Lecture III –

Strategic Management
Dr. Hauke Laackmann

Jacobs University Bremen

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 Course Outline I

• 09/02/2019 – Lecture 19:15 / 22:00: Foundations of Strategic Management

• 09/09/2019 – Lecture 19:15 / 22:00: Strategy Maps / Workshop Strategy Development
• 09/16/2019 - Lecture 19:15 / 22:00: Corporate Ambition / Target Development
• 09/23/2019 - Lecture 19:15 / 22:00: Corporate Strategy Process
• 09/30/2019 – Lecture 19:15 / 22:00:
• 10/07/2019 – Lecture 19:15 / 22:00: cancelled
• 10/14/2019 – Lecture 19:15 / 22:00: cancelled
• 10/21/2019 – Lecture 19:15 / 22:00: Corporate Parenting Strategy and Organization
• 10/28/2019 – Lecture 19:15 / 22:00: Corporate Financial Strategy / KPI Development

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 Course Outline II
• 11/04/2019 – Lecture 19:15 / 22:00: Strategic Management Tools & Concepts (I)
• 11/11/2019 – Lecture 19:15 / 22:00: Strategic Management Tools & Concepts (II)
• 11/18/2019 – Lecture 19:15 / 22:00: cancelled
• 11/25/2019 – Lecture 19:15 / 22:00: Case Studies
• 12/02/2019 – Lecture 19:15 / 22:00: Exam preparations
• 12/09/2019 – 12/21/2019 Exam (final date needs to be defined)*
• 01/20/2020 – 01/31/2020 Make up exam (final date needs to be defined)*

*60% of the grade composition

**40% of the grade composition

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Contact details:

Dr. Hauke Laackmann

Mail: h.laackmann@jacobs-university.de

Mobile (in urgent cases): 0049 172 189 24 24

Time schedule:

7:15 pm – start

8:45 pm – 9:00 pm break

10:00 pm - end

Please vote/select a course speaker…

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 Course User Story:



As Jacobs Students we want to learn more
about how to apply and actively use
strategic approaches, so that we can
successfully contribute to the organizations
growth.

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Takeaways from past session
• Define a Business Modell Canvas for your innovative product
• Follow the four steps:
1. What business are we in and why? (Mission, vision, and values)
-> Define a vision-, mission-statement and some core values for the company
2. What are the key issues that our strategy must address? (Strategic analysis)
-> Analyze the relevant dimensions roughly by using your familiar tools
3. Where are we going? (Strategic goals)
-> Define strategic goals for your company
4. How can we best compete? (Strategy formulation)
-> Define and create a Strategy Map for your company which provides stringency and follows
the scenario your have defined as most suitable to your situation

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St. Gallen Management Model (1999)
Vision

Policy/Mission

Programs

Action

Activities

Source: in extension to Bleicher (1999)

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New St. Gallen Management Model
(2003)

Source: Rüegg-Stürm (2005)

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Strategy Map
(Kaplan / Norton)

Source: https://www.cgma.org/resources/tools/essential-tools/strategy-mapping.html, 09/15/2019, 17:44 !9

Corporate Ambition

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Legal & Social Framework of a
Company
Legislation
Stakeholdergroup
XYZ

Stakeholdergroup
Z

Societal
expectation
Stakeholdergroup
Y

Stakeholdergroup
X

Company

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Corporate Citizenship - a new way?

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Source: Matten / Crane (2005)
CSR defining the arena?

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How could corporate
ambitions in the
given framework look
like?

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Structured longlist of corporate
ambitions
1. Shareholder value
2. Size
3. Profitability
4. Protection of the institution
5. Growth
6. Stakeholder value

Source: Pidun (2019) !16

Shareholder value
• Total Shareholder Return: Total shareholder return is the profit generated by
a combination of the change in the share price over the measurement period,
plus any dividends paid by the company in the interim. This measure is used
by investors to determine the gains generated by their share holdings. The
formula for this total shareholder return (on an annual basis) is:

(Ending stock price - Beginning stock price) + Sum of all dividends received during the measurement
period
= Total shareholder return

The total return can then be divided by the initial purchase price to arrive at a total shareholder return
percentage.

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Size
• Turnover
• Balance sheet (sum)
• Employees
• Carbon footprint
• Human capital
• Innovation capital
• …

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Profitability
Sales Growth: The change in an organization's sales from one reporting period to another.
Formula: ([Current Sales] - [Past Sales]) / (Past Sales) = (Sales Growth
ROI (Return on Investment): Shows the efficiency of an investment.
Formula: ([Gain from Investment] - [Cost of Investment]) / (Cost of Investment) = (ROI)
ROE (Return on Equity): The amount of net income an organization generates compared to the amount of shareholders’ equity.
Formula: (Net Income) / (Shareholders’ Equity) = (ROE)
ROA (Return on Assets): Indicates how profitable an organization is relative to its total assets.
Formula: (Net Income) / (Total Assets) = (ROA
Return on Capital Employed: Measures an organization's profitability and the efficiency with which its capital is employed.
Program Profitability: Tracks the profitability of an individual program.
Operating Profit Margin: Measures income after variable costs of production are considered.
Formula: (Operating Income) / (Net Sales) = (Operating Profit Margin)
Net Profit Margin: The percentage of an organization's revenue that is net profit.
Formula: (Net Profit) / (Revenue) = (Net Profit Margin)
Net Profit: The amount of money an organization makes after taking out all expenses and other costs.
Formula: (Income) - (Expenses) = (Net Profit)
Gross Profit Margin: The percentage of revenue that is profit after the cost of production and sales is considered.
Formula: (Gross Margin) / (Revenue) = (Gross Profit Margin)
Gross Profit: An organization's profit after the cost of production and sales is considered.
Formula: (Revenue) - (COGS) = (Gross Profit)
Economic Value Added (EVA): An estimate of an organization's economic profit !19
Protection of the institution
• „licence to operate“
• Reputation / brand
• Resilience / Risk balance
• Headquarters in home country (?)

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Growth
• Revenue growth
• Market share gain
• Growth from innovation
• Profit growth

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Stakeholder Value
• Customer Satisfaction
• Employee Satisfaction
• Environmental footprint
• Sustainability performance
• CSR (Corporate Social Responsibility)
• CPR (Corporate Political Responsibility)
• Corporate Citizenship
•

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Target development

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Target cascading as mind frame

Source: Hyung Min Kim (2001)

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Target cascade (systems perspective)

Source: Hyung Min Kim (2001) !25

Target costing (cost based targeting)

Source: Ansari et al. (1996); Ellram (2002) !26

How to integrate
complexity

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Concept of loop learning

Source: adopted from Argyris and Schön (1974)

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Structure behind adaptive processes

Source: Tschakert / Dietrich (2010)

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Today’s use case - „decaf - full taste“
• The Italian founding crew (sub-company of Jacobs but not relevant to this
case) ) of a start up approach the strategy experts from JU and ask them to
find a vision, mission statement as well as a strategy map. You should
prepare an elevator pitch.

• The product is a fair trade decaf coffee from Ethiopia with a extraordinary
taste compared to other decaf coffees.

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