STRATEGIC MANAGEMENT
INHOUD
Theme 1: what is strategy? ...................................................................................................................5
the concept of strategy .....................................................................................................................5
what is the essence of strategic thinking & implementation.............................................................5
The quest for competitive advantage .............................................................................................6
Strategic approach choices ...........................................................................................................6
The evolving nature of an organizations strategy .............................................................................7
Business = value creation .............................................................................................................7
Business = creating + capturing economic value .............................................................................. 13
Examples of value creation ............................................................................................................. 17
Theme 2: organizational direction & external analysis .......................................................................... 19
Leadership crafting a strategy to guide the organization’s direction ................................................... 19
Purpose (WHY) and strategy ........................................................................................................ 19
Communicating the strategic vision/mission/values ..................................................................... 20
Stage 1: developing a strategic vision, a mission and a set of core values ....................................... 20
Communication the strategic vision ............................................................................................ 20
Crafting a mission statement ...................................................................................................... 21
Linking vision and mission with core values .................................................................................. 21
Purpose embedded in strategy .................................................................................................... 21
Stage 2: the two essential kinds of objectives to set ...................................................................... 22
Stage 3: the strategy-making hierarchy ........................................................................................ 22
Stage 4: executing the strategy .................................................................................................... 23
Who is involved in strategy making:.............................................................................................. 23
an industry or external analysis ....................................................................................................... 32
the components of an organisation’s macro environment ............................................................. 32
attractiveness of industries ............................................................................................................. 33
analyzing the industry: 5 forces of michael porter ............................................................................. 35
the five competitive forces .......................................................................................................... 36
pest analysis of industry ................................................................................................................. 39
does industry matter?..................................................................................................................... 40
the most common drivers of industry change ............................................................................... 40
industry dynamics .......................................................................................................................... 46
theme 3: internal analysis & competitive advantage ............................................................................. 48
How to use an organization’s resources and capabilities to gain competitive advantage? ................... 48
1
, evaluating a firm’s internal situation ............................................................................................ 48
indicators of strategic success .................................................................................................... 48
Key financial ratios ..................................................................................................................... 48
the impact of resources and capabilities in firms ............................................................................. 49
resources and capabilities .......................................................................................................... 49
what are the organization’s competitively important resources and capabilities............................. 50
identifying capabilities ................................................................................................................ 50
understanding your internal position within the competitive setting .................................................. 51
resource and capability anaylisis post-pandemic ......................................................................... 53
Resource and capability analysis ................................................................................................. 53
strategy: focusing on distinctive capabilities → brand recognition..................................................... 59
resources/capabilities of strong strategic leaders ............................................................................ 59
a case: ducati vs harley davidson .................................................................................................... 62
a case: yamaha vs steinway – nvidia – byd vs tesla ........................................................................... 66
theme 4: competitive advantage through positioning ........................................................................... 68
Positioning strategy ........................................................................................................................ 68
positioning through low cost: low-cost provider strategies ............................................................ 72
positioning through low cost: cost drivers .................................................................................... 73
positioning through differentiation: uniqueness drivers ................................................................. 75
strategy and competitive advantage ................................................................................................ 76
‘smart’ positioning ......................................................................................................................... 83
two other examples of ‘smart’ positioning........................................................................................ 88
demand and supply ........................................................................................................................ 90
positioning: taking advantage of supply and demand networks ......................................................... 95
theme 5: blue ocean strategy & non-disruptive innovation = ‘creating’ a new demand .......................... 101
Positioning: adapting to the industry & BMI → principles of ROS...................................................... 101
reconstructionist perspective: shaping the industry →principles of BOS ......................................... 101
the principles of non-disruptive strategic innovation: economic & social benefits ............................ 114
theme 6: the importance of innovation to sustain competitive advantage ............................................ 120
New ways of operating & game changing high tech innovation ........................................................ 120
ibm case ...................................................................................................................................... 123
