CCM Lecture Strategic Management

Strategic Management
Prof. Dr. Indra Erichsen

1
© Prof. Dr. Indra Erichsen
Agenda for Today
Dates and content:

13th Oct. 2023 1. Time Value of Money Webex
20th Oct. 2023 2. Intro to Strategic Management Webex
17th Nov. 2023 3. Strategic Position Room D221
1st Dec. 2023 4. tbd Room D221
Daily procedure:
When What
9:00 -12:00 Lecture incl. Assignment #1 with short
presentation
12:00-13:00 Break
13-17:30 Groupwork
17:30 Deadline of Submission of Assignment #2
(groupwise) via Email (Powerpoint)
2
Let‘s Get Started
3
We are using this Book
Exploring Strategy
Thirteenth Edition
What is Strategy?
• Strategy is the long-term direction of an

organisation.
5
The Strategy Framework -
Three Pillars
6
Strategy: its definition, purpose,
analysis and work
7
What is Strategy?
• The term strategy has been traced back to sixth century BC Greece
and combined the words stratos (army spread out over the ground),
and agein (to lead). To this practical consideration of managing and
directing a large complex force, the importance of strategy was
highlighted by the Chinese military philosopher Sun Tzu, who
defined strategy as ‘the great work of the organization. In situations
of life or death, it is the Tao (path) of survival or extinction’. Since
that time, there have been many new definitions of the word
strategy, particularly by the military but, in the 1960s, Alfred
Chandler, strategy’s founding theorist, brought strategy formally into
a business context. Subsequent definitions of strategy have
continued to refine our understanding of the term and several
prominent ones are examined below.
8
Figure 1.2
Definitions of strategy
Sources: A.D. Chandler, Strategy and Structure: Chapters in the History of American Enterprise, MIT Press, 1963, p. 13; M.E. Porter, ‘What is strategy?’,
Harvard Business Review, November–December 1996, p. 60; P.F. Drucker, ‘The theory of business’, Harvard Business Review, September–October 1994,
pp. 95–106; H. Mintzberg, Tracking Strategies: Towards a General Theory, Oxford University Press, 2007, p. 3.
9
Our fundamental definition of
strategy is:
Strategy is the long-term direction of an organisation. We shall add to
this definition later in the chapter, but already this implies a more
comprehensive view than some of those definitions above. Thus, for
example, the long-term direction of Amazon is from book retailing to
retailing more generally. For Disney, it is from cartoons to diversified
entertainment. Our fundamental definition has advantages. First, the
long-term direction of an organisation can include both deliberate,
logical strategy and more incremental, emergent patterns of strategy.
Second, long-term direction can include both strategies that emphasise
difference and competition, and strategies that recognise the roles of
cooperation and even imitation. The three elements of this strategy
definition – the long term, direction and organisation – can each be
explored further.
10
Three Horizons
11
Figure 1.4
Strategic hierarchy
12
Purpose, Vision, Mission, Objectives
• Organisational Purpose is the reason why a

company exists.
• A vision statement is concerned with the future
the organisation seeks to create
• A mission statement aims to provide clarity
about what the organisation is fundamentally
there to do on a daily basis.
• Objectives are statements of specific outcomes
that are to be achieved
13
Strategy Statements
• David Collis and Michael Rukstad at the Harvard

Business School argue that all entrepreneurs and
managers should be able to summarise their
organisation’s strategy with a ‘strategy statement’.
• Strategy statements should have three main
themes: the fundamental goals (purpose, vision,
mission or objectives) that the organisation seeks;
the scope or domain of the organisation’s
activities; and the particular advantages or
capabilities it has to deliver all of these.
14
Scope and Advantage
• Purpose, vision, mission and objectives

have been described above in 1.2.2 so
here we concentrate on the other two main
themes, scope and advantage, with
examples of all three given in Illustration
1.2:
15
Scope
An organisation’s scope or domain refers to

three dimensions: customers or clients;
geographical location; and extent of internal
activities (‘vertical integration’).
16
Advantage
This part of a strategy statement describes

how the organisation will achieve the
objectives it has set for itself in its chosen
domain. In competitive environments, this
refers to the competitive advantage: for
example, how a particular company or
sports club will achieve goals in the face of
competition from other companies or clubs.
17
Levels of Strategy
So far, we have considered an organisation as a whole but, inside an

organisation, strategies can exist at three main levels (see Figure 1.5)
18
Levels of Strategy
• Corporate-level strategy is concerned with the overall scope of an
organisation and how value is added to the constituent businesses
of the organisational whole.
• Business-level strategy is about how the individual businesses (or

operating units) should compete in their particular markets (this is
often called ‘competitive strategy’).
• Functional-level strategies are concerned with how the

components of an organisation deliver effectively the corporate- and
business-level strategies in terms of resources, processes and
people.
19
We will focus on the Strategic
Position in this class
20
Strategic Position
• The strategic position is concerned with

the impact on strategy of the external
environment, the organisation’s strategic
resources and capabilities, the
organisation’s purpose and stakeholders
and the organisation’s culture.
Understanding these factors is central for
evaluating future strategy.
21
Key Takeaways
• ‘Strategy is the long-term direction of an organisation,

