STRATEGISCH MANAGEMENT
Inhoudsopgave
Topic 1: What is Strategy?..............................................................................6
What is strategy? (example Ryanair)..............................................................................6
Definition........................................................................................................................ 6
Choice of a future............................................................................................................ 6
Strategy statement...................................................................................................... 6
1. Objective.............................................................................................................. 6
2. Scope................................................................................................................... 6
3. “Competitive” Advantage.....................................................................................6
Characteristics............................................................................................................. 6
1. Uniqueness........................................................................................................... 6
2. Trade-offs (strategie = keuze van positive op frontier)........................................6
3. Fit – Coherence – Consistency..............................................................................6
Which decisions are strategic?.....................................................................................7
Figure........................................................................................................................... 7
Who does what for strategic decision-making?...............................................................7
Topic 2: Value Creation & Value Capture.........................................................8
Is value created by the business?...................................................................................8
Framework for Value Creation & Value Capture...........................................................8
Drivers of Value Creation.............................................................................................8
Is value captured by the business?.................................................................................9
Drivers of Capturing Value........................................................................................... 9
Capturing Value at a Moment in Time..........................................................................9
Identify fundamental metrics for measuring & evaluating the performance of the
business................................................................................................................... 9
From NOPAT to NOPLAT… an why that may be necessary, sometimes!...................9
Calculate key variable for evaluating: ROIC............................................................10
Definition Invested Capital......................................................................................... 10
Criteria for evaluating performance: Economic Value Added / Economic Profit..........11
1. Calculation.......................................................................................................... 11
2. How can EVA grow?............................................................................................ 11
Sustaining Value Capture over Time.............................................................................11
Free cash flow............................................................................................................ 11
Determination........................................................................................................ 11
Drivers of free cash flows.......................................................................................12
Drivers of value capture: ROIC and growth................................................................12
1. ROIC................................................................................................................... 12
2. Growth rate g..................................................................................................... 12
3. WACC................................................................................................................. 12
Enterprise Value with Perpetuity Formula...............................................................13
ROIC Strategic Curve.............................................................................................. 13
A strategy creates economic value….........................................................................13
Keys to capturing value............................................................................................. 14
1
, Distribution of Economic Profit...................................................................................14
Power Curve........................................................................................................... 14
Strategy and the Drivers of Enterprise Value................................................................14
Developing a Sustainable Competitive Advantage..........................................15
1. Understanding the Competitive Landscape............................................................15
2. Define the Scope of your Business.........................................................................15
3. Select the Activity set of your Business.................................................................15
4. Assemble the needed Resources and develop the key Capabilities.......................15
5. Set up the Business Model to link Value Creation and Value Capture and create a
Virtuous Cycle............................................................................................................ 15
6. Understand the Sustainability of your Competitive Advantage..............................15
7. Test your Strategy................................................................................................. 15
Topic 3: The Competitive Landscape..............................................................15
Strategy and the Drivers of Enterprise Value................................................................15
Industry Attractiveness.................................................................................................15
Average returns across Industries..............................................................................15
Porters’ 5-Forces Model.............................................................................................. 15
.................................................................................................................................. 15
The Industry Value System...........................................................................................16
Dynamics of Industries.................................................................................................. 16
Case study: Is U.S. Legal Marijuana Industry and attractive Industry............................16
The Industry Value System........................................................................................16
Focus on Cultivation/ growing: Is this an Attractive Business?...................................16
Waar wil je je het liefst positioneren & waarom?.......................................................16
Topic 4: Building Competitive Advantage.......................................................17
Competitive Advantage & Added Value........................................................................17
Defining Competitive Advantage...............................................................................17
Defining Added Value................................................................................................ 17
Types of Competitive Advantage...............................................................................17
1. Differentiate....................................................................................................... 17
2. Low-cost............................................................................................................. 17
3. Dual advantage:................................................................................................. 17
Choice between Strategic Positions...........................................................................17
Size and Scope of Wal-Mart.......................................................................................17
The “Ryanair Formula”............................................................................................... 18
Scope of a Business..................................................................................................... 18
Product & Customer Scope........................................................................................18
Product & Customer & Geographical Scope...............................................................18
Example: Dockers Khakis........................................................................................... 18
Understanding the Final Customer: Covering a Need – Digital Transformation..........18
What’s EW’s Business Scope?....................................................................................18
Where you Play.......................................................................................................... 18
Activity Analysis............................................................................................................ 19
1. Catalog the firm’s activities...................................................................................19
The Value Chain..................................................................................................... 19
2
, Analyzing the Value Chain......................................................................................19
Relocation and outsourcing: Global Value Chain....................................................19
