Strategic Management

How to prepare for the exam? For each “case workshop,” we have been
focusing on major themes of strategic management and discussed central
models. Start there and identify these themes and models that will be the
starting point for questions at the oral session. Then look at the
connections between themes and models, look at the details, notice how
models and themes are discussed and developed in the articles and also
their relevance in the cases... all that will help you while you have your
major question and also during your follow-up possibilities.

Workshops
 Strategy workshop I: Theoretical foundations of strategic
management thinking & the purpose of strategy
 Strategy workshop II: Industry/sector analysis
 Strategy workshop III: Capabilities and rigidities in organizational
development
 Strategy workshop IV: Corporate governance, control and strategic
options & Business model innovation and renewal
Workshop I- Theoretical foundations of strategic
management thinking & the purpose of strategy

What is Strategy?
 Strategy is a blueprint and a determination of the long-term goals
and objectives of an enterprise.
 Strategy is a plan of actions that fit together to reach a clear
destination.
 It involves planning and making decisions that guide an
organization’s actions and resource allocation.
 Strategy is about setting long-term objectives, identifying
opportunities, and managing risks.
 It also encompasses the pursuit of competitive advantage, finding
unique ways to differentiate from competitors and create value for
customers.
 Strategy is not a static blueprint but a dynamic process that adapts
to internal and external changes, enabling organizations to navigate
uncertainties and seize opportunities.

What is Competitive Strategy?

 Competitive strategy is about being different.
 It means deliberately choosing a different set of activities to
deliver a unique mix of value.
 For example: IKEA: the global furniture retailer which has a clear
low cost strategy. Ikea targets young furniture buyers who want
style at low cost.
So, strategy is a firm’s theory about how to achieve or gain competitive
advantages.
Basic framework for Strategy Analysis- Strategic Fit
Strengths and Weakness: Organizational
Opportunities and Threats: Environmental

Strategy
Opportunities
Threats

Resources
Strengths,
Weakness
Structure Culture
So, strategy is a link between the Environment and the
Organization.
Strategy choosing to perform activities differently or to perform
different activities than rivals.
The ’Exploring Strategy’ Framework
 Strategic position: (external impact on strategy,
resources, capabilities, vision and goals) Macro –
environment,

 Strategic choices: (Direction, methods) Corporate

strategy, Business strategy, International,
Entrepreneurship, Acquisitions and Alliances

 Strategy in action: (how strategies formed and

implemented), Leading and changing, processes,
organizing, practice, evaluating

The core areas of corporate strategy. The three core

areas of corporate strategy are:
 Strategic analysis:
i. SWOT
ii. External Analysis, PESTELES
iii. Internal Analysis
iv. Five forces model
  Strategy formulation: (VMOST)
i. Vision
ii. mission
iii. objectives
iv. strategies include diversification, merger, and
acquisitions,
v. tactics: preparations for future technologies

 Strategy implementation.
i. The selected options have to be implemented.

5ps by Mintzberg’s theory

 5 +1 Ps of strategy: Plan, Ploy, Pattern, Position, Perspective and
Practice.
 Each “P” represents a different framework for organizations to
navigate or to eliminate the complexities of strategic
management.

Plan involves carefully crafted strategies, action plans, and milestones

that guide the organization towards its desired future state. It involves
the deliberate development and implementation of actions and goals to
achieve a specific objective.
Ploy brings attention to the tactical moves and maneuvers employed
to outmaneuver competitors, seize opportunities, or reshape the
industry landscape. It involves strategic actions designed to mislead or
influence competitors, customers, or stakeholders for the company’s
benefit. It helps to divert attention and resources away from
the Competitors.
Patterns: Organizations can identify their strengths, weaknesses, and
unique capabilities by analyzing the patterns in their behaviors and
performance. This insight helps shape future strategies and decision-
making.
Positions involve understanding market dynamics, customer
preferences, and industry trends to carve out a distinct position that
creates value and sustains competitive advantage. Positioning
strategies can focus on cost leadership, differentiation, or a niche
market approach, depending on the organization’s strengths and
market conditions. Example: IKEA. They focused on cost
minimization in operation Ikea designs its own low-cost, modular,
ready-to-assemble furniture. It’s a kind of “do it themselves,”
Customers are expected to do their pickup and delivery, and Ikea will even sell
you a roof rack for your car that you can return for a refund on your next visit.
So that they can offer furniture at the lowest cost to the customers.
Strategic positioning means performing different activities
from rivals or performing similar activities in different ways.
Perspective emphasizes the role of organizational culture, values,
and leadership in shaping strategic decisions. It recognizes that
strategy is not only a rational process but also influenced by subjective
viewpoints, beliefs, and organizational context. Perspective enables
organizations to adopt a holistic view, considering their purpose,
values, and long-term sustainability while making strategic choices.
Example: McDonald’s has effectively established a global brand by
understanding the cultural differences. McDonald’s India, don’t sell
beef. It’s a kind of illegal to sell beef in India. But we find beef in
Sweden.
Practice Focus inside the organization, to what people are doing at
the micro level that is influencing strategy.
Strategy is a multifaceted concept that encompasses various
perspectives, including plan, pattern, position, ploy, and
practice. Each perspective offers unique insights into how
companies navigate the complex business landscape.
Corporate Strategy and Business Level Strategy
The corporate strategy provides the guidelines for businesses to
achieve their long-term objectives. Corporate Strategy takes a
portfolio approach to strategic decision-making by looking across all
of a firm’s businesses to determine how to create the most
value. Corporate strategy is created based on the vision of the
organization. Corporate strategy is verbally expressed in the
company mission statement. Usually, in every organization, the top
management is responsible for establishing the corporate strategy.
Business Strategy highlights the market opportunities that the
business wants to explore, the steps for performing it, and the
resources required to put it into practice. It is formulated by the
middle-level management, which focuses on what’s more important
for the company to achieve the desired end.

Workshop II- Industry/sector analysis

Sector analysis serves to provide an investor with a judgment about how
well companies in the sector are expected to perform.
  BUSINESS LIFE CYCLE
 MACRO ECONOMIC FACTORS
 Like political, social, technological, ethical, sustainability,

Workshop III- Capabilities and rigidities in

organizational development

Workshop IV- Corporate governance, control

and strategic options & Business model
innovation and renewal
Ethics
Corporate social responsibility
 Business Models
 Poters 5 forces model
 Poters generic strategy such as cost leadership,
differentiation, cost focus strategy,
differentiation focus strategy
 Business Life Cycles
 SWOT
 Pesteles
 VRIO
 VUCA
 VUCA prime
 5+1ps
 Scenario Analysis
 Trend Analysis
 Internal
 External
 Resource Base View
 Blue Ocean Red Ocean
Blue Oceans are new market spaces where competition is
minimized. Blue Oceans contrast with ‘Red Oceans’, where
industries are already well defined and rivalry is intense. Blue
Oceans evoke wide empty seas.
Red Oceans are associated with bloody competition and ‘red
ink’, in other words, financial losses. The Blue Ocean concept is
thus useful for identifying potential spaces in the environment
with little competition. These Blue Oceans are strategic gaps in
the marketplace.