WHAT IS STRATEGY AND WHY IS IT Dr.

Parameth Voraseyanont
IMPORTANT?
LEARNING OBJECTIVES
§ UNDERSTAND ROLES OF STRATEGY IN ORGANISATIONS
§ ABLE TO IDENTIFY RELATIONSHIP BETWEEN BUSINESS MODEL, STRATEGY, COMPETITIVENESS AND
SUSTAINABILITY

§ ABLE TO DEMONSTRATE HOW STRATEGY IS DEVELOPED

§ CAPABLE TO EVALUATE FITNESS OF STRATEGY INTO ORGANISATION
WHAT IS STRATEGY AND ITS GOAL?
WHEN THE STRATEGY BECOME HANDY IN THE
ORGANISATION?
“LEADERSHIP AND HARD WORK ARE ALL VERY WELL AND LUCK IS MIGHTY USEFUL, BUT IT IS A STRATEGY THAT
MAKE OR BREAK FIRMS” (SHAW, 1998)

SOME CIRCUMSTANCE CAN EXPLAIN WHY SOME COMPANIES ARE BLESSED WITH INITIAL, SHORT-LIVED SUCCESS.

BUT ONLY A WELL CRAFTED, WELL EXECUTED, CONSTANT EVOLVING STRATEGY CAN EXPLAIN WHY AN ELITE
SET OF COMPANIES SOMEHOW MANAGE TO RISE TO THE TOP AND STAY THERE YEAR AFTER YEAR, PLEASING
THEIR CUSTOMERS, THEIR SHAREHOLDER AND OTHER STAKEHOLDERS.
IF STRATEGY IS SO IMPORTANT, WHAT REALLY IS
‘STRATEGY’!
WHAT IS STRATEGY? GOAL OF STRATEGY DEVELOPMENT

A COMPANY’S STRATEGY IS THE ‘SET OF STRATEGY LEAD TO ‘COMPETITIVENESS’ THAT

ACTIONS’ THAT ITS MANAGES TAKE TO
SUPPORT GROWTH AND SUPPORT GROWTH AND
OUTPERFORM THE COMPANY’S COMPETITORS
SECURE FUTURE OVER THE LONG TERM
AND ACHIEVE ‘SUPERIOR PROFITABILITY’.

STRATEGY, AT ITS ESSENCE, IT ABOUT COMPETING DIFFERENTLY – DOING WHAT RIVAL FIRM DON’T DO OR WHAT
RIVAL FIRMS CAN NOT DO.
COMPETITIVE DIRECTION CHOICES
CHOICES ABOUT HOW TO COMPETE!
ACHIEVING THIS ENTAILS MAKING A MANAGEMENT COMMITMENT TO A COHERENT ARRAY OF WELL-CONSIDERED
‘CHOICES’ ABOUT HOW TO COMPETE. THESE INCLUDES…

HOW TO POSITION THE COMPANY

IN THE MARKETPLACE HOW TO ATTRACT CUSTOMERS HOW TO COMPETE AGAINST RIVAL
(SCOPE)

HOW TO RESPONSE TO
HOW TO ACHIEVE PERFORMANCE
HOW TO GROW THE BUSINESS CHANGING EXTERNAL
TARGET
CONDITIONS
SOME STRATEGIC EXAMPLES

LOW COST PERSONALIZED WIDE PRODUCT

CUSTOMER
THAN RIVALS RANGE
SERVICE

CONFINE
NARROW
PRODUCT OPERATION TO
PRODUCT LINE
SUPERIORITY LOCAL OR
UP
INTERNATIONAL

WHAT IS/ ARE NAME OF COMPANY(IES) THAT IS EMPLOYING THESES STRATEGY?

