INTB 6260

Advanced Topics
in Global Strategy

Julia Ivy, PhD Psych, PhD Mgmt

The DAFI Strategy Framework
Defining
 Community of
Logic for each class EDGE-crafters
Sharing
1. WHY cases &
do we need this topic? articles

2. WHAT
process/framework/formula
would help us to do it well?
3. HOW Learning
do we really do it? How do we Frameworks
& formulas
want to do it?

E-assessment “ Your Personal

Strategy.” Take an anonymous poll
Practicing in
solving the challenges
– somebody’s and own
WHY?
COMPETETIVE STRATEGY
Distinguishing from
other players

4
Porter’s Generic Strategies

1. Cost Leadership
In cost leadership, a player sets out to become
the low-cost producer in its industry. The sources
of cost advantage may include the pursuit of
economies of scale, proprietary technology,
preferential access to cheaper materials and
other factors. A low-cost producer must find and
exploit all sources of cost advantage.  
2. Differentiation
In a differentiation strategy a player seeks to be
unique in its industry along some dimensions
that are widely valued by stakeholder. It selects
one or more attributes that many buyers in an
industry perceive as important and positions
itself to meet those needs in the strongest
manner. It is rewarded with a premium price.
3. Focus
The generic strategy of focus rests on the choice
of a narrow competitive scope within an industry.
The focuser selects a segment or group of
segments in the industry and tailors its strategy
to serving them to the exclusion of others.
The focus strategy has two variants. (a) In cost
focus a firm seeks a cost advantage in its target
segment, while in (b) differentiation focus a firm 5
seeks differentiation in its target segment. Both
variants of the focus strategy rest on differences
 Strategy Drivers
Differentiation Cost Leadership
Drivers Drivers Focus Drivers

Focus on value Focus on Focus on

for stakeholders: reducing cost: Project connection:
Innovation! Management! Execution! Social Capital!
Multidimensional features!
• In-depth knowledge of the
• Cost of input, cost
• Product features segment’s needs
structure
• Precise details for a precise
• Superior standards in • Efficiency of segment
customer service manufacturing • Multidimensional offer 
• New product launches • Value chain optimization core inimitable
• Marketing and • Economies of scale competencies
promotion • Social intimacy in customer
• Learning-curve effects
• Complements relationships
• Experience-curve effects • Brand Management
• Brand Management

+Functioning strategies,
relevant for your competitive strategy !!!
Brand Management as a
“Differentiation” Strategy
Driver

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Balance Scorecard:
Measuring Your
Progress
The balanced scorecard (BSC) is
a 
strategic planning and managem
ent system.
 
Strategic players use BSCs to:
• Prioritize projects, products,
and services
• Communicate what they are
trying to accomplish
• Align the day-to-day work to
strategy’s priorities.
• Measure and monitor progress
towards strategic targets
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Sharpening your
Support groups
positioning!
2 min per person
• Your competitive strategy?
• Sharpen your focus!
• Your drivers?
• Follow the strategy!
• Your measures (KPIs) for
growth?
• Your stepping-stones?
• How you can invest in your
• Follow the drivers!

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WHAT

INSTRUMENTS
you can apply for sharpening your
strategy

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Option 1: Social
Entrepreneurship
1.Recognizing and
resourcefully pursuing
opportunities to create
social value
2.Crafting innovative
approaches to addressing
critical social needs
 Option 2:
Effectuation

By S. Sarasvathy
Crafting your strategy
TOGETHER with stakeholders,
using the following 5 principles
Option: Blue Ocean Strategy

