1. home and garden
2. home furnishings

Discussion Notes
Teaching Notes: Finntrack
Strategy: Analysis and Practice ©2005 McGraw-Hill Education Europe
Index
• Workshop
– Case Analysis
– Debate
– Case Questions
– How to Use Your Workshop Resources
– Disclaimer
– Learning Objectives
• Multinational Corporations
• Introduction to Retailing and IKEA
– Introduction to IKEA
– Corporate Strategy
• Business Analysis
– Business Drivers
– Quantitative Methods
– Strategic Business Analysis
– Organisation
– Organisational Culture
– Financial Statements - The System
– Financial Statements - Analysis
• Financial Ratios
• Competitive Position: Competitive Advantage
– Strategic Planning
– Competition
– What is Sustainable Competitive
Advantage
– Sustainable Competitive Advantage
– Competitive Strategies
Click on Image
Index
• Strategic Capability: Core Competence
– Corporate Capabilities
– Core Competency
– Strategic Intent
– Innovation
– Theory of Constraints
– Value Chain
• IKEA Modified Value Chain
– Six Sigma
• Global Strategies
• Process Analysis for Strategic Decisions
– Game Theory
• Competitive Strategy: the Analysis of Strategic
Position
– Lecture
• Competitive Strategy: the Analysis of Strategic
Capability
– Lecture
• Global Strategies and International Advantage
– Lecture
• Process Analysis for Strategic Decisions
– Lecture
Click on Image
Workshop
This workshop series is designed to compliment Teaching and Learning
Strategies for undergraduate, postgraduate and executive level Strategic
Management and related programmes and courses using the case studies
featured in the text below.
The overall aim is to support the learning contents offered in the relevant chapters
of the book whilst expanding participants’ knowledge and skills base required to
understand, review and analyse the decisions taken during the company’s
strategy development and implementation processes.
Strategy Analysis and Practice
John McGee, Warwick Business School
Howard Thomas, Warwick Business School
David Wilson, Warwick Business School
Case Analysis
A case study is a particular method
of qualitative research.
Rather than using large samples and
following a rigid protocol to examine
a limited number of variables, case
study methods involve an in-depth,
longitudinal examination of a single
instance or event: a case.
They provide a systematic way of
looking at events, collecting data,
analyzing information, and reporting
the results.
As a result the researcher may gain
a sharpened understanding of why
the instance happened as it did, and
what might become important to look
at more extensively in future
research.
Click on Image
Source: doyleresearch
Case Analysis
Case studies lend themselves especially to generating (rather than
testing) hypotheses.
• The scope and relevance of case
studies
• Types of case study
• Illustrative case studies
• Exploratory case studies
• Critical instance case studies
• Program implementation case
studies
• Program effects case studies
• Cumulative case studies
• Business school case studies
• Medical case studies
• History of the case study
• Conclusions
• Notable case studies
• References
• See also
• External links
Click on Image
Source: © Inter IKEA Systems B.V.
2002-2006
Workshop Debate
Workshop discussion topics have been divided into six parts according to the relevant
chapters of the book involved in the case study:
1.
2.
3.
4.
5.
6.
Introduction
Business Analysis
Competitive Position: Competitive Advantage
Strategic Capability: Core Competence
Global Strategies
Strategic Decision Making
You should ensure that you have understood the contents of chapters 6, 7, 11 and 13 prior to
attending any of the above debates.
Also see:
How to Use Your Workshop Resources
Learning Objectives
Learning from Case Studies: A Short Guide for Students
Case Questions
Please Note:
At your instructor’s discretion the indicative questions below and elsewhere in this
resource may be varied or deemed unnecessary for teaching and learning
purposes for some courses or modules.
1. Using the information given in the Case Study and this resource,
describe the Elements of IKEA’s Organisational Culture.
2. How has the Organisational Culture shaped IKEA’s Business
Model?
