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Lecture notes Strategic Management UvA 2023
Contents Page
Week 1: Strategic Management and External Analysis 2
Introduction 2
De nition of Strategy and Strategic Management 2
General Environmental Analysis 5
Industry Analysis 6
Week 1: Workgroup Notes 8
Example of Porters Five Forces Model (Nintendo)
Week 2: Internal Analysis and Resource Integration 9
Examining Internal Drivers of Strategy 9
Combining Internal and External Analysis 15
Integrating Internal and External Resources 16
Week 3: Rivalry, business-level Strategy, Corporate-level Strategy 18
Business-level Strategy 18
Corporate-level Strategy 22
Week 4: Leadership, Corporate Governance, Structure 27
Strategic Leadership 28
Corporate Governance 30
Organizational Structure 32
Week 5: Corporate Entrepreneurship and Strategic Renewal 34
Strategic entrepreneurship 34
Strategic renewal 35
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, 2
Week 1: Strategic Management and External Analysis
Learning goals
• Recognize strategic problems in practical situations
• Explain how organizations can develop strategies to e ectively deal with the demands of the
contemporary business environment.
• Analyze the external and internal environment of an organization at the business and
corporate level.
• Resolve basic strategic problems in practical situations
Course information
Slides + book and articles -> exam.
Articles can be found on: https://www.thecasecentre.org/
- Focus on fundamental points, you don’t have to know all the examples
Tutorial case assignments only for tutorial grade.
- Part A case questions (graded 1-10), Part B (pass/fail) re ection
- See guidelines document on canvas (what questions you have to focus on in re ection)
- Submit as one document -> re ection in powerpoint (note section)
- Re ection can also be about what you learned in the workgroup.
De nition of strategy and strategic management
What is strategy; Two de nitions
What comes to your mind when you hear the word strategy?
Game plan, method to achieve what you want. Objective -> achievement + method behind it.
Structure of idea and plan. Write down and talk about it.
Detailed plan of achieve succes in situations such as war politics industry or support, or the skill
of planning for such situations.
Nowadays we have more of a focus on skill (planning for such situations) a strategical way of
thinking. It is more abstract.
Porters de nition: Strategy is the creations of unique and valuable position involving a di erent
set of activities.
- Strategy is not just an idea but also HOW are you going to do that.
- Getting the best resources used to be the most important thing. If you captured the resources,
make it yours and sell it. Having a good strategy would mean protecting these resources.
- Example: Because you have the best mines, you are the preferred gold minor. This is about
positioning, the way you are perceived by competitors. Once you have a good name, you are
good.
Nowadays companies can develop their own resources.
De nition we will use:
Volberda et al: A strategy is an integrated and coordinated set of commitments, (decisions) and
actions designed to exploit and develop core competencies and gain a competitive advantage
Competitive advantage
unique selling position, di erentiation form competition. Acting in a way that is di erent
from competitors.
A rm has competitive advantage when it implements a strategy competitors are unable to
duplicate or nd it too costly to try to imitate it.
- Best engineers for examples (not able to imitate)
- Di erentiating from competitors to be preferred one.
Imitation: business models can be quite the same bol.com and amazon -> not willing to compete
with each other because they both have unique skills.
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Operational e ectiveness
Performing activities better (faster, with fewer inputs or defects) than rivals. This is di erent from
strategic positioning.
- Example: Toyota: better at spotting defects.
Why is it operational e ectiveness not strategy -> can be imitated. You can just hire competent
designers to get just as good a design/at spotting defects as competitors.
Strategic positioning
Strategic positioning attempts to achieve sustainable competitive advantage by presenting
by preserving what is distinctive about a company … (by) performing di erent activities from
rivals or performing similar activities in di erent ways.
Three sources (not mutually exclusive)
Strategy who are you going to target, which countries are your market. What are you going to
focus on as a company. Which one would help to get best position in the market.
1. Variety bases positioning
- Based on the choice of product or service varieties rather than speci c customer segments.
- Making decisions —> wide range of variety? Or target speci c need?
- Maybe many di erent products -> anybody can need something that you sell
2. Needs based positioning
- Serving most or all needs od a particular group of customers
- Customer segment; you have a speci c customer and think of their needs.
- Example: People who are into yoga -> care about mats and clothes, trap for yoga mat.