Value Chains (Pipelines) vs Platforms.....................................................................19
2. Comparative Cost Analysis.....................................................................................20
Identify cost drivers................................................................................................ 20
Relative cost analysis:............................................................................................ 20
Important issues:.................................................................................................... 20
3. Activities & WTP..................................................................................................... 21
WTP: difficult to calculate.......................................................................................21
Customer needs & relative success........................................................................21
The Value Curve: a useful representation...............................................................21
4. Consider changes in activities to widen the wedge between Costs & WTP............21
Resources and Capabilities...........................................................................................22
Resources & Capabilities:........................................................................................... 22
1. Tangible.............................................................................................................. 22
2. Intangible........................................................................................................... 22
3. Organizational.................................................................................................... 22
From activities to capabilities different value activities require different capabilities 22
5 critical dimensions of capabilities...........................................................................22
Capabilities & Activities............................................................................................. 23
Resources, Capabilities and Value Creation – Value Capture.....................................23
Appraising the Strategic Importance of Resources & Capabilities..............................24
Key or Core Capabilities. Distinctive Capabilities Not all capabilities are equally
important for generating a Competitive Advantage...................................................24
Case study: Streaming Wars Netflix vs Disney..............................................................25
Defining Scope........................................................................................................... 25
Streaming Resources & Capabilities..........................................................................25
The Value Chain..................................................................................................... 25
Resource & Capability Assessment.........................................................................25
Competitive Advantage in Streaming?.......................................................................26
Determine Business Model............................................................................................26
What is Spotify’s........................................................................................................... 26
Value system?............................................................................................................ 26
Business Model?......................................................................................................... 26
Is streaming an Attractive Business?.........................................................................26
Topic 5: Sustaining Competitive Advantage...................................................27
Understand the Sustainability of your Competitive Advantage.....................................27
Threats to Sustainability (CR11).................................................................................27
1. Imitation............................................................................................................. 27
2. Substitution........................................................................................................ 27
3. Holdup................................................................................................................ 28
4. Slack................................................................................................................... 28
Test your Strategy........................................................................................................ 28
1. Internal consistency – coherence...........................................................................28
2. External consistency – coherence..........................................................................29
3. Dynamic consistency............................................................................................. 29
Topic 7: Corporate Strategy..........................................................................29
3
, Corporate strategy & Competitive Advantage...............................................................29
Defining Competitive Advantage...............................................................................29
Measuring Value Capture from Corporate Advantage................................................29
Defining Corporate or Parental Advantage.................................................................31
Examples................................................................................................................... 31
Corporate strategy Step 1: Building Portfolio of Businesses & Defining model for
Corporate Advantage.................................................................................................... 31
Brief History of Portfolio Management.......................................................................31
Growth/ Share Matrix (BCG)...................................................................................31
Industry Attractiveness/ Competitive Advantage (McKinsey)..................................31
Problems with Growth/ Share Matrix (BCG) or Industry Attractiveness/ Competitive
Advantage (McKinsey)............................................................................................ 31
Finding the Ideal Portfolio.......................................................................................... 32
Growth map: Horizons............................................................................................ 32
Growth Map Patterns.............................................................................................. 32
Value Based Portfolio Management...........................................................................33
1. “Better off” Test................................................................................................. 33
2. “Best Alternative” Test – Natural Owner.............................................................33
Value Adding or Subtracting......................................................................................33
1. Vertical............................................................................................................... 33
Horizontal............................................................................................................... 33
Case study: DEME Corporate Strategy..........................................................................33
Create & Capture Value in Dredging?........................................................................33
Should DEME develop the “Dredging+” strategy? Why (not)? Does it create
Corporate Advantage?............................................................................................... 33
Should DEME enter Offshore Wind?...........................................................................33
Corporate strategy Step 2: Designing your Group & Organizing for Corporate
Advantage..................................................................................................................... 34
Example Barco........................................................................................................... 34
Corporate Strategy & Structure.................................................................................34
Key challenge for a multi-business group..................................................................34
Conclusion..................................................................................................................... 34
Topic 8: Diversification Strategy...................................................................35
Distribution of S&P 500 companies by total returns to shareholders............................35
Emerging markets......................................................................................................... 35
Martin and Sayrak: What is the Puzzle..........................................................................35
Topic 9: Governance & Corporate Social Responsibility..................................36
Shareholder Value Perspective......................................................................................36
Value for whom?........................................................................................................ 36
“Purpose”...................................................................................................................... 36
Letter to CEO’s from Larry Flink, CEO BlackRock.......................................................36
Examples:.................................................................................................................. 36
What is Strategy? Choice of a Future............................................................................36
Papers: link between purpose (propositions) & value creation/ capture........................36
The Role of the Firm: Economic and Social Performance...............................................37
