Seminar 1: Introduction to Strategic Management

1. Reasons to go into a particular business:

- External environment / trends
- Internal expertise / capabilities / resources / knowledge
- Personal reasons / passion / interest
2. Todays competitive market
- Global economy
- New technological changes
- Globalisation
- Increase importance of knowledge and people
3. Strategic competitiveness
- Formulate and implement a superior value-creating strategy
o Lowest cost / highest quality / scope of products / market
served / relationship with suppliers and customers / build vs
acquisition / positioning / combi of above
- Strategy to achieve above-average performance and returns
- What will the firm do / dont do
- Competitive advantage
4. Vision, Mission and Values
5. 2 models of Strategic Decision Making
- Industry Organisation I/O Model (External)
o Market trend, market size, competitors etc.
- Resource-based Model (Internal)
o Skillset, expertise, knowledge, relationship etc.
6. I/O Model (External)
- General environment analysis: macro trends.
- Market / industry analysis: industry forces.
- Competitors analysis: competitors moves.
- Assumptions:
o Most firms compete within an industry (unlikely to be crossindustry).
o Controls similar relevant resources and pursuing similar
strategies.
o Resources are highly mobile across firms.
o Firms decision makers are rational and profit-maximising.
- E.g. airlines industry
7. Resource-based Model
- Identify resources (financial, tangible, intangible) and capabilities
(combi of resources to perform a task/activity).
- Conduct value chain analysis & resource-based framework.
- Determine core competencies (capabilities to achieve competitive
advantage).
- Assumptions:
o Firms acquire different resources.

Firms develop unique capabilities based on how they combine

and use resources.
o Resources and certain capabilities are not highly mobile across
firms (e.g. restraint of trade).
o Differences in resources and capabilities are the bases of
competitive advantage rather than its industrys structural
characteristics.
How resources become core competencies?
o Too costly / hard to imitate
o Rare (e.g. sugar example)
o Valuable
o Non-substitutable
o

8. 3
-

levels of strategies
Functional strategy (functional / departmental level).
Business strategy (e.g. cost leadership, differentiation, focus).
Corporate strategy (product diversification) & international strategy
(geographic diversification).
- All levels should be consistent & aligned to achieve effective strategy.

9. Classifications of stakeholders
- Capital market stakeholders: those that give money
- Product market stakeholders: users / buyers
- Organisation stakeholders: employees