Strategic Management

Introduction

Franck D. NASSIRI
2022-2023
COURSE OBJECTIVES &
ORGANIZATION
 Strategic Management

• This course equips managers and students of management with

the concepts, frameworks, and techniques needed to make
strategic decisions

• It will also prepare students for strategy consulting missions

CONTENT & SKILLS
 Strategic Management: Part 1

• Introduction: The Concept of Strategy

• The tools of strategy analysis:

ü Goals, Values & Performance
ü Industry analysis
ü Hypercompetition & Game theory
ü Analyzing Resources & Capabilities

• Business Strategy
ü Sources of competitive advantage
ü Industry evolution and Strategic Change
ü The Tech based industries & the Management of innovation
 Strategic Management: Part 2

• Corporate Strategy
ü Vertical integration & the scope of the firm
ü Internationalization, global & multi-national firms
ü Diversification strategy
ü Managing the multi-business firm
ü External growth Strategies (M&As, Strategic alliances)
 Strategic Management

• 24h
• Mix of Course, exercises & Case studies (group work)
• In person & Videos (eventually online collaborate)

Grading:

• 50% => Mid-term test (Individual)

• 50 % => Final exam (Individual, covering the whole program)
• Case studies & assignments : +/-2 points adjustment on final
exam grade
 Strategic Management

• I value:
üAttendance
üAppropriate Behaviour
üAttention, focus during lectures
üHard-working
üRelevant interactions
üPositive contributions to the class learning experience

• Use your electronic devices only to enhance your learning

experience in class
 WHAT IS
PERFORMANCE?
 Performance is about being both Effective & Efficient

• Effectiveness:
ü General: capacity to achieve goals
ü Is about “Doing the right things”, having a set of relevant
objectives & the right plan

• Efficiency:
ü General: optimum use of resources
ü Organizational: The extent to which organizational resources
contribute to productivity
ü Is about “doing things right”

16 janvier 2023
Sous titre
Organizational Performance

Efficient Not reaching Reaching goals

(most resources goals and not and not
contribute wasting resources wasting resources
RESOURCE USE

to production)

Inefficient
(few resources Not reaching Reaching goals
contribute goals and and wasting
to production) wasting resources resources

Ineffective Effective
(little progress toward (substantial progress
organizational goals) toward organizational
goals)
GOAL ACCOMPLISHMENT
 Organizational Performance
The business
The business dies
thrives : Brilliant
slowly: Perfectly
plan & strategy
execute a wrong plan
executed
or strategy
Efficient Not reaching Reaching goals brilliantly
(most resources goals and not and not
contribute wasting resources wasting resources
RESOURCE USE

to production)

The business
Inefficient survives: brilliant
(few resources Not reaching Reaching goals
goals and and wasting plan & strategy
contribute
to production) wasting resources resources executed poorly

Ineffective Effective
The business dies (little progress toward (substantial progress
quickly: poorly execute organizational goals) toward organizational
goals)
a wrong plan or
strategy GOAL ACCOMPLISHMENT
 Organizational Performance
They’ve been
Efficient producer of efficient at
photographic film but making products
consumers moved to that customers
Kodak Toyota, Zara
digital photography wanted to buy
Efficient Not reaching Reaching goals
(most resources goals and not and not
contribute wasting resources wasting resources
RESOURCE USE

to production)

Over-engineering
GM Mercedes Benz pushed up costs
Inefficient of products that
(few resources Not reaching Reaching goals
contribute goals and and wasting customers
to production) wasting resources resources wanted to buy

Ineffective Effective
Incurred high costs (little progress toward (substantial progress
while making unreliable organizational goals) toward organizational
and undesirable cars goals)
GOAL ACCOMPLISHMENT
 Productivity

• Productivity is about efficiency of production

• We can define productivity as the relationship between the total

amount of goods or services produced (output) and the organizational
resources needed to produce them (input)

• Productivity = Total output / Total input

ü At Workplace : Total value of work / Total hours worked

ü In manufacturing terms, if a company can produce 10,000 table
lamps in 13 hours instead of in 23 hours, this is a dramatic
increase in productivity

16 janvier 2023
Sous titre
 Performance

• In business, higher performance & productivity are supposed to

help achieve higher ………….. ?

ü Higher profitability

• How do you measure performance in business?

ü Could Sales, market share, market cap be effective measures of

performance?

16 janvier 2023
Sous titre
 16 janvier 2023
Sous titre
 Process

• A set of interrelated and interacting activities that transform

inputs to outputs

16 janvier 2023
Sous titre
WHAT IS STRATEGY ?

HOW TO THINK ABOUT

COMPETITION?
How to think about strategy & competition?

• Strategy & Competition:

ü War
ü Sport
ü Gaming
ü Business

• Strategy:
ü What is the ultimate goal of any strategy?
ü What does strategy mean in any of these areas?
ü How should we think about strategy in business?
STRATEGY TODAY

Definitions of Strategy
Strategy: a plan, method, or series of actions designed to achieve a specific
goal or effect.
— Wordsmyth Dictionary (http://www.wordsmyth.net)

Strategy is the pattern of objectives, The determination of the

purposes, or goals and the major policies
and plans for achieving these goals, stated
in such a way as to define what business
the company is in or is to be in and the
kind of company it is or is to be.
—Kenneth Andrews, The Concept of
Corporate Strategy (Irwin, 1971)
long-run goals and objectives
of an enterprise, and the
adoption of courses of action
and the allocation of
resources necessary for
carrying out these goals.
— Alfred Chandler, Strategy
and Structure (MIT Press, 1962)