3. Acces based positioning
- Segmenting customers who are accessible in di erent ways
- Focus is acces channel; how are you going to acces a speci c group of customers.
- Example: Supermarket only in small town. Zoofy ( nding handyman) creating an online
platform to acces the people They don’t o er any speci c products. They just match
people
For making a decision in this you need to know the market.
Or when you rst focus on product and local market-> after the position will nd you (Korean skin
care)
In todays highly competitive and dynamic markets, strategic positioning is not enough in itself in
the long term. Unless a unique combination of activities is created (can be imitated as well).
- Trade o s naturally emerge
- Strategy is about combining activities
- Activity t is important
- Activities are reminders of the strategy
- Strategy without activities is just a statement
Two underlying models:
I/O Model
1. Analyze the external environment
2. Find an attractive industry
3. Formulate a strategy to develop required assets and implement the strategy
Assumptions I/O model
- Resources are mobile (goldmine company: you have resources and can move them easily)
- Now we know you can’t move resources -> if you have a good image you can’t just buy the
good image
- Rational decision-making
- Firm strategies are similar in nature
Porter’s ve forces; will be discussed in this lecture
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Resource based view
Will be discussed in week 2 + VRIN model
1. Analyse the internal resources
2. Find an attractive industry that can be exploited by rms resources
3. Formulate and implement strategy to achieve above average returns
Assumptions resource based view
- Heterogenous rm resources
- Immobile resources
- Rational decision-making
So the focus is more on internal resources. How can you develop products that are valuable, rare
and not easy to develop. If you can do this, while others can’t, you can het a good position.
Explaining succes
How much does succes come from external or internal resources? It internal/managerial
resources explain 36% and external 20%, but what about the rest? The models don’t explain all
the succes, 44% is left. The market is unpredictable, sometimes you are just lucky and can’t
explain succes.
This leaves room for innovation and entrepreneurship.
Example: sticky note was invented by luck; glue that makes paper stick but if you remove
it there isn’t glue left.
Building blocks of strategic management proces
fi fi
Lecture notes Strategic Management UvA 2023
Contents Page
Week 1: Strategic Management and External Analysis 2
Introduction 2
De nition of Strategy and Strategic Management 2
General Environmental Analysis 5
Industry Analysis 6
Week 1: Workgroup Notes 8
Example of Porters Five Forces Model (Nintendo)
Week 2: Internal Analysis and Resource Integration 9
Examining Internal Drivers of Strategy 9
Combining Internal and External Analysis 15
Integrating Internal and External Resources 16
Week 3: Rivalry, business-level Strategy, Corporate-level Strategy 18
Business-level Strategy 18
Corporate-level Strategy 22
Week 4: Leadership, Corporate Governance, Structure 27
Strategic Leadership 28
Corporate Governance 30
Organizational Structure 32
Week 5: Corporate Entrepreneurship and Strategic Renewal 34
Strategic entrepreneurship 34
Strategic renewal 35
fi
, 2
Week 1: Strategic Management and External Analysis
Learning goals
• Recognize strategic problems in practical situations
• Explain how organizations can develop strategies to e ectively deal with the demands of the
contemporary business environment.
• Analyze the external and internal environment of an organization at the business and
corporate level.
• Resolve basic strategic problems in practical situations
Course information
Slides + book and articles -> exam.
Articles can be found on: https://www.thecasecentre.org/
- Focus on fundamental points, you don’t have to know all the examples
Tutorial case assignments only for tutorial grade.
- Part A case questions (graded 1-10), Part B (pass/fail) re ection
- See guidelines document on canvas (what questions you have to focus on in re ection)
- Submit as one document -> re ection in powerpoint (note section)
- Re ection can also be about what you learned in the workgroup.
De nition of strategy and strategic management
What is strategy; Two de nitions
What comes to your mind when you hear the word strategy?
Game plan, method to achieve what you want. Objective -> achievement + method behind it.
Structure of idea and plan. Write down and talk about it.
Detailed plan of achieve succes in situations such as war politics industry or support, or the skill
of planning for such situations.
Nowadays we have more of a focus on skill (planning for such situations) a strategical way of
thinking. It is more abstract.
Porters de nition: Strategy is the creations of unique and valuable position involving a di erent
set of activities.
