UF 1 Strategic Management

Prof. Dr. Anna Rosinus

anna.rosinus@fh-mainz.de
Anna Rosinus
Strategic Management
what does this course cover?

Management&
Organisation:
what is?
contribution?
influences?
differences/types?
stakeholder/shareholder
hierarchy
entrepreneurship
corporate governance
Success:
what is?
why is it necessary?
how to achieve?
how to measure?
(growth vs. profitability vs.
value creation)
Resources/Capabilities:
what is/are?
contribution?
influences?
differences?
how to analyse?
internal analysis
distinctive competencies
Environment:
what is?
contribution?
factors/dimensions?
external analysis
five forces
competitive intelligence
benchmarking
Strategy:
what is?
contribution?
influences?
differences/types?
who decides?
analysis-formulation-
implementation-control
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Anna Rosinus
Outline
Introduction to Strategic Management
Environmental Scanning & Industry Analysis
Internal Scanning & Organisational Analysis
Strategy Formulation
Situation Analysis & Business Strategy
Corporate Strategy
Functional Strategy & Strategic Choice
Strategy Implementation
organising for Action
Staffing & Directing
Evaluation & Control
Entrepreneurship
Corporate Governance, Sustainability, Globalisation

what to expect?
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Introduction to Strategic Management
Definition(s)
Process
Phases (Basic Model of Strategic Management)
Organisational Adaptation
Learning Organisations - Organisational Learning
Recent Developments & Challenges to Strategy
Benefits of Strategic Management
Strategic Decision-Making
what to expect?
4
Anna Rosinus
Strategic Management - Definitions
the determination of the long-run goals and objectives of an enterprise and
the adoption of courses of action and the allocation of resource necessary for
carrying out these goals (Chandler, 1963)
competitive strategy is about being different. it means deliberately choosing a
different set of activities to deliver a unique mix of value (Porter, 1996)
a pattern in a stream of decisions (Mintzberg, 2007)
set of managerial decisions and actions that determines the long-run
performance of a firm (Wheelen/Hunger, 2012)
strategy is about winning (Grant, 2010)
the long-term direction of an organisation (Johnson et al. 2012)
https://www.youtube.com/watch?v=ibrxIP0H84M
what is strategy? what is strategic management?
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Anna Rosinus
Basic Questions
Where is the organisation now?
NOT Where do we want it to be?
If everything stay as it is, i.e. nothing is changed, where will the
organisation be in 1 year, 2, 5 or 10 years?
Is that acceptable?
If not: what has to be changed?
What specific actions should management undertake in the future?
What are the risks and payoffs involved?
keeping it simple
source: Wheelen, Hunger (2012)
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Anna Rosinus
Strategic Management Model
what are the different steps in strategic management?
strategy
formulation
strategy
implementation
evaluation and
control
environmental
scanning
1 2
3 4
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Environmental
Scanning:
Gathering
information

Strategy Formulation:
Developing long-range plans
Strategy
Implementation:
Putting Strategy into
Action
Evaluation
and Control:
Monitoring
Performance
Mission
Objec-
tives
Strate-
gies
Policies
Pro-
grams
Bud-
gets
Proce-
dures
Performance
Feedback/Learning: Make corrections as needed

External:
Opportunities
and Threats
Internal:
Strengths and
Weaknesses
Strategic Management Process in Detail
source: Wheelen, Hunger (2012)
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Anna Rosinus
Strategic management Process (1)
source: Wheelen, Hunger (2012)
Environmental
Scanning
External:
Opportunities and
Threats
Natural Environment:
Resources and climate
Societal Environment:
General forces
Task Environment:
Industry analysis
Internal:
Strengths and
Weaknesses
Structure
Chain of command
Culture, beliefs,
expectations, values
Resources: Assets,
skills, competencies,
knowledge
Strategy Formulation Strategy
Implementation
Evaluation
and Control
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Environmental Scanning External Analysis
what should be done?
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Anna Rosinus
Strategic management Process (2)
source: Wheelen, Hunger (2012)
Mission
Reason for
existence