“Strategy is the creation of a unique and differentiated position

involving a different set of activities.”
— Michael Porter
 Definitions of Strategy

… the field of « strategic management » cannot afford to rely on a single

definition of strategy…. explicit recognition of multiple definitions can
help practitioners and researchers alike to maneuver through this difficult
field …

H. Mintzberg
 Strategy defined

• Recommended Reading

ü What is Strategy? From M. Porter

• As defined by M. Porter, Strategy is about offering uniqueness,

building a competitive advantage and to sustain that advantage over
time

• Strategy is about delivering differentiated value to stakeholders

Strategy defined: M. Porter
STRATEGY TODAY

Definitions of Strategy

• Distinguishing strategy from tactics:

üStrategy is the overall plan for deploying resources to

establish a favorable position.

üTactic is a scheme for a specific maneuver

WHAT IS MANAGEMENT?
WHAT IS PLANNING?
 Planning

• « Management » aims at setting organizational goals and then

planning, organising, influencing and controling actions, resources &
processes in order to achieve these goals.

Organizational Short-term & long-

Goals term planning

Planning

Influencing Controlling

Organizing

16 janvier 2023
 Planning

• Planning is in our DNA. We plan our wedding, our vacations and our
days, because we recognize the benefits of planning:

1. Know what to do to achieve goals

2. Mitigate foreseeable chaos

• There is a difference between “plan” and “planning”:

ü Planning is an active way of discussing the goals, objectives,

strategies and tasks that we need to accomplish
ü Plans are the documentation of planning
Planning

No battle plan ever survives contact with the enemy

(Prussian general
Helmuth von Moltke, 1800)

No plan survives first contact with the enemy. What matters is how
quickly leader is able to adapt
(A Variation of the Moltke statement from Tim Harford)

In preparing for battle, I have always found that plans are useless but
planning is indispensable
(Dwight D. Eisenhower)
 STRATEGIC ANALYSIS &
STRATEGIC MANAGEMENT
 Business Environment: External &
Internal
GENERAL
• The awareness of the ENVIRONMENT

external environment of the

OPERATING
firm will be critical to define Social
ENVIRONMENT
Economic
appropriate organizational component
International GANIZAT Supplier
component

OR
strategy component H
E IO component

N
T
INTERNAL
ENVIRONMENT
Planning aspects
INTERNAL
• How do you craft your Organizing aspects
ENVIRONMENT
Influencing aspects
personal strategy? Labor
Controlling aspects
Competition
component component
Political Technology
• To which extent do you component
Customer
component

think your strategy is linked component

to the external
environment? Legal
component
 What’s wrong with SWOT?

• It classifies influences on a firm's strategy into four categories:

Strengths, Weaknesses, Opportunities, and Threats

• Is global warming a threat or an opportunity for the world's automobile

producers?

ü By encouraging higher taxes on motor fuels and restrictions on car

use, it is a threat
ü By encouraging consumers to switch to fuel-efficient and electric
cars, it offers an opportunity for new sales
 What’s wrong with SWOT? (2)

• Classifying external factors into opportunities and threats, and internal

factors into strengths and weaknesses, is arbitrary

• We will follow a simple two-way classification of internal and external

factors and avoid any premature categorization into strengths or
weaknesses, and opportunities or threats
MARKET & INDUSTRY
 Industry: Supply Market: Demand

Strategic Group 1 Segment 1

Strategic Group 2
Segment 2

Strategic Group 3 Segment 3

Segment 4
Strategic Group 4

Strategic segmentation Market Segmentation

of an Industry Integrates Involves pairing Customers
Resources, Customers with Products to better
& Competitors target needs
Direct and Potential competitors

Substitutables
(industries related to
yours and substitutable
to some degree)

Industry

Strategic Group
(similar strategies in
the same industry)
 Strategic Management: a process

Managers need to relate Managers need to have a

strategy to the external and framework in order to make the
the internal environments best strategic decisions: develop
of the firm strategic thinking capabilities

STEP 1 STEP 2 STEP 3 STEP 4 STEP 5

Environmental Establishing
analysis organizational Strategy Strategy Strategic
direction formulation implementation control
• General
• Operating • Mission
• Internal • Objectives

FEEDBACK
 Strategic thinking to address challenges

• Strategic thinking is here to help deal with challenges the organization

is facing

• These challenges have a variety of triggers that might have their

origins either in the firm’s external or the firm’s internal environment

• Examples:
ü External: New competitors, changing customer expectations, …
ü Internal: Lack (or excess) of (key) resources

• These challenges usually express themselves in the form of symptoms

such as « loss of market share » or gradual « loss of profitability »
THIS COURSE IS NOT ABOUT
MARKETING AND MARKETING
STRATEGY
 SHORT REMINDER

What is Marketing?

Marketing is a process that enables to establish an exchange between a

seller and a buyer,

Product Money

Service Attention

Seller Idea Buyer Seller Time Buyer

Experience Energy

16 janvier 2023
 SHORT REMINDER

If we consider that the seller provides a product/service to the buyer

against money, the 2 following issues arise:

1. Consumer uncertainty: Customers don’t always know exactly what

they want and/or what they need,

2. Competitive offering: There are many sellers offering the same

products.

These 2 points make the marketing process difficult for both firms and
consumers

Marketers designed tools and techniques to overcome these challenges: 4Ps

are among those useful tools. (1960)

16 janvier 2023