formed by choices and actions about its resources and
scope to create advantageous positions relative to
competitors and peers in changing environmental and
stakeholder contexts.’
• You can summarise a strategy with a strategy statement,
which should include an organisation’s goals, scope of
activities and the advantages or capabilities it brings to
these goals and activities.
22
Assignment # 1
As a team, look for the most

recent annual report of the
Danish company „MAERSK“
and look up the word
„Strategy“.
Summarize your findings about

the strategy of MAERSK and
present your findings.
Presenation: 15 min per Team
23
The Purpose
of Research
1. Exploratory Studies: what

is happening?
2. Descriptive Studies:
portray an accurate profile
of…
3. Explanatory Studies:
establish causal
relationships btw variables
4. Decision-oriented Studies:
research to support
decisions
24
The Purpose
of Research
1. Exploratory Studies: what

is happening?
2. Descriptive Studies:
portray an accurate profile
of…
3. Explanatory Studies:
establish causal
relationships btw variables
4. Decision-oriented Studies:
research to support
decisions
25
Descriptive Methods in this Class
• SWOT Analysis
26
Method 1: SWOT ANALYSIS
27
Why SWOT
• SWOT (strengths, weaknesses, opportunities, and

threats) analysis is a framework used to evaluate a
company's competitive position and to develop strategic
planning. SWOT analysis assesses internal and external
factors, as well as current and future potential.
• A SWOT analysis is designed to facilitate a realistic, fact-
based, data-driven look at the strengths and
weaknesses of an organization, initiatives, or within its
industry. Companies should use it as a guide and not
necessarily as a prescription.
28
SWOT matrix
29
Strengths
• Strengths are those internal factors that

make an organisation superior and more
competitive than its peers. They constitute
an organisation’s distinct advantages and
include resources or capabilities that the
organisation holds that can be used
effectively to achieve its objectives.
Strengths might include a skilled workforce,
a unique technology or a valuable brand.
30
Weaknesses
• Weaknesses are limitations, faults, or

defects within the organisation that will
keep it from achieving its objectives. It is
what an organisation does poorly or
where it has inferior capabilities or
resources compared to its peers and the
competition. Weaknesses might include
poor information technology systems, a
negative or cynical organisational culture
or a bad reputation with customers.
31
Opportunities
• Opportunities include any favourable current or

prospective situation in the organisation’s
environment, such as a trend, change, or
overlooked need. It is something that supports
the demand for a product or service (new or
existing) and permits the organisation to
enhance its position relative to its peers. An
opportunity might include the rapid growth of a
relevant market segment or the emergence of a
new technology that the organisation is well-
placed to exploit.
32
Threats
• Threats include any unfavourable situation,

trend or impending change in an organisation’s
environment that is currently or potentially
damaging to its ability to achieve its objectives. It
may be an external barrier, constraint, or risk
that might inflict problems or harm on the
organisation. For example, a threat could be a
downturn in demand, powerful suppliers, or the
arrival of a new competitor in the market.
33
TOWS Matrix
• The TOWS matrix, sometimes termed a collision

matrix, is a useful way of transforming SWOT
analysis into strategic actions. The matrix builds
directly on the information in a SWOT exercise.
Each box of the TOWS matrix can be used to
identify options that address a different
combination of the internal factors (strengths
and weaknesses) and the external factors
(opportunities and threats).
34
The TOWS matrix
35
Moste frequent SWOT Failings
• Confusing the internal and the external.

• Long lists. Compiling long lists of items in
each box is not the same as doing a
SWOT analysis
• Stopping at SWOT. A final danger is
substituting the SWOT for a
comprehensive and deeper strategy
analysis.
36
SWOT Example: Tesla
37
Table 2.1
Types of data sources for
investigating real organisations
38
Table 2.2
Brief tips for strategy presentations
39
Team Assignment #2
 Apply the SWOT Analysis for the company MAERSK:

https://www.maersk.com/
• Please send me your analysis (PowerPointFormat) by

17:30 o‘clock today the latest.
Important:
Assignment Labeling
Group#_Assignment#Type_LastName1_LastName2
e.g. Team1_Assignment1_Erichsen_Meier_Schulze
40

CCM Lecture Strategic Management

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

CCM Lecture Strategic Management

Uploaded by

Copyright:

Available Formats

Strategic Management

Prof. Dr. Indra Erichsen

Dates and content:

• Strategy is the long-term direction of an

• Organisational Purpose is the reason why a

• David Collis and Michael Rukstad at the Harvard

• Purpose, vision, mission and objectives

An organisation’s scope or domain refers to

This part of a strategy statement describes

So far, we have considered an organisation as a whole but, inside an

• Business-level strategy is about how the individual businesses (or

• Functional-level strategies are concerned with how the

• The strategic position is concerned with

• ‘Strategy is the long-term direction of an organisation,

As a team, look for the most

Summarize your findings about

1. Exploratory Studies: what

1. Exploratory Studies: what

• SWOT (strengths, weaknesses, opportunities, and

• Strengths are those internal factors that

• Weaknesses are limitations, faults, or

• Opportunities include any favourable current or

• Threats include any unfavourable situation,

• The TOWS matrix, sometimes termed a collision

• Confusing the internal and the external.

 Apply the SWOT Analysis for the company MAERSK:

• Please send me your analysis (PowerPointFormat) by

You might also like