Objectives
What resul t s t o
accompl i sh by
when
Strategies
Plan to achieve
the mission,
vision & objectives
Policies
broad guidelines
for decision-
making
Environmental
Scanning
Strategy Formulation Strategy
Implementation
Evaluation
and Control
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Anna Rosinus
Strategy Formulation Mission, Vision etc.
what should be done?
To organize the worlds
information and make it
universally accessible and
useful.
a classic example (etched in
bronze at Newport News
Shipbuilding), unchanged since
its founding in 1886:

We shall build good ships
here at a profit if we can
at a loss if we must but
always good ships.
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Strategy Formulation SWOT/TOWS-Analysis
what should be done?
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Strategy Types
what should be done?
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Strategic management Process (3)
source: Wheelen, Hunger (2012)
Programs
Acti vi ti es needed
to accompl i sh a
pl an
Budgets
Costs of the
programs
Procedures
Sequence of steps
needed to do a job
Environmental
Scanning
Strategy Formulation Strategy
Implementation
Evaluation
and Control
BMW
objective: increasing production
efficiency by 5% each year
programs:
1. shorten new model development time
from 60 to 30 months
2. reduce preproduction time from a year
to no more than five months
3. build at least two vehicles in each
plant so that production can shift
among models depending upon
demand
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Strategy Implementation Example: SOPs
what should be done?
source: 2.bp.blogspot.com; mcdonalds.com.hk
Anna Rosinus
Strategic management Process (3)
source: Wheelen, Hunger (2012)
Performance
actual results
Environmental
Scanning
Strategy Formulation Strategy
Implementation
Evaluation
and Control
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Phases of Strategic Management
how did strategic management change over time?
basic financial
planning
forecast-based
planning
externally
oriented
strategic
planning
strategic
management
organisational
adaptation
learning
organisations
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Anna Rosinus
Strategy and Strategic Fit
does a company have to adapt to its environment?
the company

goals and
values

resources and
capabilities

structure and
systems
the industry
environment

competitors

customers

suppliers
STRATEGY
&
creating
strategic fit
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Anna Rosinus
Organisational Adaptation
= obtaining and preserving strategic fit of a company and its
(industry) environment

theory of population ecology
(no adaption at all; inertia, replacement)
institution theory
(adaptation through imitation)
strategic choice perspective
(adaptation to changing environments + changing the environment,
rational decision-making)
Organisational Learning theory
does a company have to change with its environment?
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Anna Rosinus
Organisational Learning Learning Organisations
Learning organisation:
an organisation skilled at
creating, acquiring, and transferring knowledge and
modifying its behaviour to reflect new knowledge and insights

How to?
solving problems systematically
experimenting with new approaches
learning from past experience, history and experiences of others
transferring knowledge quickly and easily throughout the organisation
how can organisations change?
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Recent Developments & Challenges
governance issues
globalisation
x-commerce & digitalisation in general
sustainability requirements
other trends?

to be detailed later ( 8.)
what implications do global trends have on strategic management?
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Benefits of Strategic Management
answers to the following questions:
what is the companys vision what does it aim at?
what is really i.e. strategically important?
what happens in the companys environment?
who are the competitors?
what do customers want? etc.
improvements in terms of:
operational efficiency,
strategic thinking, and
organisational learning
matching the organisations environment with its strategy, structure and
processes
why do we need strategic management?
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Strategic Decision Making
focus on the long-run future of the organisation

characteristics of strategic decision making include:
rarity
impact
directivity
what makes a decision strategic ?
24 - 1
Anna Rosinus
Strategic Decision Making
focus on the long-run future of the organisation

characteristics of strategic decision making include:
rarity
impact
directivity
what makes a decision strategic ?
24 - 2
Anna Rosinus
Mintzbergs Modes of Strategic Decision Making
entrepreneurial
adaptive
planning

logical incrementalism (Quinn)
how can strategic decisions be made?
25
Anna Rosinus
Environmental Scanning & Industry Analysis
environmental scanning (natural, societal environment - PESTLE)
industry analysis (task environment 5 Forces)
competitive intelligence
trends and forecasting
what to expect?
26
Anna Rosinus
v
Strategic management Process (1)
Environmental
Scanning