 EXERCISE 1.1: TRAILING A COMPANY’S STRATEGY
BY OBSERVING ITS BUSINESS APPROACHES
1 2 3

UNDERSTAND PATTERNS OF ACTION AND BUSINESS APPROACHES

READ THE CASE ANSWER THE QUESTION
THAT DEFINE A COMPANY’S STRATEGY

STRENGTHEN MORE GAIN SALES AND WHAT KIND OF STRATEGY

BARGAINING PERFORMANCE MARKET SHARE VIA THAT THE COMPANY (THOSE
POSITION FEATURES LOWER COSTS WHO HIRE DHL) IN THE CASE
ENTER NEW CAPTURE STRENGTHEN STUDY IS EMPLOYING?
PRODUCT/MARKET OPPORTUNITY OR COMPETITIVENESS
OR EXIT MARKET DEFEND THREAT VIA M&A
STRENGTHEN ACTION AND UPGRADE, BUILD OR
COMPETITIVENESS APPROACHES USING ACQUIRE
VIA ALLIANCE IN KEY ACTIVITIES COMPETITIVENESS
VORASEYANONT, P. (2019)
COMPETITIVE STRATEGY AND SUSTAINABILITY
THE HEART AND SOUL OF ANY STRATEGY ARE THE ACTIONS IN THE MARKETPLACE THAT MANAGERS ARE
TAKING TO GAIN COMPETITIVE ADVANTAGE OVER RIVALS

FIVE OF MOST FREQUENTLY USED AND DEPENDABLE STRATEGIES APPROACHES TO SET COMPANY APART FROM
RIVALS, BUILT STRONG CUSTOMER ROYALTY AND WINNING THE COMPETITIVE ADVANTAGE ARE:

BROAD A FOCUSED
A LOW COST A FOCUSED LOW A BEST COST
DIFFERENTIATION DIFFERENTIATION
PROVIDER STRATEGY COST STRATEGY PROVIDER STRATEGY
STRATEGY STRATEGY

LOW COST DIFFERENTIATE LOW COST TO DIFFERENTIATE OFFER MORE VALUE

ADVANTAGE SUCH PRODUCT TO SPECIFIC MARKET PRODUCT TO FOR MONEY
AS WALMART BOARD BUYERS SELECTED BUYERS
EXERCISE 1.2: WHO ADOPT THESE STRATEGIES?
STRATEGY CHOICES
BROAD A FOCUSED
A LOW COST A FOCUSED LOW A BEST COST
DIFFERENTIATION DIFFERENTIATION
PROVIDER STRATEGY COST STRATEGY PROVIDER STRATEGY
STRATEGY STRATEGY

_____________ _____________ _____________ _____________ _____________

_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
1.2.1 1.2.2 1.2.3 1.2.4 1.2.5
COMPETITIVE STRATEGY AND SUSTAINABILITY
WHAT MAKE A COMPETITIVE ADVANTAGE SUSTAINABLE (OR DURABLE), AS OPPOSE TO TEMPORARY, ARE ELEMENTS
OF THE STRATEGY THAT GIVE BUYER LASTING REASONS TO PREFER PRODUCT OR SERVICE OVER THOSE OF
COMPETITORS -- REASONS THAT COMPETITORS ARE UNABLE TO NULLIFY OR OVERCOME DESPITE THEIR BEST
AFFORD.

EXERCISE 1.3: WHAT IS THE ‘SUSTAINABLE’ COMPETITIVE ADVANTAGE OF ‘DHL’?

______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________

IT SHOULD BE NOTED THAT CRAFTING STRATEGY IS NOT A ONE-TIME EVENT BUT ALWAYS A WORK IN PROGRESS,
AS RESPONSE TO CHANGING MARKET CONDITIONS!
STRATEGY NEEDS TO RESPONSE TO CHANGES!
DIRECTION FOR
ACTIONS

HAVE VALUE TO
CUSTOMERS

COMPANY
STRATEGY
DIRECTIONS
COMPETITIVENESS

SUSTAINABLE

RESPONSE TO
CHANGING
CIRCUMSTANCES
BUSINESS MODEL AND A
COMPANY’S STRATEGY
BUSINESS MODEL AND A COMPANY’S STRATEGY
A BUSINESS MODEL IS MANAGEMENT’S BLUEPRINT FOR DELIVERING A VALUABLE PRODUCT OR SERVICE TO
CUSTOMERS IN MANNER THAT WILL GENERATE REVENUE SUFFICIENT TO COVER COSTS AND YIELD AN
ATTRACTIVE PROFIT

CUSTOMER VALUE ITS PROFIT

THE TWO ELEMENTS OF A COMPANY’S BUSINESS MODEL ARE:
PROPOSITION FORMULA

THE CUSTOMER VALUE PROPOSITION LAY OUT THE COMPANY’S

APPROACH TO SATISFYING BUYERS WANTS AND NEEDS AT THE
PRICE CUSTOMER WILL CONSIDER A GOOD VALUE.

