2. Introduction to strategies

Question 1

What is strategy

Answer 1

• Defines company‘s distinctive approach to compete
• Is about making choices on how to distinguish youself
• What gives you advantages?
• Why are you going to win (not just an action)
• Specific

Question 2

Two main strategies

Answer 2

1. To be the best

2. To be unique (fulfill customer need and give customer value)

Question 3

Operational effectiveness VS stategy

Answer 3

• Operational effectiveness (best practice) is not strategy but you must be otherwise strategy doesnt matter
• Strategy (do things differently and create unique value)
• Strategy is about making choices

Question 4

Strategy characteristics

Answer 4

• Global: cant implement directly
• Ashieve goals
• Ill-defined problems: current problems and how to overcome
• Influenced by values
• Long term

Question 5

Definition of strategy

Answer 5

Global sets of activities to achieve corporate goals and striving for a
competitive advantage
- Corporate goals (direction , expectation) strategy leads to the goals

Question 6

Three main competative advantages

Answer 6

1. Cost leadership
2. Differentiation
3. Focus

Question 7

Four dimensions of internationalization strategies

Answer 7

1. Target market: Where
2. Market entry: How
3. Timing: When
4. Allication: How to carry out value

Question 8

ROIC

Answer 8

Return on invested capital

Varies between industries

Question 9

Portes five foreces framwork

Draw

Answer 9

Intensity of rivalry (industry copetitors) depends on

1. Threats of New Entrants (new entrants)
2. Bargaining power of buyers
3. Threat of substitutes
4. Suppliers

Question 10

Porter - Intensity of rivalry

Answer 10

Industry competitors

• Industry goals
• Diversity/nr competitios
• Exit barrieris

Growth rate of industry -> space for all operators at the market
Many operators often means high rivaly
Diversity different strategic behaviour -> different trademarks
Low diversity means high rivalty and can lead to price war

Question 11

Porter - Bargaining power of buyers

Answer 11

• bargaining power

- Price sencitive

Question 12

Porter - Threat of substitutes

Answer 12

• Relative price performance of substiutes
• Swishing cost( How easy is it to swish?)
• buyer propensity (how many has each one)

Question 13

Porter - Bargaining power of supplier

Answer 13

• Differentiation of inputs
• Threat of forward integration
• Supplier concentration

High price sensitivity? How much does other buy? Depending on importance of supplier (strategic, inreplaceble etc ex intel)

Question 14

Porter - Threat of new entry

Answer 14

• Ec of scale (lots of fixed costs)
• brand identity
• access to distribution
• government policy

Exclusive contracts with distribution channels makes entering a market hard

Question 15

Porters five forces - international perspective

Answer 15

The competing situation can be different in differnt countries (the five forces varies between each other and countries)
-> Need different strategy analysis.

Question 16

Internal analysis - Porter

Answer 16

Primary activites (increase value)

1. Logistic inbound
2. Operations
3. Outbound logistics
4. Marketing and sales
5. Service

Secondary Activites

1. Firm infrastructure
2. Human resource management
3. Technology development
4. Procurement

Question 17

Porter cost leader VS Differentiate

Answer 17

Porter explains how you can either be a cost leader of differentiate youself with value but today many companies mixes ex IKEA and Toyota (successful branding)