Day1 - DBA 503 Advanced Business Strategies

DBA 503 Advanced Business Strategies
Prof Kriengsak Chareonwongsak,PhD

Senior Fellow, Harvard University
At International School of Thai Nguyen University

Doctor in Business Administration
20 – 21 September 2014
20 September
2014
1. Professor Information
 Professor Dr.Kriengsak Chareonwongsak
 E-mail: kriengsak@kriengsak.com
2. Course Description
Advanced Business Strategies course is a course designed to provide an advanced ideas on how business
owner can create strategies, make sound business decisions, develop, monitor and execute plans to achieve
organizational goals and objectives.
3. Learning Objectives
 After completing this course, participants should be able to:
1) Examining the key concepts associated with the field of Business Strategy
2) Profiling factors that influence the internal and external environments of a strategic management system
3) Identifying organizational strengths, weaknesses, opportunities, and threats
4) Evaluating strategic alternatives in regard to organizational competence and resources
5) Finding and analyzing information sources used in the development of a strategic plan
4. Teaching methods
 Methodologies used in this class including:
1) Lectures
2) Execution of case study
3)Critiques and reviews
4) Self-directed learning during and outside contact hours
5. Course Outline and Required Readings Day 1 – September 20, 2014
5.1 Topic: Introduction and Part 1 Strategy Formulation
 Course Description
 Introduction
- Concept of Strategy and Strategic Management
 Part 1 Strategy Formulation
1) Strategic Analysis
- Analysis of Industry and Competition
- Analysis of the Firm
2) Strategy Formation
- Blue ocean strategy
- Turnaround strategy
- CSR as a Business Strategy
3) Goal Setting
- Measures and Scorecards
5.2 Required Readings
 Chapter 1, 2, 3, 5 in Hill, C. and Jones, G. R. (2009). Essentials of Strategic Management (3 rd edition). South-Western
CENGAGE Leaning: Kentucky
 Downey, J. and Technical Information Service. (2007). Strategic Analysis Tools. Retrieved July 18, 2014 from
http://www.cimaglobal.com/Documents/ImportedDocuments/cid_tg_strategic_analysis_tools_nov07.pdf.pdf
5. Course Outline and Required Readings Day 2 – September 21, 2014
5.1 Topic: Part 2 Strategy Implementation
 Part 2 Strategy Implementation
1) Implement
- Leadership - Communication
- Change - Structure
- Culture - Incentive System
2) Control and Feedback
- Monitor
- Execution
5.2 Required Readings

 Chapter 8, 9 in Hill, C. and Jones, G. R. (2009). Essentials of Strategic Management (3 rd edition). South-Western
CENGAGE Leaning: Kentucky
 Fairholm, M.R. (2009). Leadership and Organizational Strategy. The Innovation Journal: The Public Sector Innovation
Journal, Volume 14(1). Retrieved July 18, 2014 from http://www.innovation.cc/scholarly-style/fairholm3.pdf
 PricewaterhouseCoopers. (2010). Execution-focused leadership. Retrieved July 18, 2014 from
http://www.pwc.com/en_us/us/people-management/assets/execution-focused-leadership.pdf
 Favaro, K. (2013, February 11). How Leaders Mistake Execution for Strategy (and Why That Damages
Both). Strategy+Business. Retrieved 18 July 2014, from http://www.strategy-business.com/article/cs00006?gko=ccb11
6. Course Assessments and Grading
No. Percentage (%)
1 Attendance and Participation 20
2 Assignment 40
3 Examination 40
 Grade
A (100-90) B+ (89-85) B (84-80) C+ (79-75)
C (74-70) D+ (69-65) D (64-60) F (59 & lower)