- Strategy is not just an idea but also HOW are you going to do that.
- Getting the best resources used to be the most important thing. If you captured the resources,
make it yours and sell it. Having a good strategy would mean protecting these resources.
- Example: Because you have the best mines, you are the preferred gold minor. This is about
positioning, the way you are perceived by competitors. Once you have a good name, you are
good.
Nowadays companies can develop their own resources.
De nition we will use:
Volberda et al: A strategy is an integrated and coordinated set of commitments, (decisions) and
actions designed to exploit and develop core competencies and gain a competitive advantage
Competitive advantage
unique selling position, di erentiation form competition. Acting in a way that is di erent
from competitors.
A rm has competitive advantage when it implements a strategy competitors are unable to
duplicate or nd it too costly to try to imitate it.
- Best engineers for examples (not able to imitate)
- Di erentiating from competitors to be preferred one.
Imitation: business models can be quite the same bol.com and amazon -> not willing to compete
with each other because they both have unique skills.
fiflfifi
ff fifi fi fl ff flff fl ff ff
, 3
Operational e ectiveness
Performing activities better (faster, with fewer inputs or defects) than rivals. This is di erent from
strategic positioning.
- Example: Toyota: better at spotting defects.
Why is it operational e ectiveness not strategy -> can be imitated. You can just hire competent
designers to get just as good a design/at spotting defects as competitors.
Strategic positioning
Strategic positioning attempts to achieve sustainable competitive advantage by presenting
by preserving what is distinctive about a company … (by) performing di erent activities from
rivals or performing similar activities in di erent ways.
Three sources (not mutually exclusive)
Strategy who are you going to target, which countries are your market. What are you going to
focus on as a company. Which one would help to get best position in the market.
1. Variety bases positioning
- Based on the choice of product or service varieties rather than speci c customer segments.
- Making decisions —> wide range of variety? Or target speci c need?
- Maybe many di erent products -> anybody can need something that you sell
2. Needs based positioning
- Serving most or all needs od a particular group of customers
- Customer segment; you have a speci c customer and think of their needs.
- Example: People who are into yoga -> care about mats and clothes, trap for yoga mat.
3. Acces based positioning
- Segmenting customers who are accessible in di erent ways
- Focus is acces channel; how are you going to acces a speci c group of customers.
- Example: Supermarket only in small town. Zoofy ( nding handyman) creating an online
platform to acces the people They don’t o er any speci c products. They just match
people
For making a decision in this you need to know the market.
Or when you rst focus on product and local market-> after the position will nd you (Korean skin
care)
In todays highly competitive and dynamic markets, strategic positioning is not enough in itself in
the long term. Unless a unique combination of activities is created (can be imitated as well).
- Trade o s naturally emerge
- Strategy is about combining activities
- Activity t is important
- Activities are reminders of the strategy
- Strategy without activities is just a statement
Two underlying models:
I/O Model
1. Analyze the external environment
2. Find an attractive industry
3. Formulate a strategy to develop required assets and implement the strategy
Assumptions I/O model
- Resources are mobile (goldmine company: you have resources and can move them easily)
- Now we know you can’t move resources -> if you have a good image you can’t just buy the
good image
- Rational decision-making
- Firm strategies are similar in nature
Porter’s ve forces; will be discussed in this lecture
fffifi fi ffff ff fi ffff ff fi fi fifi fi ff fi ff
, 4
Resource based view
Will be discussed in week 2 + VRIN model
1. Analyse the internal resources
2. Find an attractive industry that can be exploited by rms resources
3. Formulate and implement strategy to achieve above average returns
Assumptions resource based view
- Heterogenous rm resources
- Immobile resources
- Rational decision-making
So the focus is more on internal resources. How can you develop products that are valuable, rare
and not easy to develop. If you can do this, while others can’t, you can het a good position.
Explaining succes
How much does succes come from external or internal resources? It internal/managerial
resources explain 36% and external 20%, but what about the rest? The models don’t explain all
the succes, 44% is left. The market is unpredictable, sometimes you are just lucky and can’t
explain succes.
This leaves room for innovation and entrepreneurship.
Example: sticky note was invented by luck; glue that makes paper stick but if you remove
it there isn’t glue left.
Building blocks of strategic management proces
fi fi
