Strategic and

Competitiveness

What is Strategy
and
Why is it
Important?
Prof. Ir. Dana S.Saroso, MEngSc.
PhD.
https://danasaroso.wordpress.com/
Universitas Mercu Buana

Chapter Learning Objectives

1. Understand the role of business strategies in moving a
company in the intended direction, growing its business,
and improving its financial and market performance.
2. Develop an awareness of the four most reliable strategic
approaches for setting a company apart from rivals and
winning a sustainable competitive advantage.
3. Learn that business strategies evolve over time because
of changing circumstances and ongoing management
efforts to improve the companys strategy.
4. Understand why a companys strategy must underpinned
by a business model that produces revenues sufficient to
cover costs and earn a profit.
5. Gain awareness of the three tests that distinguish a
winning strategy from a so-so or flawed strategy.
6. Learn why good strategy and good strategy execution are
the most trustworthy signs of good management.
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Chapter Roadmap

What Do We Mean by Strategy?

Strategy and the Quest for Competitive Advantage
Identifying a Companys Strategy
Why a Companys Strategy Evolves Over Time
A Companys Strategy Is Partly Proactive and
Partly Reactive
Strategy and Ethics: Passing the Test of Moral
Scrutiny
The Relationship Between a Companys Strategy
and Its Business Model
What Makes a Strategy a Winner?
Why Are Crafting and Executing Strategy
Important?

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Strategy means making

clear-cut choices about
how to compete.

Jack Welch
Former CEO, General Electric

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Without a strategy the

organization is like a ship
without a rudder.
Joel Ross and Michael Kami

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Thinking Strategically: The Three

Big Strategic Questions
1. Bagaimana kondisi perusahaan saat ini?
2. Kemana perusahaan akan menuju?
Business(es) to be in and market positions to
stake out
Kebutuhan pembeli yang akan dipenuhi
Arah bisnis yang akan dituju

3. Bagaimana untuk mencapai tujuan?

Jawabannya adalah
sebuah strategy

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What Do We Mean By Strategy?

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The Hows That Define a Firm's Strategy

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Key Elements of a Successful Strategy

Strategi yang sukses bergantung kepada langkah
kompetitif yang:
Mampu menarik pembeli agar terpisah dari
pesaingnya
Mencoba untuk menciptakan posisi pasar
sendiri
Menciptakan kecirian / keunikan dalam rangka:
Menarik pelanggan dan
Memiliki produk unggul yang kompetitif

Copying competitive moves of other

successful companies rarely works!
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Starbucks: Visionary revolution

As Director of Marketing in 1982

Founded in 1971 small coffee bean
roaster and retailer
Knowledgeable staff.
Trip to Milan central component of
everyday Italian life
Within three years Howard Schultz bought
Starbucks from the originally owner
1987 transformation from coffee bean
importer to caffeine infused conglomerate
Between 1987 and 2007, Starbucks
opened on average two new stores every
day.
Planned to open a net of 900 new stores
outside of the United States in 2009

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Starbucks Strategy: The Key Elements

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Strategy and
Competitive Advantage

Tujuan utama dari strategi adalah untuk

membuat perusahaan dapat:

meningkatkan kinerja keuangannya

memperkuat posisi kompetitif pada pasar, dan
mencapai competitive advantage atas pesaing

Strategi yang tepat akan menghasilkan

perusahaan yang memiliki competitive
advantage, yang pada akhirnya akan
menghasilkan keuntungan diatas rata-rata
(above average returns)

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A Powerful Strategy Leads to

Sustainable Competitive Advantage

Perusahaan mencapai sustainable

competitive advantage bila:

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konsumen lebih memilih produk perusahaan

tsb dibandingkan produk dari pesaingnya
Keunggulan tsb berlangsung pada kurun
waktu yang panjang

Competitive Advantage

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Strategic Approaches to Building Sustainable

Competitive Advantage
Be the industrys low-cost provider
Achieve a cost-based competitive advantage

Incorporate differentiating features

Superior product/service keyed to higher quality,
better performance, wider selection, value-added
services, or some other attribute

Focus on a narrow market niche

Win a competitive edge by doing a
better job than rivals of serving the
needs and preferences of buyers in the niche

Develop expertise and resource strengths

not easily imitated or matched by rivals
Achieve a capabilities-based competitive advantage
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Competitive Advantage Examples

Strive to be industrys low-cost provider
Wal-Mart
Southwest Airlines

Outcompete rivals on a key differentiating feature

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Johnson & Johnson Reliability in baby products

Harley-Davidson King-of-the-road styling
Rolex Top-of-the-line prestige
BMW Engineering design and performance
Amazon.com Wide selection and convenience

Competitive Advantage Examples

(cont)

Focus on a narrow market niche

eBay Online auctions

Best Buy Home electronics
McAfee Virus protection
Starbucks Premium coffees and coffee drinks
The Weather Channel Info about the weather

Develop expertise, resource strengths, and

capabilities not easily imitated by rivals
Walt Disney Theme park management and family
entertainment
Dell Computer Build-to-order manufacturing capabilities
Ritz-Carlton Personalized customer service

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Figure 1.1: Identifying a Companys Strategy

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1-18

Why Do Strategies Evolve?

A companys strategy is a work in progress
Changes may be necessary to react to

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Financial crisis
Fresh moves of competitors
Evolving customer preferences
Technological breakthroughs

Emerging market opportunities

Changing political or economic climate
New ideas to improve strategy

What Is a Business Model?

Business model adalah: How do we make money in
this business?
Apakah strategi perusahaan mampu memberikan hasil yang
memuaskan kepada pelanggan (bottom-line results) ?

Apakah revenue-cost-profit economics

dari strategi memiliki good business sense?
Berdasarkan revenue streams dari
bisnis yang dijalankan
Berdasarkan cost structure dan profit
margins yang diperkirakan akan diperoleh
Apakah tingkat pendapatan dan ROI meng-indikasikan
adanya laba yang wajar?

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Relationship Between
Strategy and Business Model
Strategy . . .
Deals with a companys
competitive initiatives and
business approaches

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Business Model . . .
Concerns whether revenues
and costs flowing from the
strategy demonstrate a
business can be profitable
and viable

1-21

Business Model

Revenue
Stream

Key Partners

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Cost Structures

Starbucks: Visionary revolution

Born in 1953, live in Canarsie Brooklyn
The father was a high school dropped-out,
blue collar job
Football scholarship to Northern Michigan
University
In 2006 was rank 359 in the Richest
People in America
1988 providing health insurance for parttime employee (> 20 hours a week)
Happy employee means happy customers
Late 1990s spread all over the country,
In 1996 the 1st overseas branch in Tokyo
(even though it was not suggested by
their business consultant),
In 1999 open the branch in Forbidden City
Beijing China
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Starbucks: Business Model

Key Partners

Cost
Structures

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Revenue
Stream

Thank You

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