the importance of strategic innovation .......................................................................................... 125
Advantage of first mover: Amazon.com ...................................................................................... 127
E-commerce ............................................................................................................................ 127
case: e-readers ............................................................................................................................ 129
strategic innovation: a job to be done ............................................................................................ 135
the advantage of big data → new digital business models ............................................................... 136
2
, artificial intelligence ..................................................................................................................... 138
how ai attemps to mimick our brain functioning ......................................................................... 139
a stylized representation of a neural net (ml) .............................................................................. 139
How do humans think? How does the ChatGPT “think”? ............................................................. 141
generative ai: what’s next? ........................................................................................................ 141
the use of gen ai – bcg ............................................................................................................... 142
can ai match human ingenuity in creative problem-solving ......................................................... 142
limitations of gen ai................................................................................................................... 142
theme 7: a global strategy for international expansion ........................................................................ 144
global strategies in the multinational corporation ........................................................................... 144
multinational companies: operating beyond national borders ..................................................... 144
why competing across national borders makes strategy more complex ....................................... 145
the diamond of national comparative advantage ........................................................................ 145
reasons for locating value chain activities for comparative advantage ......................................... 145
the impact of government policies and economic conditions in host countries ............................ 146
political and economic risks ...................................................................................................... 146
the risks of adverse exchange rate shifts .................................................................................... 146
cross-country differences in demographic, cultural and market conditions ................................. 146
strategic options for entering and competing in international markets ......................................... 148
case: why does microsoft acquire game companies ....................................................................... 149
case: ms expanding in gaming....................................................................................................... 149
players in the cloud industry ...................................................................................................... 149
three approaches for competing internationally ......................................................................... 150
case: m&a of united wardrobe by vinted: transnational, global or multidomestic?............................ 150
theme 8: a corporate strategy beyond strategic units ......................................................................... 153
strategic advantages for diversification in a multi-business corporation .......................................... 153
scope of operations .................................................................................................................. 153
dimenions of firm scope............................................................................................................ 153
Horizontal M&A strategies (A) .................................................................................................... 154
benefits of increasing horizontal scope ...................................................................................... 154
backwards integration towards suppliers ................................................................................... 154
integrating forward to enhance competitiveness ........................................................................ 155
strategic alliances & partnerships (c) ......................................................................................... 155
capturing the benefits of strategic alliances ............................................................................... 155
creating value in a diversified firm ................................................................................................. 156
synergies among business units? .................................................................................................. 160
better performance through synergy .......................................................................................... 160
3
, building shareholder value: a justification for diversification ....................................................... 167
choosing a diversification path: related vs unrelated business .................................................... 170
strategic fit, economies of scope and competitive advabtage (a) related diversification ................ 171
building shareholder value via (b) unrelated diversification ......................................................... 171
the drawbacks of unrelated diversification ................................................................................. 172
strategies for entering new businesses ...................................................................................... 172
case: walt disney.......................................................................................................................... 173
theme 9: strategy and sustainability .................................................................................................. 175
making a strategy work: governance, ethics & sustainability ........................................................... 175
strategy and sustainability ............................................................................................................ 182
opening case: the gulf of mexico disaster (2010) ......................................................................... 183
what do we mean by business ethics ......................................................................................... 183
corporate social responsibility, environmental sustainability & strategy ...................................... 185
corporate citizenship & stewardship: from smart to wise leadership ............................................... 188
corporate social responsibility ...................................................................................................... 190
the triple bottom line + esg ........................................................................................................ 191
strategic alignment between business objectives and societal goals ............................................... 197
theme 10: strategy in turbulent times ................................................................................................ 205
Realising strategy under extreme uncertainty ................................................................................. 205
good strategy vs bad strategy ........................................................................................................ 206
strategy in turbulent times ............................................................................................................ 210
case: rumble in the jungle – strategy in turbulent times ................................................................... 211
How game theory can help to make good strategic choices ............................................................ 213