3. Measure the value of IKEA’s Organisational Culture.
Also see Learning Using Case Studies for further information
Also see A Model for Case Analysis and Problem Solving
How to Use Your Workshop Resources
Viewing
You will need either MS PowerPoint program or PowerPoint Viewer installed on
your computer. The latter may be downloaded free from Microsoft website here.
Navigation
The Learning Contents (Literature Reviews) are linked to a relevant public
domain on the Internet.
Most, if not all pictures/images are ‘clickable’, i.e. linked to its source which
provides further information on the topic or the copyright holder.
If your version of PowerPoint does not show navigation buttons on the slide,
right click on the screen and select your destination from the dialogue box.
Alternatively use the small arrowheads,
indicating ‘previous’ and ‘next’.
Disclaimer
This information is provided with the understanding that the authors and publishers
do not assume any legal responsibility for the completeness or accuracy of the
contents or any opinions or views expressed on these pages or linked destination
sources.
It is the nature of the media (Internet) that some of the pages may not always be
available due to broken or dead links, withdrawals, etc. Whilst the publishers will
be pleased to take any appropriate corrective action, for example, by replacing or
removing the sources when possible, they unable to assume any legal
responsibility for unavailability of any third party material for whatever reason
beyond their direct control.
Learning Objectives
The main objective of the workshops is to evaluate IKEA’s corporate strategic
planning process and outcomes and their impact on the company’s business level
operations.
Participants will have an opportunity of developing and enhancing their
• strategic thinking and internet research skills
• analytical and critical thinking skills by reviewing the factors that influenced
corporate centre's decisions on the business
Multinational Corporations
A multinational corporation (MNC) or multinational enterprise (MNE) or
transnational corporation (TNC) is a corporation/enterprise that manages
production establishments or delivers services in at least two countries.
•
•
•
•
Critiques
Examples
In fiction
Furnishings
• International Furnishing
Market
• See also
• Fostering Growth and
Promoting a Responsible
Market Economy - A G8
Declaration
Annual Report on
the Guidelines for
Multinational
Enterprises The
2005 edition
includes a special
focus on corporate
responsibility in the
developing world
Multinational Corporations
Multinational corporations (MNC) are often divided into three broad groups:
• Horizontally integrated multinational
corporations manage production
establishments located in different countries
to produce same or similar products.
• Vertically integrated multinational
corporations manage production
establishment in certain country/countries to
produce products that serve as input to its
production establishments in other
country/countries.
• Diversified multinational corporations
manage production establishments located in
different countries that are neither horizontally
or vertically integrated.
Multinational Corporations
Multinationals have played an
important role in globalization. Given
their international reach and mobility,
prospective countries, and sometimes
regions within countries, must compete
with each other to have MNCs locate
their facilities (and subsequent tax
revenue, employment, and economic
activity) within. To compete, countries
and regional political districts offer
incentives to MNCs such as tax
breaks, pledges of governmental
assistance or improved infrastructure,
or lax environmental and labour
standards. This process of becoming
more attractive to foreign investment
can be characterized as a race to the
bottom.
Click on Image
Source:
Introduction to Retailing
Retailing consists of the sale of
goods/merchandise for personal or
household consumption either from a fixed
location such as a department store or kiosk,
or away from a fixed location and related
subordinated services.[1] In commerce, a
retailer buys goods or products in large
quantities from manufacturers or importers,
either directly or through a wholesaler, and
then sells individual items or small quantities
to the general public or end user customers,
usually in a shop, also called store. Retailers
are at the end of the supply chain. Marketers
see retailing as part of their overall
distribution strategy.
Click on Images
Source: © Inter IKEA Systems B.V.
2002
Introduction to Retailing
•
•
•
•
Shops and stores
Retail pricing
See also
References
Click on Image. Larger Image
Source: San Diego State University
Introduction to IKEA
IKEA is a Swedish home furnishings
retailer. It has 231 stores in 33 countries,
most of them in Europe, the rest in the
United States, Canada, Asia and
Australia. More than 20 opened during
2005. IKEA is one of the few store
chains to have locations both in Israel
and in other Middle Eastern nations.