External:
Opportunities and
Threats
Natural Environment:
Resources and climate
Societal Environment:
General forces
Task Environment:
Industry analysis
Internal:
Strengths and
Weaknesses
Structure
Chain of command
Culture, beliefs,
expectations, values
Resources: Assets,
skills, competencies,
knowledge
Strategy Formulation Strategy
Implementation
Evaluation
and Control
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Anna Rosinus
Environmental Variables (PESTEL)
which external variables should be considered?
adapted from Wheelen, Hunger (2012)
customers
societal environment
( =macroenvironment)
task environment
( =microenvironment)
internal
environment
competitors
suppliers
general public
ecological
political-legal
socio-cultural
technological
economic
natural
environment
climate
wildlife
physical
resources
structure
culture
resources

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PESTLE-Criteria
what to look at in the societal/macro environment?
s
o
u
r
c
e
:

W
h
e
e
l
e
n
/
H
u
n
g
e
r

(
2
0
1
2
)


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Anna Rosinus
Example PESTLE-Analysis: Pharmaceuticals
Anna Rosinus
PESTLE-Analysis Red Bull, i.e. energy drinks
political economic socio-cultural technological legal ecological
group work
Anna Rosinus
Repetition: Industries, Markets and Sectors
industry: a group of firms producing products and services that are
essentially the same, e.g. the automobile industry
market: a group of customers for specific products or services that
are essentially the same, e.g. the market for luxury cars in Germany
market segment: a group of customers with similar needs that are
different from customer needs in other market segments, e.g. the
silver surfer-segment in the consumer electronics market
sector: a broad industry group (or a group of markets), e.g. the health
sector
what are we talking about?
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Anna Rosinus
Repetition: Industry Types
monopolies: only one firm and therefore no
competitive rivalry, monopoly power = a
dominant position in the market, e.g. google
oligopolies: a few firms dominate => limited
rivalry, the oligopolists have power over buyers
and suppliers, e.g. Boeing and Airbus
perfect competition: low barriers to entry, many
equal/similar rivals, sound information, industries
often show only some features of perfect
competition, e.g. mini-cabs in London
hypercompetition: frequent, bold and aggressive
competitor interactions => constant
disequilibrium and change, e.g. smartphones
what are we talking about?
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Anna Rosinus
Example Hypercompetition: Tour de France
practical application
source: bicyclinghub.blogspot.de; upload.wikimedia.org; zeit.de/sport/tour-de-france.html
Anna Rosinus
Further Examples Hypercompetition
practical application
https://www.youtube.com/watch?v=9n5pTNq5JWk
Anna Rosinus
Issues-Priority-Matrix
probable impact on company
p
r
o
b
a
b
i
l
i
t
y

o
f

o
c
c
u
r
e
n
c
e

low high
l
o
w

low priority
medium
priority
h
i
g
h

high
priority
how to define priorities?
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Anna Rosinus
Strategic Myopia
why dont we reject major changes in the environment?
dailymail.co.uk
RIM: A story of missed opportunities Robin Chan
Anna Rosinus
Task Environment Analysis: Porters Five forces
existing
competitors
suppliers
substitutes
customers
new entrants
(potential
competitors)
what to look at in the task environment?
adapted from Porter, M. (1979)
in general:
weak forces enhance profit (potential),
whereas strong forces limit profits
vertical
forces
horizontal
forces
example of a simplified
supply chain
supplier
(input factors such as
intermediate products
and/or raw material,
e.g. milk)
manufacturer
(e.g. yogurt)
retailer
(e.g. rewe, carrefour,
tesco)
end customers,
consumers
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Anna Rosinus
Porters Five forces: New Entrants
new entrants add production capacity, strive for market share and
profits
likelihood of entrance is largely dependent on market entry barriers
such as:
initial lump sum investment and other fixed costs ( economies of scale)
product differentiation & marketing ( existing consumer preferences)
market saturation
level of switching costs, consumer lock-in, established industry standards,
network effects/externalities
access to distribution channels (e.g. shelf space)
government policies