7. Explanation of Assignments
 2 case studies (1 case 20%)

 Collect data from various sources: interview experts, managers, search from the internet or corporate
annual report.
 Outline – Each case study should consist of at least 5 main parts which are:
1) Background of the company
- The organization you are studying
- What has happened that is of interest or concern?
2) Analyze the company
- Based on theories/frameworks studied in this class, analyze what is going on, why, how, when and who is affected?
- Do your observations align with theories on this topic or not? Explore the similarities and differences.
3) Conclusion
4) Question for Discussion (at least 5 questions for each case)
5) Reference (APA style)
NOTE**
- Using Time New Roman 12”
- Write precisely. Each not to exceed 7 pages (tables and figures are included)
- Deadline – Sunday 5th October
Concept of Strategy
and Strategic Management

Introduction: Concept of Strategy and Strategic Management
1. Strategy
 from Greek στρατηγία stratēgia = “art of troop leader; office of general, command, generalship”
 Modern business strategy emerged as a field of study and practice in the 1960s; Prior to that time, the
words “strategy” and “competition” rarely appeared in the most prominent management literature
 Alfred Chandler (1962)

o “Strategy is the determination of the basic long-term goals of an enterprise,
o and the adoption of courses of action and the allocation of resources
• necessary for carrying out these goals.”
 Michael Porter (1980)

o 3 principles underlying strategy:
1) creating a "unique and valuable [market] position",
2) making trade-offs by choosing "what not to do",
3) creating "fit" by aligning company activities to with one another to support the chosen strategy.

 Henry Mintzberg described five definitions of strategy in 1998
1) Strategy as plan
2) Strategy as pattern
3) Strategy as position
4) Strategy as ploy
5) Strategy as perspective

Figure1: Strategic Management Framework
Source: http://en.wikipedia.org/wiki/Strategic_management Prof Kriengsak Chareonwongsak,PhD

•In order to formulate the right strategies,
an organization has to analyze:
1) External Environment
2) Industry Environment
3) Internal Assessment
1.1 External Environment Analysis Tools
1.1.1 SWOT analysis
Source: Downey and Technical Information Service. (2007)

Source: http://www.smartdraw.com/software/swot-example.htm
1.1 External Environment Analysis Tools
1.1.2 PEST analysis
(1) P = Political component
(2) E = Economic component
(3) S = Socio-cultural component
(4) T = Technological component
 PEST analysis can be extended.
 PEST = Politic + Economic + Social + Technology
 PESTEL = PEST + Environment + Legal
 PESTTELI = PESTEL + Industry Analysis
 STEEP = PEST + Ethical
 LONGPEST = Local + National + Global factors + PEST
Source: Alan Shaw (January 19, 2011)
1.2 Tools for Industry Analysis
1.2.1 Porter’s Five Force
(1) Threat of new entrants
(2) Supplier Power
(3) Threat of Substitutes
(4) Buyer Power
(5) Intensity of Competition

Threat of new entrants: Medium
1) Forces increasing barriers to entry:
- A lot of players already exist.
- High Capital investment required
2) Forces decreasing barriers to entry
- Increase in Globalization around the
world: international company can export
their products to Thailand easier than
before.
Supplier Power: Low - Little protection for technologies use Buyer Power: High
Factors weakening supplier Factors strengthening buyer
power power
- A large number of suppliers. - Large number of buyers
Intensity of competition: Quite High
These products can be sold in - There are many brands in the
- Quit difficult to enter the market
supermarkets and groceries all palm oil market and a lot of
- Consumers have high bargaining
over the country. It means that products that can substitute
power
the company has a very low palm oil. Therefore, consumers
- A lot of competitors
switching cost if they want to can easily switch to other
- Products are easily substituted
change supplier. brands or products. It causes
- Low switching cost from suppliers
them very low switching cost.
- Buyers purchase high
volumes. The higher volumes
Threat of Substitutes: High customers buy, the higher
Forces strengthening threat of Substitutes bargaining power they have.
- A lot of substitute products for palm oil.
All kinds of cooking oil can be threat for
the company.
 Limitations of Porter’s Five Force:
 Assume industry boundaries are stable over time
 Ignore innovation and entrepreneurship (Grant, 2005)

