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Fudamentals of Strategy Flashcards

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1
Q

Porter (1996) provides a reason for the necessity of trade-offs in
strategy?

A
  • They create a need for choice and purposefully limit what a company offers
  • They arise from limits on internal coordination and control
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2
Q

Strategic Management in Turbulent Times: Key Challenges to Steer Through

A
  1. Ambiguity: challenges can be perceived in multiple ways
  2. Managing organizations, not machines: behavioral changes are difficult
  3. Uncertainty of the future: difficult to predict the future
  4. External dynamism: interactions lead to multiple changes
  5. Complexity (complex challenges with many linkages and high interdependence)
  6. Shifting rules of the games (e.g regulators by technologies)
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3
Q

When does it becomes of necessity for the organisation to change?

A
  1. Changing environments
  2. Team with resources & opponents
  3. Leadership & decision-making
  4. Different paths to success
  5. Choices & adjustments
  6. Time horizons
  7. Anticipation
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4
Q

Why is strategic management important?

A

If organizations are able to navigate the challenges and make good choices

–> will be available to make more profitable despite the competition that they face

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5
Q

Why are some companies more profitable with their business than others.. ?

A
  • Strategy
  • Competitive advantage
  • Better performance
  • Above average profits
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6
Q

What is the basic logic of strategic management?

A
  • Potentials of advantages
  • Strategy
  • competitive advantage
  • better performance
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7
Q

Potentials of advantages

A
  • Inside in
  • Outside in
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8
Q

Outside-in

A

organization’s abilities to better understand the external environment
How are they doing that?
–> macro-environment
–> industry analysis
–> customer insight

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9
Q

Inside out

A

superior internal resources & capabilities
–> Resource-based view of the firm

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10
Q

Strategy (include what ?)

A
  1. Business unit strategy –> set up the core product
    –> Corporate Strategies
    –> Functional Strategies
    –> Network Strategies
    –> Issue Strategies
    = platform strategies
    = Ecosystem strategies
    = Sustainability strategies
  2. Need leadership and organizational structures that help to devise this different strategies
    –> Organizational structure
    –> Leadership
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11
Q

Competitive advantage

A

Is short lived because environment constandly changing:
- Strategic change & transformation
- Innovation

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12
Q

Strategic Framework

A
  • Strategic positioning
  • Strategic choices
  • Strategy in Action
    –> voir image
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13
Q

Strategy definition

A
  • creating uniqueness
  • seeing around corner –> need to embrace the notion of transcient advantage
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14
Q

Strategies : Basic statement 1

A

Strategies are based on assumptions that need to be communicated and validated over and over again

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15
Q

Strategies : Basic statement 2

A

Long-term direction: Advantages of strategies arise from their uniqueness compared to their competitors

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16
Q

Strategies : Basic statement 3

A

Strategic management is concerned with
explaining differences in the performance of
companies

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17
Q

There is dynamic heterogeneity (level/dynamic)

A

Level 1 : There are significant differences between the performance of industries
Level 2 : There are significant differences between firms in the same industry

Dynamic 1: Differences in performance might change from year to year
Dynamic 2 : New industries emerge, old industries are extinguished, recently hybrid industries are emerging

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18
Q

Elements of Performance

A
  • Market performance
  • Social performance
  • Environmental performance
  • Financial performance
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19
Q

Market Performance

A

Maintain and develop competitive advantage in markets

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20
Q

Financial Performance

A

Secure and increase financial value

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21
Q

Social Performance

A
  • Balance and improve the relationship with
    important stakeholders
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22
Q

Environmental Performance

A
  • Minimize the environmental impact and
    enhance the health of natural ecosystems
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23
Q

disparate view of business

A
  1. The Disparate View
  2. The Intertwined View
  3. The Embedded View
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24
Q