what determines the intensity of the forces?
35 - 1
Anna Rosinus
Porters Five forces: Substitutes
substitutes = products that appear to be different but can satisfy the
same need as another product

what determines the intensity of the forces?
35 - 2
Anna Rosinus
Porters Five forces: Substitutes
substitutes = products that appear to be different but can satisfy the
same need as another product

what determines the intensity of the forces?
35 - 3
Anna Rosinus
Porters Five forces: Customers/Buyers
buyers bargaining power is high where
plenty alternatives/substitutes
low switching costs
purchased volume accounts for a large share of your total sales, in
general linked to small number of different customers (ABC)
threat of backward integration
cost/price sensitive (e.g. cost of purchased good accounts for a large
share of their total costs)
quality = relatively unimportant (e.g. input factors as commodities)
transparency and availability of price and quality information
what determines the intensity of the forces?
35 - 4
Anna Rosinus
Porters Five forces: Suppliers
suppliers bargaining power is high where
few plenty alternatives/substitutes
high low switching costs
purchased volume accounts for a minor large share of their your total
sales
threat of forward backward integration
quality = relatively unimportant (e.g. highly specialised inputs)
what determines the intensity of the forces?
35 - 5
Anna Rosinus
Porters Five forces: Existing Competitors
rivals are interdependent companies, whose strategic moves may
cause retaliation
competitive intensity depends on:
number (& diversity) of companies involved
( perfect competition, but a small number of competitors doesnt
automatically imply no rivalry)
growth of the market/industry
characteristics of products/services: commodities vs. differentiated/
specialised products
exit barriers (comp. entry barriers, in particular lump-sum investments,
highly specialised equipment)
largely linked to Industry Life Cycle ()
what determines the intensity of the forces?
35 - 6
Anna Rosinus
Industry Life Cycle
what determines the competitive intensity of an industry?
Johnson et al. (2011)
36
Porters 5 forces
47
competitive
rivalry
(intensity)
customers
(buyers)
bargaining
power
substitute
products or
services
(threat)
suppliers
bargaining
power
new
competition
(threat)
Anna Rosinus
Determine Porters Five forces for either Audi or Coca Cola
group work
Anna Rosinus
Implications of Five Forces Analysis
in general: understanding the drivers of attractiveness and profitability
before market entry:
identification of industry attractiveness
which industries/markets to enter?
after market entry
identification of strategies that can influence the five forces,
e.g. vertical integration aimed at building/raising barriers to entry OR
creating customer lock-in
what does that tell us?
37
Anna Rosinus
Porters Five Forces: Some Comments
problems:
defining industries and markets properly in particular how
narrow/broad...
e.g. BMW is No. 11 in the global automobile industry, but No 1 in the
luxury segment
1
converging and/or overlapping industries
e.g. digital industries with mobile phones/cameras/mp3 players
updates:
consideration of other stakeholders and/or complements as 6
th
force:
complementary organisations enhance the attractiveness of a business to
customers or suppliers, e.g. e-book stores and e-book readers (NOT amazon)
what are potential shortcomings?
1) data source: OICA 2012
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Competitive Intelligence
primary activity of competitive intelligence (business intelligence) is to
monitor competitors in order to support strategic planning
competitive intelligence is a systematic program for gathering and analyzing information
about your competitors activities and general business trends to further your own
companys goals.
1

