4. Positioning the Organization

Question 1

4.2) Red Ocean Strategy: Corporate strategy

Matrix Types:

Answer 1

1) McKinsey Matrix:
- Industry Attractiveness; rigourous ind. analysis and rent earning
- Competitive Advantages; rigorous ind. analysis ans rent earning

2) BCG Matrix:
- Market Growth Rate
- Relative Sarket Share

a) Stars; invest/high
b) Cash Cows; skimming/hold
c) Question Marks; selection/expand
d) Poor Dogs; divesment/divest

Question 2

4.2) Red Ocean Strategy: Corporate strategy

What is a strategy?

Answer 2

“the essence of strategy is choosing what NOT to do. Strategy is creating fit among a company’s activities”

Question 3

4.2) Red Ocean Strategy: Corporate strategy

Responsiveness vs Synergy

Answer 3

Holding Comp | Common Core
Potatially unrelated | Closely related
BU responsiveness | Multi bussines synergy
Cash flow and risk opt. | Resource integration
Financial control | Strategy development
Capital allo. and control | Synergy management
Highly autonomous | Highly integrated
Low, incidental | High, structural
Sipmle to accomodate | Difficult to integrate

Question 4

4.2) Red Ocean Strategy: Corporate strategy

Diversifications Key Tests:

Answer 4

1) Attractiveness Test: attractiveness
2) The Cost to Entry Test: cost to entry
3) The Better-Off Test: gain comp. advn. from links to focal org.

Question 5

4.3) Red Ocean Strategy: Generic strategies

Generic Strategies by M. Porter

Answer 5

1) Differentiation
2) Cost Leadership
3) Focus

Question 6

4.3) Red Ocean Strategy: Generic strategies

Improving Cost Advantages

Answer 6

1) Economies of Learning: ımproved routines
2) Economies of Scale: specialization
3) Production Technics: process innovation
4) Product Design: standardizing design
5) Input Cost: location advn.
6) Capability Utilization: fixed variable cost
7) Residual Efficiency: org. slack/motivaiton/cult.

Question 7

4.3) Red Ocean Strategy: Generic strategies

External effects while choosing strategy

Answer 7

1) Resources and Capabilities: product design, process engineering
2) Organizational Requirements: tight cost control, detailed reports
3) Risk Factors: technological development, low costleraning by new comings

Question 8

4.3) Red Ocean Strategy: Generic strategies

Key questions for Differentiation Strategies

Answer 8

1) Customer Value Creation: providing something unique
2) Customer Segmentation: groping broad/narrow
3) Product Integrity: fit with customers values

Question 9

4.3) Red Ocean Strategy: Generic strategies

Unique Selling Points:

Answer 9

1) Tangible Differentiation:
- Technology, Performance, Design, Quality, Service
2) Intangible Differentiation:
- Customer Value, Image, Status, Emotions, Desire for exclusivity

Question 10

4.4) Blue Ocean Strategy

Blue ocean strategy based on:

Answer 10

Value Innovation:
- Reduce Costs
- Increase Buyers Value

Question 11

4.4) Blue Ocean Strategy

New Value Curves of Blue Ocean Strategy

Answer 11

1) Eliminate
2) Create
3) Reduce
4) Raise

Question 12

4.4) Blue Ocean Strategy

Change in Perspective (Paths)

Answer 12

1) Look across Alternative Industries
2) Look across Strategic Groups within Ind.
3) Look across Complemetary Product/Service
4) Look across Buyers Groups

Question 13

4.5) Result

Red Ocean vs Blue Ocean