Lecture 1

Question 1

What is strategy

Answer 1

Strategy is about making choice; it’s about deliberately choosing to be different

Use resources / be effective / establish favourable position

Question 2

Elements of successful strategies

Answer 2

Consistent and long term goals
Formulated based on Analyses
Effectively exploit resources

Question 3

Business environment has changed

Answer 3

Less predictable environment
Analytical reasoning
Strategic positioning

Question 4

The different views of strategy - 5Ps that can be related to a strategic planning logic

Answer 4

Perspective: vision / mission / values = strategic guideposts

Position = business strategy = corporate strategy

Plan = strategic goals: metrics and targets

Ploy: strategic actions programs

Pattern: realised planned actions / emerged actions

Question 5

Strategic examples of good strategies

Answer 5

Zara example of company with good strategy.
New designs can reach the stores in 3 weeks. If there is no demand for an item, Zara simply discontinued production. Shorter lead times (production also in Europe). Higher production costs but less advertising costs

Question 6

Strategic examples of companies with bad strategies

Answer 6

Kodak example of company with bad strategies:

Kodak had difficulties adapting to business circumstances. Kodak invented the roll film and was lead in the market. Kodak didn’t capture the full potential of digital photography on time

Question 7

What strategies to pursue (new product development)

Answer 7

Unique not revealing - customers don’t need it - no repeat purchase - only product on the market

Unique and relevant - relevant enough to survive in the long run - breakthrough

Not unique not relevant - the same old thing that nobody wants

Not unique but relevant - customer sneed it - much competition - tough to be profitable

Question 8

McDonald’s standardisation strategy

Answer 8

McDonalds standardisation strategy is anywhere the company operates, it offers identical food products such as McNuggets, happy meal etc

Question 9

Adaption strategy of McDonald’s

Answer 9

McDonalds adaption strategy is that McDonald’s adapts to the needs of the consumers as required by the cultures of specific countries

Question 10

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

Answer 10

International expansion 
Performance gap (unmet growth aspiration)
Changes in ownerships
Anticipated friends 
New ceo or leadership 
More unstable environment
Mergers and acquisitions

Question 11

Six principles to describe the essentials of strategy for company practice

Answer 11

1. Quest for competitive advantage
2. Fit of markets and resources
3. Being different and making choices
4. Path to a destination
5. Consistency in behaviour
6. Multiple level and theme alignment

Question 12

Quest for competitive advantage- 6principles

Answer 12

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

Competitive arena: strategies > competitive ad > superior performance

Question 13

Fit of markets and resources (6principles)

Answer 13

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

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

Question 14

Being different and making choices (6 principles)

Answer 14

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

Superior performance is high strategy (performing different activities from rivals)
And high operational excellence (performing similar activities better than rivals perform them)

Question 15

Path to a destination (6 principles)

Answer 15

Strategy pursues the achievement of a desires long term aspiration - it is a means to an end

Missions values > strategy > vision

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

Question 16

Consistency in behaviour (6principles)

Answer 16

Strategy is consistency in behaviour, whether intended (deliberate) or not intended (emergent)

Intended strategy > deliberate strategy (patterns develop when existing intentions are realised) > realised strategy (consistent pattern in a stream of actions)

Question 17

Multiple level and theme alignment (6 principles)

Answer 17

Strategy is the symphony that results from multiple areas and strategic themes in an organisation

I.e corporate - corporate / divisional strategy
> focus / diversification > integration >global

Or region - regional strategy
>market penetration > market development > subsidiary strategic roles

Question 18

There are different ways for measuring a company’s performance:

Answer 18

Ways to measure a company’s performance:
Economic value / accounting performance (profitability) / economic performance and shareholder value / corporate sustainability performance

Question 19

Two models of thinking

Answer 19

Two systems of modes of thinking in the brain are the cognitive foundations for any kind of decision making:

System 1: iniative thinking:
automatic / unconscious / quick / implicit / emotional / efforts

System 2: reflective thinking:
controlled / conscious / slow / explicit / logical / effortful

Question 20

Why not just use managerial

Intuition:

Answer 20

You wouldn’t just make managerial intuition because:

People and managers are poor at learning from experience
People have poor initiative sense for the value of information relative to the risk
People have limited ability to process information and make decisions

Question 21

Characteristics of strategic and operational decision making situations: there are fundamental differences between strategic and operational decision making situations
:

Answer 21

Strategic decisions (strategic management):
Focus: direction (what?)
Time horizon: long term
Impact: company wide; holistic 
Decision base: political 

Operational decisions (operational management); 
Focus: efficiency (how?) 
Time horizon: short term
Impact: subarea; partial
Decision base: technical