Lecture by:

Ayesha Niazi
Today’s Agenda
 Strategising
 Place in POLC framework
 Corporate vs Business Strategy
 How strategises emerge
 Understand strategy as trade-offs, discipline, and focus.
 Conduct internal analysis to develop strategy.
 SWOT
 Conduct external analysis to develop strategy.
 PESTEL
 Industry Analysis

 Case Study: Flatworld Knowledge

Good Management is equal parts knowing and

doing
Planning – Strategising
 Strategising as part of POLC framework
Components of Strategising
Corporate Strategy vs Business Strategy
Corporate Strategy Business Strategy
 corporate strategy considers  Focuses on how to compete to
an organization to be a be effective
portfolio of businesses,  Remain profitable
resources, capabilities, or  Maintain existing customers
activities.  Add new buyers
 Beat competition
 Based on:
 Enter new markets
 Synergy, or
 Marketing strategy
 Diversification:
 Financial Management
1. Concentric
Strategy
2. Horizontal,
3. Conglomerate
 Operational Strategy
Inputs to Develop Strategy
Internal (Within Entity) External (Outside influences)
 SWOT  SWOT
 Opportunities
 Strength  New products, markets, areas
 Convert to sustainable  Threats
competitive advantage  Competitors, new entrants, economic
conditions
 Weaknesses
 PESTEL : broader macro inputs
 Overcome, remove  Political,
 Value Chain  Economic,
 Sociocultural,
 Functional dissection  Technological,
 VRIO: Identify your competitive niche  Environmental,
 Legal)
 Valuable,
 Industry Analysis (entity related)
 Rare,  Suppliers
 Inimitable,  Customers
 Organisation  Competitors
Strategising Process
•Intended Strategy
Designed through a formal
process of board meetings,
planning committees)
Top down process
Emergent Strategy
result of multiple decisions at
many levels
Bottom up approach
Realised Strategy
The actual practised strategy

The strategic planning systems of

most companies involve a
combination of design and
emergence.
Thus, headquarters sets guidelines in
the form of vision and mission
statements, business principles,
performance targets, and capital
expenditure budgets.
However, within the strategic plans
that are decided, divisional and
business unit managers have
considerable freedom to adjust,
adapt, and experiment.
Strategic FOCUS
Strategy as Tradeoff
Micheal Porter identified 3
generic strategies:
1. Cost-leadership/ low cost
2. Differentiation
3. Scope or Niche Marketing
Strategy to be a Trade-off
between these
Strategy as Value Discipline
Treacy & Wiersema state
1. Product Leadership:
 Provide the best offer, by excelling
in one specific value
2. Operational Excellence:
 Improvement of operational
standards on other values
3. Customer Intimacy:
 Dominate by improving value
annually
4. Only one discipline:
 Build operating model to deliver
unmatched value
 Select one as core but cannot ignore
the other two.
 Maintain the other two at a threshold
The Strategy Diamond
Case Study: FlatWorld Knowledge
Take 10 mins to read the case.

 Discussion Questions:
1. Planning is a key component to the P-O-L-C framework. What
type of planning do you think the founders of Flat World
Knowledge engaged in?
2. What competitive advantages does Flat World Knowledge
possess?
3. What are Flat World Knowledge’s key strengths, weaknesses,
opportunities, and threats?
4. How might the extensive textbook industry experience the Flat
World Knowledge founders possess help or hinder their
strategy formulation and ultimate success or failure?
Case Study: FlatWorld Knowledge
5. Based on Porter’s strategies summarized in the figure
below, which type of strategy do you see FlatWorld
Knowledge employing? Support your response.
Figure
SWOT Analysis of Flat World
Knowledge
Flat World Knowledge is a new college textbook company that operates with the tagline vision of
“Free textbooks. Online. Anytime. Anywhere. Anyone”.*
Strengths
 Great management team.
 Great college business textbooks.
 Experienced author pool.
 Proprietary technology.
Weaknesses
 Limited number of books.
 New technology.
 Relatively small firm size.
Opportunities
 External pressure to lower higher education costs, including textbook prices.
 Internet savvy students and professors.
 Professors and students largely displeased with current textbook model.
 Technology allows textbook customization
Threats
 Strong competitors.
 Competitors are few, very large, and global.
 Substitute technologies exist.

*Retrieved October 28, 2008,

5 October 2019 from http://www.flatworldknowledge.com. 12
In a Nutshell
 SWOT analysis helps you identify strategic alternatives that
address the following questions:
 Strengths and Opportunities (SO)—How can you use your
strengths to take advantage of the opportunities?
 Strengths and Threats (ST)—How can you take advantage
of your strengths to avoid real and potential threats?
 Weaknesses and Opportunities (WO)—How can you use
your opportunities to overcome the weaknesses you are
experiencing?
 Weaknesses and Threats (WT)—How can you minimize
your weaknesses and avoid threats?
Assignment 2
 Formulate a personal Vision for next 10 years. (5 marks)
 A personal Mission Statement (5 marks)
 Formulate personal strategy with the strategy diamond.
 Tools to make Personal Strategy
 Use SWOT (3 marks)

 Use PESTEL (3 marks)

 Strategy Diamond (4 marks)

 Submit by Friday (Total Marks: 20)

 Soft copy
 Title Page not necessary. Write Name, Roll No., Subject, date, on
first page.
 Use 12 pt Times New Roman. Set 1 inch page margins. Apply double
line spacing.