1.2.2 Porter's four corner's analysis
 The model can be used to:
 Develop a profile of the likely strategy changes a
competitor might make and how successful they
may be
 Determine each competitor’s probable response to
the range of feasible strategic moves other competitors
might make
 Determine each competitor’s probable reaction to
the range of industry shifts and environmental changes that
may occur.
Source: Downey and Technical Information Service. (2007)
Helps you identify the ways in which you create value
for your customers,
and then helps you think through how you can
maximize this value:
Whether through superb products, great services, or
jobs well done.

 Value Chain Analysis is a three-step process:
(1) Activity Analysis:
 identify the activities you undertake to deliver your product or service;
(2) Value Analysis:
 for each activity, think through what to do
 to add the greatest value for your customer
(3) Evaluation and Planning:
 Evaluate whether it is worth making changes, and then plan for action.

1.3 Tools for Internal Assessment
1.3.1 SWOT
1.3.2 VRIO framework
Source: https://marcsimony.wordpress.com/tag/vrio-framework/ Prof Kriengsak Chareonwongsak,PhD

Resource / Difficult to Supported by Competitive
Valuable? Rare?
Capability imitable? Organization? Implications
The Brand Yes Yes Yes Yes Sustainable
competitive offer
Supply Chain Yes Yes Yes Yes Sustainable

Management competitive offer
Top Executives Yes Yes Yes Yes Sustainable

competitive offer
International Yes No No Yes Temporary

Product competitive
Distribution advantage
Source: https://sites.google.com/site/applevsdelladmn703/vrio-analysis
Typologies and taxonomies of business level strategies
Typologies Strategies proposed Classification
variables
Ansoff (1965) 1. Market Penetration Growth according to
2. Product Development existing and new
3. Market Development products, as well as
4. Diversification existing and new markets
Buzzell et al. (1975) 1. Building Market share goals

2. Holding
3. Harvesting
Utterback and 1. Performance Maximizing Product and process

Abernathy (1975) 2. Sales Maximizing innovation
3. Cost Minimizing
Typologies Strategies proposed Classification variables
Miles and Snow (1978) 1. Prospector Patterns of adaptation
2. Analyzer
3. Defender
4. Reactor
Hofer and Schendel (1978) 1. Share Increasing Stage of the product/market
2. Growth evolution of the industry,
3. Profit competitive position
4. Market Concentration and Asset
Reduction
5. Turnaround
6. Liquidation
Patel and Younger (1978) 1. All out push for share Industry maturity and
2. Hold position competitive position
3. Grow with industry
4. Harvest
5. Selectively push for position
6. Phased out withdrawal
7. Turnaround
8. Find niche and protect it
9. Abandon
Vesper (1979) 1. Multiplication Strategic postures based on
2. Monopolizing superiority and flexibility in
3. Specialization adapting to the environment
4. Liquidation
5. Abandon
Porter (1980) 1. Cost Leadership Strategic scope and strategic
2. Differentiation strength
3. Focus
4. Stuck In the Middle
Wissema et al.(1980) 1. Explosion Situation of the market and
2. Expansion situation of the company
3. Continuous Growth (possible routes to the desired
4. Slip strategic position.)
5. Consolidation
6. Contraction
Miles and Cameron (1982) 1. Domain Defence Organizational adaptation

2. Domain Offense
3. Domain Creation
Miller (1988) 1. Innovators Business focus, Asset
2. Marketers parsimony, Asset intensity
3. Cost Leaders
4. Niche Marketers
Schuler and Jackson (1987) 1. Innovation Dimensions of competitive
2. Quality Enhancement advantage
3. Cost Reduction
Herbert and Deresky (1987) 1. Develop Product/market evolution