sources of competitive intelligence:
internet (incl. social media, investor relations websites )
press
financial reports
trade shows
information brokers
drawing a distinct boundary between legal and ethical business
practices as mentioned above and industrial espionage is crucial but
nor easy
how to monitor competitors?
1) Kahaner, L. (1997)
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Benchmarking
comparing an organisations performance (typically a set of
performance indicators or key success factors, such as quality, price,
innovation) with others (typically its competitors)
2 approaches:
industry/sector benchmarking: comparison with other organisations in the
same industry/sector
best-in-class benchmarking: comparison of an organisations
performance or capabilities with best-in-class wherever that is found,
e.g. British Airways benchmarked its refuelling operations against Formula 1
related approach: strategy canvas
comparison with competitors
basis: critical success factors
result: blue oceans ()

how to evaluate ones performance?
Johnson et al. (2011)
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Anna Rosinus
Benchmarking
different kinds of visualisation:
radar (or spider) chart
line chart
various possibilities, e.g. :
comparison with 1 or 2 selected competitors
comparison with the closest or the worst
and the best performer in the industry
comparison with the best-in-class
how to?
identification of key success factors
evaluation of the companies, ideally in a
workshop and/or by consulting external experts
visualisation & discussion of conclusions
how to evaluate ones performance?
source: jboye.com ; atkearney.de
41
Anna Rosinus
Benchmarking
related approach: strategy canvas
comparison with competitors
basis: critical success factors
result: blue oceans ()

how to evaluate ones performance?
Johnson et al. (2011)
Anna Rosinus
Example: Benchmarking
1. Please list the key success factors (KSF) for the smartphone industry (column 1)
2. Please compare the performance of Apple and Samsung (columns 2&3)
3. visualise your results (use the right hand part of the table as grid lines)
(e.g. use 0 as worst and 5 as best rating)
group work
further key success factors: performance/speed, battery, connectivity, additional services warranty/guarantee
as well as support (software updates), camera, Operating System
KSF Apple Samsung
worst best
design
4 3
image
4 3-4
price
2 3-4
display
quality/resolution
4 4
usability
4 3-4
42 - 1
Anna Rosinus
Example: Benchmarking
1. Please list the key success factors (KSF) for the smartphone industry (column 1)
2. Please compare the performance of Apple and Samsung (columns 2&3)
3. visualise your results (use the right hand part of the table as grid lines)
(e.g. use 0 as worst and 5 as best rating)
group work
further key success factors: price
KSF Apple Samsung
worst best
handling, usability
3 4
size (as small as
possible) and weight
4 3
material, quality,
hardware features
5 3
software features,
compatibility
3 4
design
4 4
42 - 2
Anna Rosinus
Example: Benchmarking
1. Please list the key success factors (KSF) for the smartphone industry (column 1)
2. Please compare the performance of Apple and Samsung (columns 2&3)
3. visualise your results (use the right hand part of the table as grid lines)
(e.g. use 0 as worst and 5 as best rating)
group work
further key success factors: marketing/advertising, price
KSF Apple Samsung
worst best
easy to handle,
usability, software
4 3
design
5 3
display (size,
resolution)
3 3
camera quality
4 4
availability of
Apps
5 3
42 - 3
Anna Rosinus
Trends and Forecasting
forecasting is based on a set of assumptions,
BUT mistakes in the assumptions are the most frequent reason for
forecasting errors
techniques:
extrapolation
brainstorming
expert opinion
statistical modelling
scenario writing
how to learn about future developments?
pathstoknowledge.net
43
Anna Rosinus
v
Strategic management Process (1)
Environmental
Scanning



External:
Opportunities and
Threats
Natural Environment:
Resources and climate
Societal Environment:
General forces
Task Environment:
Industry analysis
Internal:
Strengths and
Weaknesses
Structure
Chain of command
Culture, beliefs,
expectations, values
Resources: Assets,
skills, competencies,
knowledge
Strategy Formulation Strategy
Implementation
Evaluation
and Control
45
Anna Rosinus
Internal Scanning & Organisational Analysis
The Resource-Based Approach to Strategy
Value Chain Analysis
Scanning (Internal Resources) Functional Resources and Capabilities
Corporate Culture as a Competitive Advantage