4
Inhoudsopgave
Topic 1: What is Strategy?..............................................................................6
What is strategy? (example Ryanair)..............................................................................6
Definition........................................................................................................................ 6
Choice of a future............................................................................................................ 6
Strategy statement...................................................................................................... 6
1. Objective.............................................................................................................. 6
2. Scope................................................................................................................... 6
3. “Competitive” Advantage.....................................................................................6
Characteristics............................................................................................................. 6
1. Uniqueness........................................................................................................... 6
2. Trade-offs (strategie = keuze van positive op frontier)........................................6
3. Fit – Coherence – Consistency..............................................................................6
Which decisions are strategic?.....................................................................................7
Figure........................................................................................................................... 7
Who does what for strategic decision-making?...............................................................7
Topic 2: Value Creation & Value Capture.........................................................8
Is value created by the business?...................................................................................8
Framework for Value Creation & Value Capture...........................................................8
Drivers of Value Creation.............................................................................................8
Is value captured by the business?.................................................................................9
Drivers of Capturing Value........................................................................................... 9
Capturing Value at a Moment in Time..........................................................................9
Identify fundamental metrics for measuring & evaluating the performance of the
business................................................................................................................... 9
From NOPAT to NOPLAT… an why that may be necessary, sometimes!...................9
Calculate key variable for evaluating: ROIC............................................................10
Definition Invested Capital......................................................................................... 10
Criteria for evaluating performance: Economic Value Added / Economic Profit..........11
1. Calculation.......................................................................................................... 11
2. How can EVA grow?............................................................................................ 11
Sustaining Value Capture over Time.............................................................................11
Free cash flow............................................................................................................ 11
Determination........................................................................................................ 11
Drivers of free cash flows.......................................................................................12
Drivers of value capture: ROIC and growth................................................................12
1. ROIC................................................................................................................... 12
2. Growth rate g..................................................................................................... 12
3. WACC................................................................................................................. 12
Enterprise Value with Perpetuity Formula...............................................................13
ROIC Strategic Curve.............................................................................................. 13
A strategy creates economic value….........................................................................13
Keys to capturing value............................................................................................. 14
1
, Distribution of Economic Profit...................................................................................14
Power Curve........................................................................................................... 14
Strategy and the Drivers of Enterprise Value................................................................14
Developing a Sustainable Competitive Advantage..........................................15
1. Understanding the Competitive Landscape............................................................15
2. Define the Scope of your Business.........................................................................15
3. Select the Activity set of your Business.................................................................15
4. Assemble the needed Resources and develop the key Capabilities.......................15
5. Set up the Business Model to link Value Creation and Value Capture and create a
Virtuous Cycle............................................................................................................ 15
6. Understand the Sustainability of your Competitive Advantage..............................15
7. Test your Strategy................................................................................................. 15
Topic 3: The Competitive Landscape..............................................................15
Strategy and the Drivers of Enterprise Value................................................................15
Industry Attractiveness.................................................................................................15
Average returns across Industries..............................................................................15
Porters’ 5-Forces Model.............................................................................................. 15
.................................................................................................................................. 15
The Industry Value System...........................................................................................16
Dynamics of Industries.................................................................................................. 16
Case study: Is U.S. Legal Marijuana Industry and attractive Industry............................16
The Industry Value System........................................................................................16
Focus on Cultivation/ growing: Is this an Attractive Business?...................................16
Waar wil je je het liefst positioneren & waarom?.......................................................16
Topic 4: Building Competitive Advantage.......................................................17
Competitive Advantage & Added Value........................................................................17
Defining Competitive Advantage...............................................................................17
Defining Added Value................................................................................................ 17
Types of Competitive Advantage...............................................................................17
1. Differentiate....................................................................................................... 17
2. Low-cost............................................................................................................. 17
3. Dual advantage:................................................................................................. 17
Choice between Strategic Positions...........................................................................17
Size and Scope of Wal-Mart.......................................................................................17
The “Ryanair Formula”............................................................................................... 18
Scope of a Business..................................................................................................... 18
Product & Customer Scope........................................................................................18
Product & Customer & Geographical Scope...............................................................18
Example: Dockers Khakis........................................................................................... 18
Understanding the Final Customer: Covering a Need – Digital Transformation..........18
What’s EW’s Business Scope?....................................................................................18
Where you Play.......................................................................................................... 18
Activity Analysis............................................................................................................ 19
1. Catalog the firm’s activities...................................................................................19
The Value Chain..................................................................................................... 19
2
, Analyzing the Value Chain......................................................................................19
Relocation and outsourcing: Global Value Chain....................................................19