2. Stabilize
3. Turnaround
4. Harvest
Mintzberg (1988) 1. Price Differentiation Differentiation and scope
2. Image Differentiation
3. Support Differentiation
4. Quality Differentiation
5. Design Differentiation
6. Undifferentiation
Venkatraman (1989) 1. Aggressiveness Strategic orientation
2. Analysis
3. Defensiveness
4. Futurity
5. Proactiveness
6. Riskiness
Wright et al. (1992) 1. Low cost Firm size, scope and strength
2. Differentiation
3. Low cost Differentiation
4. Mixed
5. Focus Low Cost
6. Focus Differentiation
7. Focus low cost-Differentiation
Typologies Strategies proposed Classification
variables
Ward et al. (1996) 1. Niche Differentiation Emphasis on quality and
2. Broad Market price, asset parsimony,
3. Differentiation innovation -R&D, narrow
4. Cost Leadership product - market scope
5. Lean Competitiveness
Thompson and Strickland 1. Cost Leadership Strategic scope and
(1999) 2. Differentiation strategic strength
3. Focus
4. Best Cost Provider
Kim and Mauborgne (1999) Value Innovation Competitive advantage
Chang et al. (2002) 1. Pre-emptive/First mover Dimensions of competitive

2. Low Cost/ Follower advantage, timing of entry
3. Differentiation/Follower into the marketplace
Hitt et al. (2007) 1. Cost leadership Strategic scope and strategic

2. Differentiation strength
3. Focus
4. Integrated Cost Leadership
and Differentiation
Galbraith and Schendel (1983) 1. Harvest Strategy posture and

2. Builder strategy direction (Total 26
3. Continuity variables) For the consumer
4. Climber goods industry
5. Niche
6. Cashout
1. Low Commitment Strategy posture and
2. Maintenance strategy direction (26
3. Growth variables) For the industrial
4. Niche product industry
Hambrick (1983) 1. Cost Leadership Strategic choice and strategic
2. Asset Conscious Followers position attributes
3. High Quality Gendarme For disciplined capital goods
makers
1. Broad Based Differentiation Strategic choice and
2. Prospectors strategic position attributes
3. Asset Conscious Focusers For aggressive makers of
complex capital goods
Robinson and Pearce (1988) 1. Efficiency and Service 27 competitive methods
2. No Clear Strategy
3. Service/high-price markets
and Brand Channel Influence
4. Product Innovation and
Development
5. Brand Identification/Channel
Influence and Efficiency
Kim and Lim (1988) 1. Product Differentiators 15 strategy variables

2. Market Differentiators
3. Overall Cost Leaders
Douglas and Rhee (1989) 1. Broad Liner Marketing tactics, market

2. Innovator scope, business synergy (17
3. Integrated Marketer strategy variables)
4. Low Quality
5. Nicher
6. Synergist
Huang (2001) 1. Innovation Eight statements about strategy
2. Cost leadership
3. Stuck in the Middle
Lillo and Lajara (2002) 1. Differentiation Nineteen variables
2. Innovation describing a firm’s
3. Product Offering competitive strategy
4. Aggressive growth with
narrow special product
Powers and Hahn (2004) 1. General Differentiation 26 competitive methods
2. Focus
4. Cost Leadership
5. Customer Service Diff
Source: Sumer and Bayraktar (2012)

2.1 Five Generic Strategies
 After analyzing works on business strategy, five generic
strategies can be identified (Sumer and Bayraktar, 2012).
1) Cost Strategies
2) Differentiation Strategies
3) Focus Strategies
4) Hybrid (Combination) Strategy
5) No Definite Strategy