IKEA is generally pronounced (IPA
/i'ke.a/) but in many English-speaking
regions, it is pronounced (IPA /aɪ'ki:ə/)
rhyming with the word "idea".
The IKEA catalogue, containing about
12,000 products, is printed in 160 million
copies (2006) worldwide, and distributed
free of charge. [2]
IKEA is famous for its affordable
furniture which consumers are required
to assemble for themselves.
Click on Image
Source: en.wikipedia.org
Introduction to IKEA
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Overview
Organization
History
Products
Financial
Community Impact
Store Format
Corporate structure
Criticisms
Diversity
Design Reform
IKEA Organisational Culture
Popular Culture
IKEA's Debut in Each Country
Corporate Strategy
See also
Notes
External links
• Data
• Directory
Click on Image
Source: Inter IKEA Systems B.V. 1999 - 2006
Introduction to IKEA
Ingvar Kamprad, believes that: "Most
things still remain to be done - a
glorious future! Time is your most
important asset. Split your life into10minute units and sacrifice as few as
possible to futurities" (Mclvor, Laurance,
1994: 38).
The corporate culture of Ikea is built
upon this philosophy all the way from
design teams to suppliers and to the
customer. A continuous strife for
improvement in all areas of the value
chain is an effective way to shape the
industry to better fit Ikea's future
strategies. Due to the uniqueness of
Ikea's strategic positioning, being the
largest competitor in its field, the firm
has the advantage of setting the phase
of the industry.
Click on Image
Source: IKEA Deutschland
Introduction to IKEA
Bureaucracy is fought at all levels in the
organization. Kamprad believes that
"simplicity and common sense should
characterize planning and strategic
direction" (Bartlett et Al, 1993: 78).
In addition, the culture emphasizes
efficiency and low cost which is not to be
achieved on the expense of quality or
service.
Symbolic policies, such as only flying
economy class and stay at economical
hotels, employing young executives and
sponsoring university programs have
made cost part of corporate culture and
has further inspired the influx of
entrepreneurship into the organization.
Source: Johan Olsson
Click on Image
Source: www.csd.uwo.ca
Introduction to IKEA
For instance, all design teams enjoy
complete autonomy in their work, but
are expected to design new appealing
products regularly.
Click on Image
Source: Themanager.org
Corporate Strategy
• Background
• Objectives
• International Strategy Case Study: How Ikea of Sweden Got to India
• Financial Strategy Re. Case Study: How Ikea of Sweden Got to India
• Marketing
• Advertising and Public Relations
• Management Strategy
Re. Case Study: How Ikea of Sweden Got to India
Click on Image. Larger Image
Source: © The M. Polo Group, 2002
• Cultural Challenge
• Corporate and Social Responsibility
• Conclusions
Re. Case Study: How Ikea of Sweden Got to India
• Also see
• Ikea knockoffs a hit with India's elite Swedish chain has no stores there, but its
furniture catalog is used by carpenters as a guide to copy designs
• In India, it’s IKEA without the assembly
Corporate Strategy - Background
Background
• The Values that Characterize IKEA
• Vision
• Objectives
• Mission (IKEA Concept)
• Product
• Turnover
• Stores
• Store Openings 2005 - 2006
• IKEA Catalogue
• IKEA Franchising
© Inter IKEA Systems B.V. 2003 - 2006
Click on Image
Source: © Inter IKEA Systems B.V. 1999
- 2004
Corporate Strategy - Objectives
The Challenge
IKEA want to increase the return on investment for the catalogue distribution, which is a
substantial investment, and remain ahead of the competition in terms of business
strategy.
IKEA needs to ensure that catalogue distribution is targeted to reach people who are
likely to be or become IKEA customers in terms of their demographic attributes and their
likelihood to travel to the store.