THE PROFIT FORMULA DESCRIBES THE COMPANY’S APPROACH TO DETERMINE A

COST STRUCTURE THAT WILL ALLOW FOR ACCEPTABLE PROFIT, GIVEN THE
PRICING TIED TO ITS CUSTOMER VALUE PROPOSITION
EXAMPLE: BUSINESS MODEL
OVER THE AIR RATION BROADCASTER
Customer value proposition: ‘get themselves Provide free of charge music, news and radio talks
updated without free of charge’ programs
Profit formula Revenue generation: Advertising sales to national and local business
Cost structure: Fixed costs associated with terrestrial broadcasting
operation. Variable costs related to local news reporting,
advertising sales operations, network affiliation fees,
programing and content royalties, commercial production
activities and support activities.
Profit margin: Profitability dependent on generating sufficient
advertising revenue cover costs and provide attractive
profits.
EXAMPLE: BUSINESS MODEL
NETFLIX
Customer value proposition: ‘Entertainment Provide monthly subscription fees high quality video on
whenever needed’ demand
Profit formula Revenue generation: Monthly subscription fees
Cost structure: Fixed costs associated with video delivery service and
streaming internet service. Variable costs are content
loyalties, marketing and support activities
Profit margin: Profitability dependent on attracting a sufficient large
number of subscribers to cover costs and provide
attractive profits.
VERIFYING A STRATEGY
 WHAT MAKES A STRATEGY A WINNER?
THREE TEST CAN BE APPLIED TO DETERMINE WHETHER A STRATEGY IS A WINNING STRATEGY

THE FIT TEST THE COMPETITIVE ADVANTAGE THE PERFORMANCE TEST

HOW WELL DOES THE STRATEGY FIT IS THE STRATEGY HELPING THE IS THE STRATEGY PRODUCING
THE COMPANY SITUATION? STRATEGY COMPANY ACHIEVE SUSTAINABLE SUPERIOR COMPANY PERFORMANCE?
FIT TO ‘EXTERNAL ENVIRONMENT’ AND COMPETITIVE ADVANTAGE?
‘INTERNAL CAPACITY’
 HOMEWORK (EXERCISE 1.4)
1 2 3

WHEN AND HOW TO SUBMIT THE

READ THE CASE ANSWER THE QUESTION
HOMEWORK?

WHAT IS THE BUSINESS MODEL OF THE SUBMIT HERE

COMPANY?

WHAT IS THE KEY COMPETITIVE

ADVANTAGES AND THREATS OF THE
COMPANY?

TTW (2019) WHAT SHOULD BE A STRATEGY FOR THE

COMPANY BEFORE ALL THE CONCESSIONS
EXPIRE?
REFERENCE
• A. A. THOMPSON, J. E. GAMBLE, A.A. PETERAF, A.J. STRICKLAND III (2018) CRAFTING AND EXECUTING STRATEGY:
THE QUEST FOR COMPETITIVE ADVANTAGE, 21 EDS., MCGRAW-HILL, NEW YORK
•VORASEYANONT, P. (2019) DHL CASE: OUTSOURCING SERVICE, STRATEGIC LOGISTICS MANAGEMENT IN EEC,
INDUSTRIAL PROMOTION DEPARTMENT, MINISTRY OF INDUSTRY
• TTW (2018) FORM 56-1, THAI TAP WATER PLC., HTTP://WWW.SET.OR.TH/DAT/F56//F0961T15.ZIP
Q&A