2.1.1 Cost Strategies
1) Cost Leadership
 Reduce costs in fields such as R&D and advertising
 Besides economies of scale, cost reduction efforts through
 The experience curve
 Strict control over costs and overhead costs
2) Cash Flow Maximizing
 In this strategy, investments are kept at the lowest level
 At the same time, high cash flow is maintained by reducing costs.
 Mostly, enterprises follow this strategy are:
 operating in low growth-rate sectors,
 with high market shares
 or with low market shares
 and considering ending their operations in the present business soon,
2.1.2 Differentiation Strategies
1) Market Differentiation
 Example: In South Africa, drones repurposed to deliver beer to
festival goers
Source: http://www.forbes.com/sites/springwise/2013/07/24/beer-drones-and-the-top-marketing-advertising-ideas-from-the-last-year/
iPhone 5S’ s debut price iPhone 6’ s debut price
23,900 24,500 – 25,000

16 GB
32 GB 27,900 28,500 – 29,000
64 GB 31,900 32,500 – 33,000
Source: http://www.techmoblog.com/iphone-6-price/
3) General Differentiation
We can define this group as approaching the
market and innovation differentiation strategies
together.
This strategy may be called share increasing
and growth, domain offense and domain
creation or explosion and expansion
Example: Mercedes-Benz in Thailand

2.1.3 Focus Strategies
1) Focus-Low Cost
Source: http://2012books.lardbucket.org/ Prof Kriengsak Chareonwongsak,PhD

2.1.4 Hybrid (Combination) Strategy
 This strategy implies the implementation of cost leadership
and differentiation strategies.
 The aim of this strategy is to satisfy the customer in terms
of
 The quality/ performance/ service/ property of products
 And fulfill price expectations of the customer.
 Acquaah & Ardekani (2006) justified that
 The implementation of a combined competitive strategy is
feasible
 And generate superior incremental performance over the
implementation of single competitive
 Just competing on price is not good enough anymore
 Ikea (differentiate in design + low cost)  Toyota (quality - although under pressure + price)

2.1.5 No Definite Strategy
Firms in this group do not follow a certain
strategy.
The three business strategies Porter (1980)
propounded (cost leadership, differentiation and
focus) specify the basic approaches that could be
implemented in a competitive environment.
According to Porter, it is impossible to succeed if a
firm does not prefer one of these three strategies or
implement two of them simultaneously. Porter defines
this situation as being “stuck in the middle”.
2.2 Blue ocean strategy
 Blue Ocean Strategy is a book published in 2005
 Written by W. Chan Kim and Renée Mauborgne,
 Professors at INSEAD
 And Co-Directors of the INSEAD Blue Ocean Strategy Institute.

Source: http://innovationleadership.com/big-vision/blue-ocean-strategy/
2.2.2 A Strategy Canvas
1) List the attributes, or factors of competition, that those
products compete on
2) Use Eliminate-Reduce-Raise-Create Grid (ERRC Grid)

Source: JORGE BARBA (APRIL 28, 2010) Senior Fellow, Harvard University
Source: http://www.ecomaxmc.com/blog/?p=22 Prof Kriengsak Chareonwongsak,PhD
2.3.1 Social Responsibility: Who's Responsible?
 There are 3 parties: 1) Public sector 2) Private sector 3)
Third sector (Civic sector or social sector)
 Private sector has to take part in Social Responsibility
1) Is it Sole Responsibility?
2) Is it Partial Responsibility?
3) Is it Additional Responsibility?
4) Is it Optional Responsibility?
5) Is it Joint Responsibility?
- Primary vs Secondary Prof Kriengsak Chareonwongsak,PhD
2.3.2 Form of CSR practices
1) Corporate philanthropy
2) Cause promotion
3) Corporate social marketing
4) Cause related marketing
5) Social responsibility business practice
6) Community volunteering

2.3.3 How to Develop a CSR strategy
1) Change business paradigm: “Organization’s profit” 
“Social profit”
2) Change business focus: “Customers”  “Stakeholders”
3) Build business core ideology: “A socially responsible
attitude”
4) Build business core values: "Adding value to society"
5) Set operational goals for CSR: “To create social innovation”
6) Change entire the organization’s operational process to
promote social responsibility
7) Encourage employee to be a volunteer for society
8) Develop a new evaluation system for CSR

Well-chosen goals and objectives
 Point a new business in the right direction
 And keep an established company on the right
track.
To help you better understand how you can set
goals and objectives,
 You first need a good foundation for what the two are.