what to expect?
44
SWOT
OPPORTUNITIES &
THREATS (CH. 2)
STRENGTHS
(sustainable
competitive
advantages) &
WEAKNESSES
(competitive
disadvantages)
OVERVIEW CHAPTER 3
(1) RBV
Resource Based
View
(2) Value Chain
Analysis
(Porter)
RESOURCES,
CAPABILITIES,
COMPETENCIES
DISTINCTIVENESS:
VRIO framework
(Barney)
ACTIVITIES
(functional units)
+ CORPORATE
CULTURE
activities to
drop
activities to
improve/
strengthen
R, C no longer
necessary (rigidities)
resources &
capabilities to
acquire/develop
cost drivers,
profit pools
Anna Rosinus
The Resource-Based Approach to Strategy (1)
resources: an organisations assets what we have
tangible
intangible
capabilities: a corporations ability to exploit its resources
core and distinctive competencies what we do well
competency: a cross-functional integration and
coordination of capabilities
core competency: a collection of competencies
that is wide-spread throughout the corporation
across divisional boundaries;
something the corporation does exceedingly well
distinctive competency: core competencies
that are superior to those of the competition


what makes the difference?
capabilities
resources
competencies
Anna Rosinus
The Resource-Based Approach to Strategy (1)
resources: an organisations assets what we have
tangible
intangible
capabilities: a corporations ability to exploit its resources
core and distinctive competencies what we do well
competency: a cross-functional integration and
coordination of capabilities
core competency: a collection of competencies
that is wide-spread throughout the corporation
across divisional boundaries;
something the corporation does exceedingly well
distinctive competency: core competencies
that are superior to those of the competition


what makes the difference?
capabilities
resources
competencies
46 - 2
Anna Rosinus
The Resource-Based Approach to Strategy (2)
threshold capabilities the qualifiers - are needed to achieve parity
with competitors a given market,
whereas distinctive capabilities the winners help to achieve
competitive advantage, they are of value to customers and difficult to
imitate for competitors
dynamic capabilities help an organisation to renew and recreate its
strategic capabilities according to changes in the environment
redundant capabilities
were effective in the past but become less relevant due to changes and
developments in the industry
might form rigidities that inhibit change and become a weakness

what makes the difference?

47
Anna Rosinus
VRIO Framework (Barney)
Value
Rarity
Inimitability
Organisation
=> resources, capabilities and competencies meeting these criteria
provide a basis for achieving sustainable competitive advantage

what makes resources, capabilities and competencies distinctive?
Wheelen/Hunger (2012) adapted from Jay Barney (1991)
48
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VRIO Framework - Implications
how to achieve competitive advantage?
Johnson et al. (2011)
Anna Rosinus
VRIO How to?
list resources and capabilities
estimation of customer value
check existing competitors for their performance in these resources
& capabilities
check potential entrants/substitutes for their performance for your
most valuable resources
analyse cost of imitation
tradability & availability
can be secured?
knowledge = shared
with how many people is the capability linked?
can the organisation make use of these resources and capabilities?
(e.g. appropriate control systems, incentives?)
how to investigate the distinctiveness of resources and capabilities?
Anna Rosinus
VRIO How to?
list resources and capabilities
estimation of customer value
check existing competitors for their performance in these resources
& capabilities
check potential entrants/substitutes for their performance for your
most valuable resources
analyse cost of imitation
tradability & availability
can be secured?
knowledge = shared
with how many people is the capability linked?
can the organisation make use of these resources and capabilities?
(e.g. appropriate control systems, incentives?)
how to investigate the distinctiveness of resources and capabilities?
Anna Rosinus
VRIO How to?
resources
local restaurants (number, location)
recipes
brand
quality of ingredients
employees
franchisee network
capabilities
ability to offer global as well as local menus
high-quantity, low-cost sourcing
Marketing
delivering uniform quality worldwide
knowledge transfer

