Class 6 Strategic Tool II

611407 Strategic Management
King Mongkut·s University of Technology North Bangkok

Dr.PardTeekasap

Outline
¾ Comment on progress report ¾ Lecture on strategic tool II ¾ Strategy talk ¾ Term project progress presentation ¾ Next week discussion

Comment on the report
¾ Key questions to deliver your strategy
o Where are we now? o Where do we go? o How to be there?

¾ Answer is not as important as how to get the

answer

Comment on the report
¾ Readers should understand everything from the

writing. Pictures just make it easier to understand

¾ Every analysis must have the conclusion. What

can we do strategically from the analysis?

¾ Strategy must relate to the analysis

Example strategy-SWOT mapping
Strategy 1 S1 S2 W1 W2 O1 O2 O3 T1 T2 X X X X X X X Strategy 2 X X X X Strategy 3

Strategic tool 2
¾ Resource-based strategy

¾ Competitive advantage

¾ Blue ocean strategy

Why external analysis is important?

Why internal analysis is important?

Willingness to pay and Supplier opportunity cost
¾ Harnischfeger and International Paper case

Added value
¾ The value that would be lost to the world if the

firm disappear

Competitive Advantage

´A firm with a wider wedge has a competitive advantage in its industryµ

Differentiation and low-cost strategy

Activity analysis: Find ways to widen the wedge
Step 1: Catalog Activities Step 2: Use Activities to Analyze Relative Costs Step 3: Use Activities to Analyze Relative Willingness to Pay Step 4: Explore Options and Make Choices

Step 1: Catalog Activities (Value Chain)

Step 2: Analyze Relative Costs

Step 3: Analyze Relative Willingness to Pay

Step 4: Explore Options and Make Choices
¾ Consider what drives each competitor ¾ Consider competitors reaction ¾ Consider the value chain of suppliers and

customers
¾ Consider the scope of operations

Only competitive advantage is not enough

Wide range of resource continuum

No single right solution

Don·t let resources block profit

Form strategies from the resources

Blue ocean strategy
Red ocean

VS

Blue ocean

Differences between oceans
Red ocean strategy Compete in existing market space Beat the competition Exploit existing demand Make the value/cost trade-off Align the whole system of a company·s activities with its strategic choice of differentiation or low cost Blue ocean strategy Create uncontested market space Make the competition irrelevant Create and capture new demand Break the value/cost trade-off Align the whole system of a company·s activities in pursuit of differentiation and low cost

Strategy Talk

Term Project Progress Report

Next week discussion
¾ Xbox case

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