IKEA requires a solution to maximise their return on investment while expanding their
appeal and maintaining their dominant market position.
Specifically IKEA’s key objectives are to:
• Identify target consumer types and geographic areas
for distribution of catalogue
• Identify types and areas with poor sales potential
• Increase sales return on catalogue expenditure
• Develop business strategy
Source: caci.co.uk
Corporate Strategy - International
• The Internationalization of IKEA
• Joint Ventures
• Alternative Entry Strategies
• Expansion by Franchising
• Supporting Organizational
Structure
• Balance of Autonomy and
Strategic Direction
Click on Image. Larger Image.
Source: © Transcultural Synergy Ltd
Source: Global Perspectives: Case Study: How Ikea of Sweden Got to India
Corporate Strategy - International
Joint Ventures
Ikea will need to look at joint ventures and strategic alliances to become
successful in the Indian market. Since the government requires that local
business operations require 51% control by Indian nationals, Ikea's first step will
be to find franchise owners. These in turn will have to form alliance and joint
ventures to raise enough capital to develop the links necessary to form a
successful entity.
In high-risk markets (defined as those that are not similar to Scandinavian
markets) Ikea's local market strategy is to develop supplier links in the host
country. This is meant to reduce the strategic risk that may result from political
legal and financial issues. By developing a relationship with local suppliers, the
suppliers can provide valuable input into the opportunities and threats.
Joint Ventures mean even more. They establish that the local owner/operators
become an integral part of the stakeholder group. It is expected that they will
therefore be more contentious of operations and therefore be more successful.
Source: Global Perspectives: Case Study: How Ikea of Sweden Got to India
Corporate Strategy - Financial
International Financial Market
• The Foreign Exchange Market Foreign Exchange Market
• Currency options and futures
Derivatives traders at the Chicago Board of Trade.
Foreign Exchange Options by Wikipedia
Click on Image
Source: Wikipedia
Main Text Source: Global Perspectives: Case Study: How Ikea of Sweden Got to India
Corporate Strategy - Financial
Financial Strategy
The cost of establishing a new store (approximately 22,000 items) is quite high
when considering:
•
•
•
•
•
Building acquisition, layout and design
Sourcing franchise owners and human resources
Establishing local supplier links
Advertising and promotion of the new location (catalogues are expensive)
Stocking the new store
The advantage of borrowing money locally is that the cost of borrowing will be
protected from inflation and exchange rate fluctuations. Investment money taken
from reserves of other operations may not carry any interest cost and therefore
be a cheaper source of investment. In the case of India, if Ikea decides to
franchise its operations there, the problem of financing the operation is taken
care of through franchising fees and royalties. Return of profit/royalties to Ikea of
Sweden could be facilitated in the transfer of product produced in India thus
increasing the marginal return from everyone involved.
Source: Global Perspectives: Case Study: How Ikea of Sweden Got to India
Corporate Strategy - Financial
Financial Strategy
Profits
Profits in India should be maintained at a similar level to other countries. Since
the per capita income of Indian peoples is substantially lower than other markets,
product will have to be modified to lower price categories and volumes will have
to increase to offset the difference.
Except in the largest cities, operation costs should be lower than Western
Europe. Labour costs are substantially lower in India, but the Ikea store concept
requires little human resources, so cost reductions must rely on other overhead
such as store, warehousing, power, taxes and advertising.
Probably the most effective method for cost reduction is to source a higher
percentage of goods form India. Even Scandinavian designs could be
reproduced in India.
Source: Global Perspectives: Case Study: How Ikea of Sweden Got to India
Corporate Strategy - Marketing
Marketing
Printable Fact Sheets:
• The IKEA catalogue
• How IKEA creates its low prices
• How IKEA is organised
• IKEA products are manufactured all over
the world
• The right quality for IKEA products
• IKEA provides solutions for all domestic
needs
• IKEA stores - everything under one roof
Distribution - from supplier to store
Click on Image
Source: Inter IKEA Systems B.V.