Goals Objectives
Tell you where you want to go Tell you exactly how to get there
Can increase your effectiveness Back your goals and make you
more efficient
Typically described in words Often come with numbers and
specific dates.
Source: Business Plans Kit for Dummies, 4th Edition

3.1 Approach #1: Goals and Objectives Flowchart - Tie goals to
your mission
Source: Business Plans Kit for Dummies, 4th Edition Prof Kriengsak Chareonwongsak,PhD
3.2 Approach #2: Use goal-setting ACES
Source: Business Plans Kit for Dummies, 4th Edition Prof Kriengsak Chareonwongsak,PhD
3.3 Approach #3: 5 Categories of Goals - Cover
all the bases
1) Day-to-day work goals
2) Problem-solving goals
3) Development goals
4) Innovation goals
5) Profitability goals

Prof Kriengsak Chareonwongsak
 Mobile: 0066-81-776-8989
 E-mail: kriengsak@kriengsak.com
 www.facebook.com/drdancando
 www.twitter.com/drdancando
 www.drdancando.com
 www.oknation.net/blog/kriengsak

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DBA 503 Advanced Business Strategies

Prof Kriengsak Chareonwongsak,PhD

At International School of Thai Nguyen University

5.2 Required Readings

No. Percentage (%)

1 Attendance and Participation 20

Prof Kriengsak Chareonwongsak,PhD

 2 case studies (1 case 20%)

Prof Kriengsak Chareonwongsak,PhD

 Alfred Chandler (1962)

 Michael Porter (1980)

Prof Kriengsak Chareonwongsak,PhD

Prof Kriengsak Chareonwongsak,PhD

Source: http://en.wikipedia.org/wiki/Strategic_management Prof Kriengsak Chareonwongsak,PhD

Source: Downey and Technical Information Service. (2007)

Prof Kriengsak Chareonwongsak,PhD

Prof Kriengsak Chareonwongsak,PhD

Prof Kriengsak Chareonwongsak,PhD

Prof Kriengsak Chareonwongsak,PhD

Source: https://marcsimony.wordpress.com/tag/vrio-framework/ Prof Kriengsak Chareonwongsak,PhD

Supply Chain Yes Yes Yes Yes Sustainable

Top Executives Yes Yes Yes Yes Sustainable

International Yes No No Yes Temporary

Buzzell et al. (1975) 1. Building Market share goals

Utterback and 1. Performance Maximizing Product and process

Miles and Cameron (1982) 1. Domain Defence Organizational adaptation

Herbert and Deresky (1987) 1. Develop Product/market evolution

Chang et al. (2002) 1. Pre-emptive/First mover Dimensions of competitive

Hitt et al. (2007) 1. Cost leadership Strategic scope and strategic

Galbraith and Schendel (1983) 1. Harvest Strategy posture and

Kim and Lim (1988) 1. Product Differentiators 15 strategy variables

Douglas and Rhee (1989) 1. Broad Liner Marketing tactics, market

Source: Sumer and Bayraktar (2012)

Prof Kriengsak Chareonwongsak,PhD

23,900 24,500 – 25,000

Prof Kriengsak Chareonwongsak,PhD

Source: http://2012books.lardbucket.org/ Prof Kriengsak Chareonwongsak,PhD

Prof Kriengsak Chareonwongsak,PhD

Prof Kriengsak Chareonwongsak,PhD

Prof Kriengsak Chareonwongsak,PhD

Prof Kriengsak Chareonwongsak,PhD

Prof Kriengsak Chareonwongsak,PhD

Prof Kriengsak Chareonwongsak,PhD

Source: Business Plans Kit for Dummies, 4th Edition

Prof Kriengsak Chareonwongsak,PhD

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