4
INHOUD
Theme 1: what is strategy? ...................................................................................................................5
the concept of strategy .....................................................................................................................5
what is the essence of strategic thinking & implementation.............................................................5
The quest for competitive advantage .............................................................................................6
Strategic approach choices ...........................................................................................................6
The evolving nature of an organizations strategy .............................................................................7
Business = value creation .............................................................................................................7
Business = creating + capturing economic value .............................................................................. 13
Examples of value creation ............................................................................................................. 17
Theme 2: organizational direction & external analysis .......................................................................... 19
Leadership crafting a strategy to guide the organization’s direction ................................................... 19
Purpose (WHY) and strategy ........................................................................................................ 19
Communicating the strategic vision/mission/values ..................................................................... 20
Stage 1: developing a strategic vision, a mission and a set of core values ....................................... 20
Communication the strategic vision ............................................................................................ 20
Crafting a mission statement ...................................................................................................... 21
Linking vision and mission with core values .................................................................................. 21
Purpose embedded in strategy .................................................................................................... 21
Stage 2: the two essential kinds of objectives to set ...................................................................... 22
Stage 3: the strategy-making hierarchy ........................................................................................ 22
Stage 4: executing the strategy .................................................................................................... 23
Who is involved in strategy making:.............................................................................................. 23
an industry or external analysis ....................................................................................................... 32
the components of an organisation’s macro environment ............................................................. 32
attractiveness of industries ............................................................................................................. 33
analyzing the industry: 5 forces of michael porter ............................................................................. 35
the five competitive forces .......................................................................................................... 36
pest analysis of industry ................................................................................................................. 39
does industry matter?..................................................................................................................... 40
the most common drivers of industry change ............................................................................... 40
industry dynamics .......................................................................................................................... 46
theme 3: internal analysis & competitive advantage ............................................................................. 48
How to use an organization’s resources and capabilities to gain competitive advantage? ................... 48
1
, evaluating a firm’s internal situation ............................................................................................ 48
indicators of strategic success .................................................................................................... 48
Key financial ratios ..................................................................................................................... 48
the impact of resources and capabilities in firms ............................................................................. 49
resources and capabilities .......................................................................................................... 49
what are the organization’s competitively important resources and capabilities............................. 50
identifying capabilities ................................................................................................................ 50
understanding your internal position within the competitive setting .................................................. 51
resource and capability anaylisis post-pandemic ......................................................................... 53
Resource and capability analysis ................................................................................................. 53
strategy: focusing on distinctive capabilities → brand recognition..................................................... 59
resources/capabilities of strong strategic leaders ............................................................................ 59
a case: ducati vs harley davidson .................................................................................................... 62
a case: yamaha vs steinway – nvidia – byd vs tesla ........................................................................... 66
theme 4: competitive advantage through positioning ........................................................................... 68
Positioning strategy ........................................................................................................................ 68
positioning through low cost: low-cost provider strategies ............................................................ 72
positioning through low cost: cost drivers .................................................................................... 73
positioning through differentiation: uniqueness drivers ................................................................. 75
strategy and competitive advantage ................................................................................................ 76
‘smart’ positioning ......................................................................................................................... 83
two other examples of ‘smart’ positioning........................................................................................ 88
demand and supply ........................................................................................................................ 90
positioning: taking advantage of supply and demand networks ......................................................... 95
theme 5: blue ocean strategy & non-disruptive innovation = ‘creating’ a new demand .......................... 101
Positioning: adapting to the industry & BMI → principles of ROS...................................................... 101
reconstructionist perspective: shaping the industry →principles of BOS ......................................... 101
the principles of non-disruptive strategic innovation: economic & social benefits ............................ 114
theme 6: the importance of innovation to sustain competitive advantage ............................................ 120
New ways of operating & game changing high tech innovation ........................................................ 120
ibm case ...................................................................................................................................... 123