Please try to apply the VRIO framework to McDonalds:
What are important resources and capabilities? (~3 of each)
Are these capabilities valuable?
Are they rare?
How costly is their imitation?
Is the company organised in order to make use of these capabilities?
Anna Rosinus
Sustainable Competitive Advantages
Durability: how fast do a firms underlying resources, capabilities, or
core competencies depreciate or become obsolete
Imitability: how easily can a firms underlying resources, capabilities,
or core competencies can be duplicated by others
Transparency: How difficult is it to understand the relationship of
resources and capabilities that support a successful strategy?
Transferability: Can competitors gather those resources and capabilities?
Replicability: If competitors duplicated the resources and capabilities will
they be able to imitate the other firms success?
Explicit knowledge (easy to articulate and communicate)
Tacit knowledge (not easy to communicate, because the knowledge is
deeply rooted in employee experience or in the companys culture)

what makes a competitive advantage sustainable?
49 - 1
Anna Rosinus
Sustainable Competitive Advantages
what makes a competitive advantage sustainable?
49 - 2

Anna Rosinus
Access to Capabilities and Competencies
internal capability development
building and recombining
leveraging capabilities
stretching capabilities
external capability development
mergers and acquisitions
forming alliances
how to develop capabilities and competencies?
ceasing (non-core)
activities
stopped, outsourced or
reduced in cost
monitor outputs and
benefits
better understand sources
of consumer benefit
awareness development

training, development and
organisational learning
51
Anna Rosinus
Value Chain Analysis
how do different activities contribute to consumer benefit?
source: adapted from Johnson et al. (2011)
upstream downstream
52
Anna Rosinus
Value Chain Analysis
how do different activities contribute to consumer benefit?
source: adapted from Johnson et al. (2011)
Ford 1920s/30s
Anna Rosinus
Value Chain Analysis
1. draw each product lines value chain
2. examine the linkages within each product lines value chain
3. assign the costs
4. identify drivers for cost reduction OR for differentiation depending
on your strategy (cost leadership or differentiation)
5. analyse competitive advantages for each activity
6. identify profit pools
7. make recommendations, e.g. concerning make or buy-decisions
how to use value chain analysis?
53
Anna Rosinus
Value Chain Analysis
use the value chain analysis to develop...
a cost leadership strategy for
Abercrombie & Fitch
OR
a differentiation strategy for
Volkswagen
group work
source: adapted from Johnson et al. (2011)
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Anna Rosinus
Scanning Functional Resources and Capabilities
Marketing
Finance
R&D
Operations
HR
IT
what about the different functional units of a company?
55
Anna Rosinus
Marketing?
market position
what do we want to achieve?
market leader, market share, growth etc.
market segmentation
which customers do we want to serve?
niche segments, luxury class etc.
marketing mix
how do we want to create demand and
competitive advantage?
4P: product, price, place, promotion
how can contribute to corporate and business strategy?
Product
Place
Price
Promotion
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Anna Rosinus
Marketing & Branding
one of the worlds oldest brands
has been created 10k years ago in
India herbal paste chyawanprash
what is a brand? what does branding mean?
branding was formerly known as a way to
tell one person's cattle from another by
means of a hot iron stamp
a brand is a name, term, design, symbol, or any
other feature that identifies one seller's good or
service as distinct from those of other sellers.
American Marketing Association Dictionary
brands as a means of mass-marketing:
industrialisation (19th century)
centralisation of production
first packaged goods
trademarks as a visualisation of brands"
Anna Rosinus
Best Global Brands
other strategic marketing subjects?
source: www.interbrand.com
2
0
1
2

2
0
0
9

2009: 1. 2009: 20. 2009: 2. 2009: 7. 2009: 3. 2009: 4. 2009: 6. 2009: 9.
2009: 19. 2009: 8. 2009: 12. 2009: 15. 2009: 10. 2009: 14. 2009: 11. 2009: 13.
2009: 16. 2009: 24. 2009: 5 2009: 43.
TOP WINNERS
BIGGEST LOSER
STABLE PERFORMERS
Anna Rosinus
Best Global Brands
other strategic marketing subjects?
source: www.interbrand.com
2
0
1
3