The Disparate View

A

Business is separable: Largely self-contained and self-regulating

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25
The Intertwined View
Business is partially separable: Relatively equal in stature to society and nature
26
The Embedded View
Business in inseparable: A partial system contributing to societal welfare, within the biosphere
27
New dimensions & measures of performance (I) : ESG
- Environmental - Social - Governance
28
ESG Risk Reporting
- Risk assessment not necessarily impact - Measurement and transparency problems - Latest research suggests: no impact on returns
29
EU Taxonomy: definition
a standard set of definitions for sustainable activities centered around 6 environmental objectives
30
6 environmental objectives
1. Climate change mitigation 2. Climate change adaptation 3. Sustainable use and protection of water and marine resources 4. Transition to circular economy, waste prevention and recycling 5. Pollution prevention and control 6. Protection of health ecosystems
31
Why strategically relevant? 6 environmental objectives
1. Classification system establishing a list of environmentally sustainable economic activities 2. Guides investment towards more sustainable projects and companies 3. Lower cost of capital for compliance favorable loan terms & increased attractiveness to investors
32
New dimensions & measures of performance (II)
Sustainable Development Goals
33
New dimensions & measures of performance (III)
The race to net-zero
34
New dimensions & measures of performance (IV)
Circular Economy --> Waste equals food --> Waste equals high-quality raw materials for new products
35
New dimensions & measures of performance (V)
Benefit Corporate (“B Corp”) --> aim to transform the economic system “into a more inclusive, equitable, and regenerative global economy”
36
Five global strategies (B corp)
1. Drive the adoption of our standards to manage the impact of business. 2. Certify and engage businesses to improve their impact. 3. Articulate & amplify stories of business as an equitable force for good. 4. Catalyze policy change to enable business as a force for good. 5. Develop a network of local, regional & global communities for change
37
How can companies become net positive
Net positive companies thrive by giving more than they take 1. Take ownership of all the impacts and consequences that flow from their activities – intended or not 2. Reward their shareholders as a result of this longer-term, multistakeholder model 3. Create positive returns for all stakeholders, including their workers, customers, suppliers, partners, the next generation and the planet itself 4. Operate for the long-term benefit of business and society 5. Partner with others, including their competitors, critics, civil society and governments, to tackle big, systemic problems we cannot solve alone
38
The purpose of strategy:
1. Mission Statement 2. Vision Statement 3. Corporate Values 4. Objectives
39
Mission Statement
Aims to provide employees and stakeholders with clarity about what the organization is fundamentally there to do [1-3 years].
40
Vision Statement
Is concerned with the future the organization seeks to create [5-10 years]
41
Corporate Values
Communicate the underlying and enduring core “principles” that guide an organization’s strategy and define the way it should operate
42
Objectives
Are statements of specific outcomes that are to be achieved
43
Different levels of strategy – all important to achieve superior performance
1. Corporate Strategies 2. Functional Strategies 3. Network-Strategies 4. Issue-Strategies 5. Business Unit Strategy --> page 79
44
Corporate Strategies
Corporate level: e.g., Which businesses are we in?
45
Functional Strategies
Functional level: e.g., how can we improve our branding?
46
Business Unit Strategy
Business unit e.g., how do we position our business unit in comparison to its competitors?
47
Network-Strategies
Partner level: e.g., how can we enhance our partner networks or our synergies?
48
Issue-Strategies
Issue level: e.g. How can we improve our services with new (broad bandwidth) technologies?
49
Who is responsible for strategy within organizations?
- Board of management / directors - Top Management - Other employees within the organization
50
Board of management / directors
- Elected by the company’s shareholders - Commits itself to safeguarding the interests of shareholders - Sets strategic direction and oversees company’s operations
51
Top Management
- Responsible for implementing the strategies - Translating strategy into actionable plans and overseeing performance - Running the firm and making decisions on the allocation of resources
52
Other employees within the organization
- Executing strategies by carrying out duties and tasks in alignment with strategic objectives - Evaluate and initiate necessary steps
53
Who else is influencing a firm’s strategy?
- Inside out view - Outside-in View
54
Inside-out view
- Board of management - Top Management - Diverse other employees / roles within the organization
55
Outside-in View
- Industry, Policy and Technology Experts - Customers & Market Experts --> Consultants - Ecosystem Partners, Suppliers, Distributors etc.
56
What Do Strategy Professionals Generally Do?
- Strategic analyses - Strategic plans - Strategic issue selling: - Strategic decision-making - Strategy communication - Strategy workshops - Strategic projects (strategic initiatives, corporate programs)
57
Strategic analyses:
Industry analysis, competitor analysis, trend analysis, etc
58
Strategic plans
Development of strategic plans
59
Strategic issue selling
Issue packaging, coalition- building, timing etc
60
Strategic decision-making
Develop options, use real- time information, consult internal & external experts, etc
61
Strategy communication
Internally and externally, media, channels, content, etc
62
Strategy workshops
Planning, organizing and conduct of workshops, meetings, trend-shops, etc
63
Strategic projects (strategic initiatives, corporate programs)
Initiation, support (content and method- wise), etc.

Strategic Management (6 decks)

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