lecture 1

Question 1

Origin of the word strategy

Answer 1

Stems from the army: Establishing a favorable position through effective use of resources

Question 2

Elements of successful strategies

Answer 2

consistent and long-term goals

Formulated based on analyses

Effectively exploit resources

Question 3

Business environment recent changes

Answer 3

Less predictable environment

Analytical reasoning necessary

Strategic positioning necessary

Question 4

Busines strategy

Definitions in the business context

Answer 4

An idea, a business concept, a plan

The search for a favourable competitive positioning

A thoughtful plan by a company to produce desired outcomes in the marketplace vis-a-vis customers, channel members and competitors

Question 5

Marketing strategy

Answer 5

A functional strategy aimed at customer value creating, market orientation, segmentation, targeting, and positioning

Decisions that involve selling products on the market

Other functional strategies in a firm include production strategy, financial strategy,…

Question 6

5 Ps that can be related to a strategic planning logic

Answer 6

Perspective (vision, mission, values)

Position (corporate strategy, business strategy)

Plan (ploy) (strategic goals, metrics and targets, strategic action programs)

Pattern (realized planning actions, emergent actions)

Question 7

Different events might act as stimuli for a company to rethink its strategy

Answer 7

International expansion

performance gap

Changes in ownership

Anticipated trends

new CEO or executive leadership team

interventions from external stakeholders

more unstable environment

Mergers and aquisitions

Question 8

strategy to develop a new product: Two successful factors

Answer 8

Relevance and uniqueness

Unique and relevant: relevant enough to survive in the long run, breakthrough

Unique, not relevant: customers dont need it, no repeat purchase, only product on the market

Not unique, relevant: customers need it, much tough competiton, tough to be profitable

Not unique, not relevant: same old things that nobody wants

Question 9

standardization strategy (e.g. mcdonalds)

Answer 9

anywhere the company operates, it offers identical food products such as mcnuggets, happymeal or fish fiilet

Question 10

Adaption stratagy (also e.g. mcdonalds)

Answer 10

Mcdonalds adapts to the needs of the consumers as required by the cultures of specific countries

Question 11

heuristics

Answer 11

are helpful in strategic management as they provide time pressured professionals with a simple way of dealing with a complex world

sometimes, however, heuristics lead to severe and systematic errors in decision making (people are typically unaware that they rely on heuristics)

Question 12

Moving to quantitative applications of entrepreneurship

Answer 12

moving from opinion-based or intuitive decision making (conceptual entrepreneurship) to data-based decision making (with an experience component) to make good decisions, you need to develop the right balance between intutive and data based decision making

Question 13

Two models of thinking

Answer 13

Intuitive thinking (system 1)
automatic, unconscious, quick, implicit, emotional and effortless

Reflective thinking (system 2)
Controlled, conscious, slow, explicit, logical and effortful

Question 14

Six principles describe the essentials of strategy for company practice

Answer 14

Quest for competitive advantage

Fit of markets and resources

Being different and making choices

Path to a destination

Multiple level and theme alignment

Consistnce in behavior

Question 15

Quest for competitive advantage
Principle 1

Answer 15

strategy is about gaining, sustaining and renewing competitive advantage to ensure superior performance

Strategies –> competitive advantage –> superior performance

Question 16

Fit of markets and resources
Principle 2

Answer 16

Strategy is about creating a dynamic “fit” between the company and its environment

Market based view of strategy (outside-in) + Resource based strategy (inside-out) = Dynamic perspective on markets and resources for competitive survival

Question 17

Being different and making choices

Principle 3

Answer 17

Strategy is about being different and choosing what to do and what not to do

mix of strategy (performing different activites from rivals) and operational excellence (performing similar activities better than rivals perform then)

if both high = superior performance

Question 18

Path to a destination
principle 4

Answer 18

strategy pursues the achievement of a desired long term aspiration - it is a means to an end

Mission and values today –> strategy –> vision

A companys vision, mission, and values represent its fundamental strategic intent and identity which guide strategy formulation

Question 19

consistency in behavior
principle 5

Answer 19

strategy is consistency in behavior, whether intended or not intended

Intended strategy –> unrealized strategy + deliberate strategy (patterns develop when existing intentions are reaized) + emergent strategy (patterns develop unplanned) –> realized strategy (consistend patterns in a stream of actions)

Question 20

Multiple level and theme alignment
Principle 6

Answer 20

strategy is the “symphony” that results form multiple areas and strategic themes in an organization

Corporate -> corporate/divisional strategy

Business -> SBU strategy/competitive strategy/ business models

Function -> Functional strategy (core and support functions)

Region -> regional/country strategy

Product/service -> product/service strategy

All this must be aligned

Question 21

There are different ways for easuring a companys performance

Answer 21

economic value

Accounting performance (profitability)

Economic performance and shareholder value

Corporate sustainability performance