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What Is Blue Ocean
Strategy?
Successfully combining
differentiation and cost-
leadership through challenging
the industry structure
Works very well for focus
strategies but targets untapped
market space.
Uses value innovation to
reconcile trade-offs for creation
of additional demand
The metaphor of
blue ocean refers to crossing
traditional boundaries for
creating your own space
Example of the failure
JCPenney Effort To Build Blue Ocean…
Sailed Deeper into the Red Ocean
•Ron Johnson hired as CEO
• He previously led Apple’s retail stores
•Attempted a strategic change:
• From cost leadership
• To a blue ocean strategy
•Many changes implemented:
• More in-store boutiques
• Removed clearance racks and coupons
• Results:
– Sales dropped by 25%.
– Their stock was dropped from the S&P
500 index.
– Johnson was fired.
– His predecessor came out of retirement
to step in.
– Experienced a sustained competitive
disadvantage
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Sharpening your
Support groups
positioning!
2 min per person

1. Which one resonates most with

you?
• Social entrepreneurship and/or
effectuation and/or blue ocean
strategy?

2. What can you apply?

• What can you add/emphasize to
your positioning/competitive
strategy?

3. Your stepping-stones?
• Volunteering effort/ project that
would prove it?
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HOW
A step-by-step process

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Business model Example
canvas

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Strategy canvas

Example

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Blue Ocean for your
strategy canvas
• Lowering
• Lowering costs
• Eliminate: Which of the factors
that the industry takes for granted
should be eliminated?
• Reduce: Which of the factors
should be reduced well below the
industry’s standard?
• Increasing
• Increasing perceived consumer
benefits
• Raise: Which of the factors
should be raised well above the
industry’s standard?
• Create: Which factors should be
created that the industry has never
offered?

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Example: Yellow Tale
Wine
Cirque du Soleil

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Ideas for the “CREATE” dimension

Cross the Cross the

“industry” “customer
line group” line

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Practicum
Effectuation
Blue Ocean
Social Entrepreneurship

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The US needs your talent!

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Federal grants are available for up to $2mln (easier to get 300-
700K) for those who can bring visitors to Midwest and contribute
to the Midwest image as a desirable tourist destination.

There is a poll of motels and hotels (1-2*, 2-3 stores) in small

Midwest cities, available for sale and/or investment.

All of them have rooms for basic accommodation. Some of them

have non-attractive pools. None of them is located in a resort area,
or in large cities/ financial districts/downtown. All of them un-
profitable.

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 What you do:
Applying Growth Strategy (intendent
strategy-making approach)
1. INDUSTRIES: Brainstorm.
Bring several industries together
 intersection  IDEA
2. CLIENTS: Nontraditional clients
that you can outreach
3. COST + VALUE: Canvas.
Eliminate, reduce, raise, create
4. IMPLEMENTATION: Alliances,
buy-in, multidimensional talents,
org support, etc.
Applying the EDGE Personal
strategy (emergent strategy-making
approach)
• Bring your MEANS to the map:
• Who you are: What you personally
care (or not) for
• Whom you know, who is ready to be
on board
• What you know (your competencies
from other industries)
• Raise, reduce, create, eliminate.
Double check with market and
industry indicators.
• Implementation: Strengthening
opportunities with stakeholders’
support
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 Hotel Indus tr y Canvas

9 Luxury hotels Budget hotels

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YOUR strategy: Title ______________________

• What you offer
• Who you target as main beneficiaries
• Why it will be competitive (ref to any of the concepts we have
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discussed – Porter’s social entr, effectuation, blue ocean)
 Midterm
For your FINAL PROJECT

RE-SHAPING Competitive Advantage

 FOR YOUR MIDTERM: Strategy
Recommendations

• Recommended Value Proposition and its logic

• Recommendation for Positioning Strategy
• Sharpening the positioning strategy with two of the following
• Clarification of the positioning strategy with the Competitive Strategy
(Porter). A list of Drivers to enable the recommended business
strategy (above). As many as necessary
• Social entrepreneurship (include partners and the message for
differentiation)
• Effectuation (include a process of stakeholder involvement for edge-
crafting)
• Blue Ocean strategy (include a strategy canvas).
• Suggest several stepping-stones to move forward

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