1999 - 2006
Click here to IKEA main menu
Corporate Strategy - Marketing
Marketing
Ikea does not have its own manufacturing
facilities. Instead, it is using subcontracted
manufacturers all over the world for supplies. All
research and development activities are, however,
centralized in Sweden.
In order to maintain low cost, Ikea shoppers are
Pro-sumers - half producers, and half consumers
(Normann, 1993: 70). In other words, they have to
assemble the products themselves.
To facilitate shopping, Ikea provides catalogs, tape
measures, shopping lists and pencils for writing
notes and measurements. Car roof racks are
available for purchase at cost and Ikea pick-up
vans/mini trucks are available for rental
(Economist, 1994: 101).
Click on Image
Source: Inter IKEA Systems B.V.
1999 - 2006
Source: Johan Olsson, 1996
Corporate Strategy - Marketing
Marketing
Effective marketing through catalogues
usually attracts the customer at first, what
keeps customers coming back is good
service.
Ikea believes that a strong in-stock position
in which the most popular style and design
trends are correctly anticipated is crucial to
keep satisfied customers. For that, Ikea
depends on leading-edge technology.
According to Ikea's logistics manager, "there
are a lot of Just-In-Time concepts built into
how we're trying to do business" (Chandler,
1993: 12). Ikea has developed its own global
distribution network.
Source: Johan Olsson, 1996
Click on Image
Source: Inter IKEA Systems B.V.
1999 - 2006
Corporate Strategy - Marketing
Marketing
By utilizing control points in the distribution
cycle, the firm is able to insure timely deliver
of products to retail stores all over the world.
Internationally, these stores range in size
from 20,000 to 30,000 square feet in Hong
Kong and in Singapore to 500,000 square
feet in Stockholm, Sweden. Ikea has over
1,800 suppliers located in over 50 different
nations (Retail Business, 1995: 78).
Ikea's, marketing manager believes that
Consumer tastes are merging globally.
Click on Image
Source: Inter IKEA Systems B.V.
1999 - 2006
Source: Johan Olsson, 1996
Corporate Strategy - Marketing
Marketing
In one example, Ikea, which has been
importing the "streamlined and
contemporary Scandinavian style" to the
United States since 1985, found at least
one opportunity to export an American style
to Europe, as Europeans are picking up on
some American furnishing concepts. In
order to respond to this new demand, Ikea
now market "American style" furnishings for
the European market.
Source: Johan Olsson, 1996
Click on Image
Source: © 2006 by the US-China Business
Council
Corporate Strategy - Marketing
Advertising and Public Relations
Ikea's success is based on the relatively simple
idea of keeping the cost between manufacturers
and customers down. According to Ingvar
Kamprad, the founder of Ikea; "To design a desk
which may cost $1,000 is easy for a furniture
designer, but to design a functional and good desk
which shall cost $50 can only be done by the very
best. Expensive solutions to all kinds of problems
are often signs of mediocrity." (Chandler, 1993: 12)
Costs are kept under control starting at the design
level of the value-added chain. Ikea also keeps
costs down by packing items compactly in flat
standardized embalages and stacking as much as
possible to reduce storage space during and after
distribution in the logistics process (Economist,
1994: 101).
Source: Johan Olsson, 1996
Click on Image
Source: Forbes
Corporate Strategy - Advertising and PR
Advertising and Public Relations
• Online Promotion
• IKEA stand at HotelExpo 2006 exhibition
• IKEA catalog “Furnishing Recipes for
Hotels Big and Small”
• “Fixhult” print ad for IKEA
• “Uninterruptible Food Supply”, IKEA print
ad
• IKEA print ad “Any table can become
a smorgasbord”
• IKEA promotion page “Office of Decorum”
Click on Image
Source: © 1995–2006
Art. Lebedev Studio
Corporate Strategy - Advertising and PR
Advertising and Public Relations
• “Four Neat Examples of Orderly
Business Practices”, an IKEA print
ad
• IKEA B-to-B website
• B2B IKEA
• Do you know what’s the Swedish for
“thanks”?