the importance of strategic innovation .......................................................................................... 125
Advantage of first mover: Amazon.com ...................................................................................... 127
E-commerce ............................................................................................................................ 127
case: e-readers ............................................................................................................................ 129
strategic innovation: a job to be done ............................................................................................ 135
the advantage of big data → new digital business models ............................................................... 136
2
, artificial intelligence ..................................................................................................................... 138
how ai attemps to mimick our brain functioning ......................................................................... 139
a stylized representation of a neural net (ml) .............................................................................. 139
How do humans think? How does the ChatGPT “think”? ............................................................. 141
generative ai: what’s next? ........................................................................................................ 141
the use of gen ai – bcg ............................................................................................................... 142
can ai match human ingenuity in creative problem-solving ......................................................... 142
limitations of gen ai................................................................................................................... 142
theme 7: a global strategy for international expansion ........................................................................ 144
global strategies in the multinational corporation ........................................................................... 144
multinational companies: operating beyond national borders ..................................................... 144
why competing across national borders makes strategy more complex ....................................... 145
the diamond of national comparative advantage ........................................................................ 145
reasons for locating value chain activities for comparative advantage ......................................... 145
the impact of government policies and economic conditions in host countries ............................ 146
political and economic risks ...................................................................................................... 146
the risks of adverse exchange rate shifts .................................................................................... 146
cross-country differences in demographic, cultural and market conditions ................................. 146
strategic options for entering and competing in international markets ......................................... 148
case: why does microsoft acquire game companies ....................................................................... 149
case: ms expanding in gaming....................................................................................................... 149
players in the cloud industry ...................................................................................................... 149
three approaches for competing internationally ......................................................................... 150
case: m&a of united wardrobe by vinted: transnational, global or multidomestic?............................ 150
theme 8: a corporate strategy beyond strategic units ......................................................................... 153
strategic advantages for diversification in a multi-business corporation .......................................... 153
scope of operations .................................................................................................................. 153
dimenions of firm scope............................................................................................................ 153
Horizontal M&A strategies (A) .................................................................................................... 154
benefits of increasing horizontal scope ...................................................................................... 154
backwards integration towards suppliers ................................................................................... 154
integrating forward to enhance competitiveness ........................................................................ 155
strategic alliances & partnerships (c) ......................................................................................... 155
capturing the benefits of strategic alliances ............................................................................... 155
creating value in a diversified firm ................................................................................................. 156
synergies among business units? .................................................................................................. 160
better performance through synergy .......................................................................................... 160
3
, building shareholder value: a justification for diversification ....................................................... 167
choosing a diversification path: related vs unrelated business .................................................... 170
strategic fit, economies of scope and competitive advabtage (a) related diversification ................ 171
building shareholder value via (b) unrelated diversification ......................................................... 171
the drawbacks of unrelated diversification ................................................................................. 172
strategies for entering new businesses ...................................................................................... 172
case: walt disney.......................................................................................................................... 173
theme 9: strategy and sustainability .................................................................................................. 175
making a strategy work: governance, ethics & sustainability ........................................................... 175
strategy and sustainability ............................................................................................................ 182
opening case: the gulf of mexico disaster (2010) ......................................................................... 183
what do we mean by business ethics ......................................................................................... 183
corporate social responsibility, environmental sustainability & strategy ...................................... 185
corporate citizenship & stewardship: from smart to wise leadership ............................................... 188
corporate social responsibility ...................................................................................................... 190
the triple bottom line + esg ........................................................................................................ 191
strategic alignment between business objectives and societal goals ............................................... 197
theme 10: strategy in turbulent times ................................................................................................ 205
Realising strategy under extreme uncertainty ................................................................................. 205
good strategy vs bad strategy ........................................................................................................ 206
strategy in turbulent times ............................................................................................................ 210
case: rumble in the jungle – strategy in turbulent times ................................................................... 211
How game theory can help to make good strategic choices ............................................................ 213
4