2009: 1. 2009: 20. 2009: 2. 2009: 7. 2009: 3. 2009: 4. 2009: 6. 2009: 9.
2009: 19. 2009: 8. 2009: 12. 2009: 15. 2009: 10. 2009: 14. 2009: 11. 2009: 13.
2009: 16. 2009: 24. 2009: 5 2009: 43.
TOP WINNERS
BIGGEST LOSER
STABLE PERFORMERS
Anna Rosinus
Finance?
provision and control of financial resources
issuance of shares/management of shareholders
bank loans
optimisation of financial leverage (ratio of total debt to total assets)
capital budgeting
analysis of investment projects
allocation of funds (capex and opex)
how can contribute to corporate and business strategy?
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Anna Rosinus
R&D?
R&D intensity amount of R&D expenses in relation to e.g. total costs
or sales revenue
development and use of innovative technology
technology deployment/technology transfer bringing new ideas to
market
how can contribute to corporate and business strategy?
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Anna Rosinus
Example Technology Transfer: Augmented Reality
practical application
Anna Rosinus
Operations?
manufacturing type: how & where a product/service is manufactured:
continuous systems such as assembly lines
intermittent systems such as job shops
economies of scale experience/learning curve
how can contribute to corporate and business strategy?
the law of experience
the unit cost value added to
a standard product declines
by a constant % (typically 20-
30%) each time cumulative
output doubles.
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Anna Rosinus
Example Operational excellence: Toyota
process rather than product innovation
due to lacking resources after world war II efficiency
was key (material usage, waste & stock minimisation
just in time input deliveries, instantaneous problem
solving = jidoka)
andon cord - line stops, kanban - material "calls",
intelligent factory layouts
continuous improvement - kaizen - involving everybody,
incremental instead of big changes
The Toyota Way - a set of principles and behaviors
continuous improvement & respect for people
=> long-term success
organisational learning
developing people
although Toyota doesn't protect this secret they still stand out


practical application
Anna Rosinus
HR?
management/organisation of teams
autonomous (self-managing)
cross-functional
management/use of temporary workers
increasing flexibility reduced impacts of cyclicality
internal differences in the workforce 2 groups
quality of work life
empowerment: participative problem solving
rewards: not only monetary
improvements in working environment and work-life balance
training
human diversity (different races, cultures and backgrounds)
succession and knowledge management

how can contribute to corporate and business strategy?
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Anna Rosinus
IT?
automation
back-office processes
help yourself solutions
enhance key business functions
better and faster information for management
communication/information exchange (entire value net, i.e. with
subsidiaries, suppliers & customers intranet, extranet, EDI)
knowledge management (intranet, wiki)
development of competitive advantages
time,
scope, and
quality of processes

how can contribute to corporate and business strategy?
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Anna Rosinus
Corporate Culture
the collection of beliefs, expectations and values learned and shared
by a corporations members and transmitted from one generation of
employees to another
there are three ways to do any job: the wrong way, the right way and
the company way(the way we do it around here)
depth & breadth of culture
what about a companys soft basis?
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Anna Rosinus
Corporate Culture: Functions
identity stability of the
organisation as a
social system
commitment frame of reference
and guide for
behaviour
what about a companys soft basis?
Anna Rosinus
Corporate Culture: Functions
identity stability of the
organisation as a
social system
commitment frame of reference
and guide for
behaviour
what about a companys soft basis?
Anna Rosinus
Corporate Culture: Functions
identity stability of the
organisation as a
social system
commitment frame of reference
and guide for
behaviour
what about a companys soft basis?
2010 was a big year for
Facebook and the
revelation of the 2010
strategy infographic
was no exception.
Mark Zuckerberg
unintentionally revealed
the infographic that was
printed on the inside of
his hoodie at the D8
conference.
The hoodie with the
famous infographic was
reportedly given to all
Facebook employees in
2010.