📘 Strategic Management – Week 1: Strategy Basics
& Foundations
🧠 Why Study Strategy?
Strategic Management is the capstone of business education, tying together finance,
operations, marketing, and management. It teaches how organizations create and
maintain a sustainable competitive advantage in complex, dynamic environments.
Key questions:
● Why do companies act as they do?
● Why do some firms outperform others consistently?
● How should companies decide where to compete, and how?
🎯 Course Learning Goals (Overview)
● Know and define key strategic concepts (esp. in MNCs).
● Understand how internal & external factors influence performance.
● Evaluate corporate strategies across product, geographic, and partnership
dimensions.
● Explore the impact of politics on corporate strategy.
● Apply strategy tools (e.g., SWOT, Porter’s 5 Forces, Strategy Statements).
📍 Key Definitions
What is Strategy?
Strategy is the creation of a unique and valuable position through a
system of activities that are different from rivals (Porter, 1996).
Strategy is NOT:
● Operational effectiveness (doing things well).
, ● Best practices.
● Benchmarking.
● “Doing everything” (trying to be all things to all people).
🏛 Strategy Hierarchy
Level Key Question Who Leads It
Corporate Strategy Where to C-suite (CEO, CFO,
compete? etc.)
Business Strategy How to compete? Business unit leaders
Functional Area How to Marketing, Ops, HR
Strategy implement? leads
Operating Strategy Execution details Middle managers
⚒️ The Strategy Process (based on Dess et al. 2011)
1. Analysis (internal + external)
2. Decision (strategic choices)
3. Action (implementation)
Sustainable Competitive Advantage arises when a firm meets customer needs:
● More effectively (differentiation)
● Or more efficiently (cost leadership)
● Or in a way rivals cannot easily copy (unique system of activities)
, 🧭 Strategy as Positioning (Porter, 1996)
A firm can outperform rivals only by performing different activities, or
similar activities in different ways.
Porter outlines 3 sources of strategic positioning (quiz Q2):
1. Variety-based: Focused on the products/services offered
Example: Jiffy Lube (only oil changes)
2. Needs-based: Tailored to a specific group of customers
Example: IKEA (young, budget-conscious, design-savvy buyers)
3. Access-based: Based on how customers are reached
Example: Carmike Cinemas (small-town moviegoers)
Strategic positioning requires:
● Trade-offs (choosing what NOT to do)
● Fit (alignment of all activities)
● A unique system that rivals can’t copy easily
🔄 Operational Effectiveness vs. Strategy
Operational Strategy
Effectiveness
Doing the same things Doing different things
better
Best practices Unique position
Necessary, but not The core of long-term
sufficient success
& Foundations
🧠 Why Study Strategy?
Strategic Management is the capstone of business education, tying together finance,
operations, marketing, and management. It teaches how organizations create and
maintain a sustainable competitive advantage in complex, dynamic environments.
Key questions:
● Why do companies act as they do?
● Why do some firms outperform others consistently?
● How should companies decide where to compete, and how?
🎯 Course Learning Goals (Overview)
● Know and define key strategic concepts (esp. in MNCs).
● Understand how internal & external factors influence performance.
● Evaluate corporate strategies across product, geographic, and partnership
dimensions.
● Explore the impact of politics on corporate strategy.
● Apply strategy tools (e.g., SWOT, Porter’s 5 Forces, Strategy Statements).
📍 Key Definitions
What is Strategy?
Strategy is the creation of a unique and valuable position through a
system of activities that are different from rivals (Porter, 1996).
Strategy is NOT:
● Operational effectiveness (doing things well).
, ● Best practices.
● Benchmarking.
● “Doing everything” (trying to be all things to all people).
🏛 Strategy Hierarchy
Level Key Question Who Leads It
Corporate Strategy Where to C-suite (CEO, CFO,
compete? etc.)
Business Strategy How to compete? Business unit leaders
Functional Area How to Marketing, Ops, HR
Strategy implement? leads
Operating Strategy Execution details Middle managers
⚒️ The Strategy Process (based on Dess et al. 2011)
1. Analysis (internal + external)
2. Decision (strategic choices)
3. Action (implementation)
Sustainable Competitive Advantage arises when a firm meets customer needs:
● More effectively (differentiation)
● Or more efficiently (cost leadership)
● Or in a way rivals cannot easily copy (unique system of activities)
, 🧭 Strategy as Positioning (Porter, 1996)
A firm can outperform rivals only by performing different activities, or
similar activities in different ways.
Porter outlines 3 sources of strategic positioning (quiz Q2):
1. Variety-based: Focused on the products/services offered
Example: Jiffy Lube (only oil changes)
2. Needs-based: Tailored to a specific group of customers
Example: IKEA (young, budget-conscious, design-savvy buyers)
3. Access-based: Based on how customers are reached
Example: Carmike Cinemas (small-town moviegoers)
Strategic positioning requires:
● Trade-offs (choosing what NOT to do)
● Fit (alignment of all activities)
● A unique system that rivals can’t copy easily
🔄 Operational Effectiveness vs. Strategy
Operational Strategy
Effectiveness
Doing the same things Doing different things
better
Best practices Unique position
Necessary, but not The core of long-term
sufficient success
