KU LEUVEN · FACULTY OF ECONOMICS AND BUSINESS
Strategic
Management
Study Summary – Full Course Material · D0R04a · Prof. Dr. Bruno Cassiman
Content Structure
Topics 1–10, Cases, Quizzes Intuition → Concept → Framework → Exam Tip
Exam format Grade breakdown
Written, closed book, 2.5 hours Q1 /6 · Q2 /4 · Q3 /4 · Q4 /10 · Q5 /26
Table of Contents
T1 What is Strategy? T6 Bringing it Together (Cases)
T2 Value Creation & Capture T7 Corporate Strategy
T3 The Competitive Landscape T8 Diversification Strategy
T4 Building Competitive Advantage T9 Governance & CSR / Purpose
T5 Sustaining Competitive Advantage T10 Strategic Process & Execution
★ Cheatsheet & Formula Box ★ Exam Strategy
,TOPIC 1 What is Strategy?
Strategy is not simply a goal or action plan — it is the binding narrative that determines
how all decisions within an organisation are aligned. The core question: what is "phase
2"?
Definition
CORE DEFINITION
Strategy = the choice of a future for the organisation and a way to reach that future, as the
framework that coordinates, unifies and integrates all decisions and actions, positioning the firm to
generate superior long-run returns.
(Collis & Rukstad: Objective + Scope + Competitive Advantage)
Mission & Vision
MISSION VS. VISION
MISSION — WHY WE EXIST VISION — WHERE WE'RE HEADED
Describes the fundamental purpose of the Describes the desired future: what the
organisation: for whom, what, why. Timeless; organisation looks like in 5-10 years. Inspires
guides daily decisions. and guides strategic choices.
When to revise strategy?
7 SITUATIONS REQUIRING STRATEGY REVISION
• Poor results: ROIC < WACC over a sustained period
• Under-utilised potential: resources & capabilities not fully exploited
• Major changes in technology, markets or competition
• New opportunities: untapped markets or capabilities
• Large investment decision requires strategic recommitment
• Threatened advantage: imitation, substitution or holdup eroding position
• New management or shareholders with different priorities
, Why is strategy valuable? (Van den Steen, 2017)
Strategy is only valuable when coordination is needed. Without it, each actor optimises locally,
resulting in a sub-optimal overall outcome.
VAN DEN STEEN: STANDALONE VS. INTERACTION VALUE
STANDALONE VALUE (α) INTERACTION VALUE (γ)
What does decision X yield if taken Extra value when other decisions align. With
independently? C1,C2,C3 and γ21=γ31=γ32=0.8: without
α1=0.8 · α2=0.3 · α3=0.1 strategy payoff=1.2; announcing C1 → all align
→ payoff=2.4.
What strategy is NOT
COMMON MISTAKES ("BAD STRATEGY")
• Operational effectiveness (everyone getting better ≠ strategy)
• Benchmarking or copying "best practices"
• Treating SWOT analysis as an endpoint
• Confusing goals with strategy
• Vague, woolly objectives
• Being unwilling to make trade-offs
Strategy Statement (Collis & Rukstad)
A good strategy statement contains three elements:
1. Objective — what do we want to achieve?
2. Scope — where do we compete (customer, product, geography, vertical)?
3. Competitive Advantage — how do we win?
EXAMPLE
Ryanair: "Achieve the lowest-cost position in the airline industry to offer the lowest fares to
price-conscious European travellers via spartan service, high capacity utilisation and high-powered
incentives."
Tesla (2006): (1) Build sports car, (2) use revenue for affordable model, (3) use that for even
cheaper model, (4) provide zero-emission power generation.
♦ EXAM TIP
Typical question: "Is SWOT a strategy?" → No. SWOT is an analysis tool. Strategy requires choices
and trade-offs. Know the 7 situations requiring revision. Irreversibility does not make a decision
more strategic, but makes strategy more valuable (commitment effect).
Strategic
Management
Study Summary – Full Course Material · D0R04a · Prof. Dr. Bruno Cassiman
Content Structure
Topics 1–10, Cases, Quizzes Intuition → Concept → Framework → Exam Tip
Exam format Grade breakdown
Written, closed book, 2.5 hours Q1 /6 · Q2 /4 · Q3 /4 · Q4 /10 · Q5 /26
Table of Contents
T1 What is Strategy? T6 Bringing it Together (Cases)
T2 Value Creation & Capture T7 Corporate Strategy
T3 The Competitive Landscape T8 Diversification Strategy
T4 Building Competitive Advantage T9 Governance & CSR / Purpose
T5 Sustaining Competitive Advantage T10 Strategic Process & Execution
★ Cheatsheet & Formula Box ★ Exam Strategy
,TOPIC 1 What is Strategy?
Strategy is not simply a goal or action plan — it is the binding narrative that determines
how all decisions within an organisation are aligned. The core question: what is "phase
2"?
Definition
CORE DEFINITION
Strategy = the choice of a future for the organisation and a way to reach that future, as the
framework that coordinates, unifies and integrates all decisions and actions, positioning the firm to
generate superior long-run returns.
(Collis & Rukstad: Objective + Scope + Competitive Advantage)
Mission & Vision
MISSION VS. VISION
MISSION — WHY WE EXIST VISION — WHERE WE'RE HEADED
Describes the fundamental purpose of the Describes the desired future: what the
organisation: for whom, what, why. Timeless; organisation looks like in 5-10 years. Inspires
guides daily decisions. and guides strategic choices.
When to revise strategy?
7 SITUATIONS REQUIRING STRATEGY REVISION
• Poor results: ROIC < WACC over a sustained period
• Under-utilised potential: resources & capabilities not fully exploited
• Major changes in technology, markets or competition
• New opportunities: untapped markets or capabilities
• Large investment decision requires strategic recommitment
• Threatened advantage: imitation, substitution or holdup eroding position
• New management or shareholders with different priorities
, Why is strategy valuable? (Van den Steen, 2017)
Strategy is only valuable when coordination is needed. Without it, each actor optimises locally,
resulting in a sub-optimal overall outcome.
VAN DEN STEEN: STANDALONE VS. INTERACTION VALUE
STANDALONE VALUE (α) INTERACTION VALUE (γ)
What does decision X yield if taken Extra value when other decisions align. With
independently? C1,C2,C3 and γ21=γ31=γ32=0.8: without
α1=0.8 · α2=0.3 · α3=0.1 strategy payoff=1.2; announcing C1 → all align
→ payoff=2.4.
What strategy is NOT
COMMON MISTAKES ("BAD STRATEGY")
• Operational effectiveness (everyone getting better ≠ strategy)
• Benchmarking or copying "best practices"
• Treating SWOT analysis as an endpoint
• Confusing goals with strategy
• Vague, woolly objectives
• Being unwilling to make trade-offs
Strategy Statement (Collis & Rukstad)
A good strategy statement contains three elements:
1. Objective — what do we want to achieve?
2. Scope — where do we compete (customer, product, geography, vertical)?
3. Competitive Advantage — how do we win?
EXAMPLE
Ryanair: "Achieve the lowest-cost position in the airline industry to offer the lowest fares to
price-conscious European travellers via spartan service, high capacity utilisation and high-powered
incentives."
Tesla (2006): (1) Build sports car, (2) use revenue for affordable model, (3) use that for even
cheaper model, (4) provide zero-emission power generation.
♦ EXAM TIP
Typical question: "Is SWOT a strategy?" → No. SWOT is an analysis tool. Strategy requires choices
and trade-offs. Know the 7 situations requiring revision. Irreversibility does not make a decision
more strategic, but makes strategy more valuable (commitment effect).