Click on Image
Source: Inter IKEA Systems B.V.
1999 - 2006
Corporate Strategy - Management
IKEA Management Strategy
IKEA is a very successful multinational
corporation, which indicates that earlier
discussed focused generic, or long-term
strategy of cost leadership and product
differentiation has served it well. IKEA
approaches unknown, small, high risks
markets by franchising.
So this company actively expands in
this field as well.
IKEA has a lot of subsidiaries in many
countries of the world. Franchisees
have to carry basic items, but have the
freedom to design the rest of the
products.
Click on Image. Larger Image
Source: Kanji Quality Culture
Also see Management by Wikipedia.
Source: Global Perspectives: Case Study: How Ikea of Sweden Got to India
Corporate Strategy - Management
• Cost leadership as a part of the management process
• Differentiation strategy
Click on Image
Source: Professional Management Review Africa
Corporate Strategy - Culture
Cultural Challenge
In international business, the culture is
very important and we can consider one
fundamental element " the culture
shock" where there are several stages in
the difference of the country’ culture: the
honeymoon stage (we know that it is a
new culture and we want to be there),
the irritation-hostility stage, the gradual
adjustment and the bi-culturalism, at this
stage, the company gets a comfortable
way in the settlement of the new culture.
Click on Image
Source: Inter IKEA Systems B.V.
1999 - 2006
Source: Global Perspectives: Case Study: How Ikea of Sweden Got to India
Corporate Strategy - Culture
Cultural Challenge
But, few countries in the world have such an
ancient and diverse culture as India. India’s
culture has been enriched by successive
waves of migration, which were absorbed into
the Indian way of life. And, the diversity lies
the continuity of Indian civilization and social
structure from the very earliest times until the
present day. Modern India presents a picture
of unity in diversity to which history provides
no parallel.
Moreover, the Indian Council for Cultural
Relations (ICCR) has been working to project
Indian culture abroad and to bring to India the
rich manifestations of international culture. It
has thus become a major vehicle of
international cultural exchange.
Doing Business in India
Source: © 2000-2005 Executive
Planet Inc.
Source: Global Perspectives: Case Study: How Ikea of Sweden Got to India
Corporate Strategy - Culture
Cultural Challenge
We can also focus on the Indian’s process of
development, which has been accompanied by
significant social changes and an increasing
awareness about issues.
This period has also seen the burgeoning of the
voluntary movement in India.
Today, the Government makes constant
attempts to promote values like democracy and
independence and India is working to have
equal opportunities in all spheres of life. We
cannot rule out the Indian Art, because it is also
an Art of social, political and religious
influences. It changed and evolved with the
evolution of a civilization, which is full of
remarkable innovation.
Click on Image
Source: india-seminar.com
Source: Global Perspectives: Case Study: How Ikea of Sweden Got to India
Corporate Strategy - Culture
Cultural Challenge
Finally, we can make point on Indian religion,
because it is another way of life and an
entire part of Indian tradition.
So in doing business with India, IKEA have
to make attention with the culture and the
communication (verbal and non-verbal)
because the communication can be
interpreted in different meanings and can
provoke some mistakes, misunderstanding
and also some troubles.
Click on Image
Source: © 2003 international-businesscenter.com
So, the firm has to be careful with the
context where it decides to set up its
business.
Source: Global Perspectives: Case Study: How Ikea of Sweden Got to India
Corporate Strategy - CSR
Corporate and Social
Responsibility
“Is it possible to make traditional business
objectives and social and environmental
responsibility work together for the benefit
of the many? We believe they can work
very well together.
IKEA makes good business while being a
good business. We realize that we are
only at the beginning and we have a long
way to go but we are proud of the results
achieved so far.