Value Chains (Pipelines) vs Platforms.....................................................................19
2. Comparative Cost Analysis.....................................................................................20
Identify cost drivers................................................................................................ 20
Relative cost analysis:............................................................................................ 20
Important issues:.................................................................................................... 20
3. Activities & WTP..................................................................................................... 21
WTP: difficult to calculate.......................................................................................21
Customer needs & relative success........................................................................21
The Value Curve: a useful representation...............................................................21
4. Consider changes in activities to widen the wedge between Costs & WTP............21
Resources and Capabilities...........................................................................................22
Resources & Capabilities:........................................................................................... 22
1. Tangible.............................................................................................................. 22
2. Intangible........................................................................................................... 22
3. Organizational.................................................................................................... 22
From activities to capabilities different value activities require different capabilities 22
5 critical dimensions of capabilities...........................................................................22
Capabilities & Activities............................................................................................. 23
Resources, Capabilities and Value Creation – Value Capture.....................................23
Appraising the Strategic Importance of Resources & Capabilities..............................24
Key or Core Capabilities. Distinctive Capabilities Not all capabilities are equally
important for generating a Competitive Advantage...................................................24
Case study: Streaming Wars Netflix vs Disney..............................................................25
Defining Scope........................................................................................................... 25
Streaming Resources & Capabilities..........................................................................25
The Value Chain..................................................................................................... 25
Resource & Capability Assessment.........................................................................25
Competitive Advantage in Streaming?.......................................................................26
Determine Business Model............................................................................................26
What is Spotify’s........................................................................................................... 26
Value system?............................................................................................................ 26
Business Model?......................................................................................................... 26
Is streaming an Attractive Business?.........................................................................26
Topic 5: Sustaining Competitive Advantage...................................................27
Understand the Sustainability of your Competitive Advantage.....................................27
Threats to Sustainability (CR11).................................................................................27
1. Imitation............................................................................................................. 27
2. Substitution........................................................................................................ 27
3. Holdup................................................................................................................ 28
4. Slack................................................................................................................... 28
Test your Strategy........................................................................................................ 28
1. Internal consistency – coherence...........................................................................28
2. External consistency – coherence..........................................................................29
3. Dynamic consistency............................................................................................. 29
Topic 7: Corporate Strategy..........................................................................29
3
, Corporate strategy & Competitive Advantage...............................................................29
Defining Competitive Advantage...............................................................................29
Measuring Value Capture from Corporate Advantage................................................29
Defining Corporate or Parental Advantage.................................................................31
Examples................................................................................................................... 31
Corporate strategy Step 1: Building Portfolio of Businesses & Defining model for
Corporate Advantage.................................................................................................... 31
Brief History of Portfolio Management.......................................................................31
Growth/ Share Matrix (BCG)...................................................................................31
Industry Attractiveness/ Competitive Advantage (McKinsey)..................................31
Problems with Growth/ Share Matrix (BCG) or Industry Attractiveness/ Competitive
Advantage (McKinsey)............................................................................................ 31
Finding the Ideal Portfolio.......................................................................................... 32
Growth map: Horizons............................................................................................ 32
Growth Map Patterns.............................................................................................. 32
Value Based Portfolio Management...........................................................................33
1. “Better off” Test................................................................................................. 33
2. “Best Alternative” Test – Natural Owner.............................................................33
Value Adding or Subtracting......................................................................................33
1. Vertical............................................................................................................... 33
Horizontal............................................................................................................... 33
Case study: DEME Corporate Strategy..........................................................................33
Create & Capture Value in Dredging?........................................................................33
Should DEME develop the “Dredging+” strategy? Why (not)? Does it create
Corporate Advantage?............................................................................................... 33
Should DEME enter Offshore Wind?...........................................................................33
Corporate strategy Step 2: Designing your Group & Organizing for Corporate
Advantage..................................................................................................................... 34
Example Barco........................................................................................................... 34
Corporate Strategy & Structure.................................................................................34
Key challenge for a multi-business group..................................................................34
Conclusion..................................................................................................................... 34
Topic 8: Diversification Strategy...................................................................35
Distribution of S&P 500 companies by total returns to shareholders............................35
Emerging markets......................................................................................................... 35
Martin and Sayrak: What is the Puzzle..........................................................................35
Topic 9: Governance & Corporate Social Responsibility..................................36
Shareholder Value Perspective......................................................................................36
Value for whom?........................................................................................................ 36
“Purpose”...................................................................................................................... 36
Letter to CEO’s from Larry Flink, CEO BlackRock.......................................................36
Examples:.................................................................................................................. 36
What is Strategy? Choice of a Future............................................................................36
Papers: link between purpose (propositions) & value creation/ capture........................36
The Role of the Firm: Economic and Social Performance...............................................37
4
