: rate of technological change
- Environmental: sustainability, global warming
- Legal: labor law, consumer rights, product labelling
First step: drawing industry boundaries
Firms face competition in two markets:
1. Upstream for your suppliers - buy necessary resources
2. Downstream for your buyers: target market segments
Strategy = seeking market imperfections
Porters five forces = micro environment
- Suppliers, substitutes, potential entrants, buyers and industry competitors (rivals)
Buyers power depends on: = Same for bargaining power of supplier but reversed
1. Buyers price sensitivity
a. Differentiation
b. Competition among buyers
c. Relation to buyers total costs
d. Critical to quality of buyers own output
2. Relative bargaining power
a. Size and concentration of buyers relative to sellers
b. Buyers information
c. Ability to integrate backwards
Threat of new entry: barriers to entry
, - Capital requirements
- Economies of scale
- Product differentiation
- Access to channels of distribution
Threat of substitutes:
- Buyers propensity to substitute
- The price performance characteristics of substitutes
Key success factors (KSF): characteristics of the industry
Strategic group analysis: map the patterns of rivalry within an industry
- Strategic groups
Mintzberg’s five p’s for strategy:
1. Plan: Consciously intended, plan before actions
2. Ploy: specific tactic / maneuver
3. Pattern: stream of actions, consistency
4. Position: niche in the environment
5. Perspective: shared norms and values, commitment
Porters five forces shaping competition in an industry
Mission: overall purpose of the organization → why does it exist, what business are
we in?
- Direction: defining the boundaries of strategic choices and actions
- Legitimization: convince stakeholders that the firm is pursuing valuable activities okay
- Motivation: inspiring individuals to work together in a particular way
Vision: the desired future state of the organization
- The aspirations on which strategists are trying to focus attention
- Relatively vague, details left out → like political promises
- General aim in line with the mission
- Current state → target → objective → vision
Classical framework of strategic management
, Grants version: emphasis on performance
Levels of strategy:
1. Network level: business B <> corporation T = Alliance P
2. Corporate level: business A <> business B <> business C = corporation X
3. Business level: HRM <> finance <> R&D <> marketing <> operations = business B
4. Functional level: Product <> price <> place <> promotion = marketing
Rumelt's criteria for evaluating strategy
1. Consistency: elements do not contradict each other
2. Consonance: an adaptive response to the environment
3. Advantage: tries to create a competitive advantage
4. Feasibility: does not overwhelm resources
,Lecture 2 - chapter 3 & 4 - industry and competitive analysis
PESTEL analysis (macro environment)
- Political / governmental: tax policy, trade restrictions
- Economic: economic growth, interest rates
- Socio-cultural: demographics, career attitudes
- Technological: rate of technological change
- Environmental: sustainability, global warming
- Legal: labor law, consumer rights, product labelling
First step: drawing industry boundaries
Firms face competition in two markets:
1. Upstream for your suppliers - buy necessary resources
2. Downstream for your buyers: target market segments
Strategy = seeking market imperfections
Porters five forces = micro environment
- Suppliers, substitutes, potential entrants, buyers and industry competitors (rivals)
Buyers power depends on: = Same for bargaining power of supplier but reversed
1. Buyers price sensitivity
a. Differentiation
b. Competition among buyers
c. Relation to buyers total costs
d. Critical to quality of buyers own output
2. Relative bargaining power
a. Size and concentration of buyers relative to sellers
b. Buyers information
c. Ability to integrate backwards
Threat of new entry: barriers to entry
, - Capital requirements
- Economies of scale
- Product differentiation
- Access to channels of distribution
Threat of substitutes:
- Buyers propensity to substitute
- The price performance characteristics of substitutes
Key success factors (KSF): characteristics of the industry
Strategic group analysis: map the patterns of rivalry within an industry
- Strategic groups
