Strategy Context Flashcards
The Industry Context: The issue of industry development
What are the drivers propelling industry development and what patterns do industries exhibit?
Dimensions
Which elements can be characterized, causing a shift in industry rules?
Paths
which development paths can be distinguished along the various dimensions?
Drivers
Which factors in the environment can change and influence the direction of the industry development?
Inhibitors
What are the sources of industry rigidity that oppose industry change?
Dimensions of Industry Development - Structural Dimensions
Convergence (Lufthansa) Divergence (Ryanair)
Concentration (K&L belongs to Air France)
Fragmentation (having lots different airlines)
vertical integration (integrate different business parts) horizontal fragmentation (having e.th separate)
international integration (Ethiad + AirBerlin to get landing permission) international fragmentation (having separate brands and markets)
expansion (use growing market) contraction (integrate or sell business parts)
Paths of Industry Development - patterns of dominant business model development
gradual development - equilibrium environment
continuous development - fluctuating equilibrium environment
discontinuous development - punctuated equilibrium environment
hyper competitive development - disequilibrium environment
Paths of Industry Development - Patterns of Dominant Business Model Development
Gradual Development
- one dominant business model
- gradual change
- relative stability
- advantage for established firms
continuous development
- frequent change of dominant business model
- changes relatively modest in size
- advantage for rapid adapters
discontinuous development
- one dominant business model
- radical change
- advantage for rule breakers
hypercompetitive development
- BM is frequently pushed aside
- no sustainable competitive advantage
- advantage for rule breakers
inhibitors of industry development - rigidity factors
underlying conditions industry factors (e.g. eco.of scales) inherent industry and change
industry integration
industries can be locked in to specific structure for a long period of time because to the complex linkage between various aspects
power structure
powerful industry incumbents have often much to lose and little to gain when the rules of the game change
risk averseness
rigidity of industry depends on risk averseness of different parties
industry recipes
common understanding of rule of game can limit peoples openness to rule changers
institutional pressures
given behavioral standards by any kind of institution is pressure on firms
Paradox of Industry Context
Firm Compliance
ability of companies to understand and adapt themselves to their environment
vs
Strategic Choice
ability to act without regarding the rules of the game
Perspectives of Industry Context
Industry dynamics
compliance, uncontrollable evolutionary process, adapt, environment select firms, fitness to industry demands, low, slow, convergence, dominant design, largely industry dependent
industry leadership
choice, controllable creation process, innovate, firms create fitting environment manipulation of industry, high, fast, divergence, new design, largely firm dependent
The organizational Context: the issue of organizational development
how can leaders get power and how and where can they exert it?
source of leadership influence
what are the sources that leaders can derive their influence from?
Levers of leadership influence
what are the generic ways for leaders to seek influence and where do they have to focus on?
arena’s of leadership influence
where do leaders need to direct their influence to in order to achieve strategic change?
Paradox of the organizational context
Paradox:
Control
ability of managers to shape their own future and that of their firm
Chaos
level of authority given in the employee to do things differently, weigh situations, solve problems and take initiatives
Perspective of the organizational context
organizational leadership
vs
organizational dynamics
The International Context: The issue of international configuration
How should the firm organize its activities across borders?
Dimensions of globalization
international Composition
- International Scope
- international distribution
levels of globalization
international Management
- three integration mechanism:
standardization, coordination, centralization
Paradox of international context
global synergy
ability to create value by leveraging resources, integrating activities and aligning product offerings across two or more countries
local responsiveness
ability to remain attuned to specific national markets demands, responding adequate and timely to unique characteristics
Perspectives of international context
global convergence
vs
international diversity
Drivers of Industry Development: External and internal drivers
SEPT: Socio-cultural, economic, technological, political/legal Drivers
Porter’s 5 Forces: Supplier, Buyer, New Entrants, Substitutes & Complementors