IKEA CSR activity involves three main
areas: children, better living and
environmental projects.”
Click on Image
Source: Inter IKEA Systems B.V.
1999 - 2006
Corporate Strategy - CSR
Corporate and Social
Responsibility
“IKEA wants its products to have the
minimum impact on the environment.
And for these products to be
manufactured in a socially responsible
way.
• Low price but not at any price
• The IKEA code of conduct
• We use resources wisely
• Projects we support
• Read our brochure and report
• UK corporate and social
responsibility”
© Inter IKEA Systems B.V. 2003 - 2006
Corporate Strategy - CSR
Corporate and Social
Responsibility
• Special Report: Tackling Child Labour
• Child Labour Resource Guide
Source:
Corporate Strategy - Conclusions
Conclusion, Appendices and References
Together with innovative changes in the value chain, where consumers become Pro-sumers
and suppliers are turned into consumers, the concept of marketing high quality products at
low cost through a focused generic strategy, intended for the globally emerging middle-class
has served Ikea well.
Centralized control and product standardization is two necessary components of the firm's
long-term strategy.
In addition, the company has facilitated its international expansion through owned
subsidiaries subsidiaries and franchises. Future localization pressures will force Ikea to
change its global strategy in order to become more sensitive to local demands.
Greater emphasis on joint ventures and strategic alliances represent possible vehicles to
further build on Ikea's focus strategy. A new transnational oriented organizational structure
would further provide the necessary infrastructure needed to support such vehicles towards
true internationalization.
This in turn would impact on the present homogenous Scandinavian culture and introduce
new values, ideas and, perhaps, broaden Ikea's core competencies.
Source: Global Perspectives: Case Study: How Ikea of Sweden Got to India
Business Analysis
1. Benefits of Business
Analysis
2. Roles of Business Analysts
3. Business Process
Improvement
4. Goal of Business Analysts
5. External Links
Also see
Quantitative Method
From Wikipedia, the free
encyclopedia
Larger Image
Source: BizEd
Click on Image
Business Drivers
Also see
• Association of Master
Upholsterers and Soft
Furnishers
• Furniture Industry
Research Association
(FIRA)
• Kitchen Specialists
Association (KSA)
• National Bed Federation
(NBF)
• The association for
British Furniture
Manufacturers (BFM)
• Economic Value Added
Larger Image
Source: Metapraxis
Quantitative Methods
Quants Handbook
Lecture 1: Functions & Economic Relationships
Lecture 2: Economic Models/Linear Models
Lecture 3: Basic Differential Calculus
Lecture 4: Optimisation
Lecture 5: Functions of Several Variables
Lecture 6: Unconstrained Optimisation
Lecture 7: Constrained Optimisation
Lecture 8: Growth & Dynamics
Lecture 9: Introduction to Difference Equations
Click on Image
Source: Brian C. McCarthy
Ohio University
Source: Bob Beachill
Leeds Metropolitan University
beach@thenet.co.uk
Strategic Business Analysis
SWOT Analysis
• PEST market analysis tool
• Porter's Five Forces Model
• Resources and Capabilities
• Value Chain
• Managing Your Value
Chain
• Organisation
• Organisational Culture
• attitudes,
• values,
Click on Image
Source: QuantAA
• beliefs,
• norms and
• customs
• Organisational Capabilities
• Financial Analysis
Larger Image
Click on Image
Source: Wikipedia
Organisation
An organization or organisation (read more about -ize vs -ise) is a formal group
of people with one or more shared goals. The word itself is derived from the
Greek word ὄργανον (organon) meaning tool. The term is used in both daily and
scientific English in multiple ways.
• Organization terms
• Organisation in sociology
• Organisation in management and
organisational studies
• Organization theories
• Organizational structures
• Pyramids or hierarchies
• Committees or juries
• Staff organization or crossfunctional team
• Matrix organization
• Ecologies
• "Chaordic" organizations
• See also
• Related lists
• References
Click on Image. Larger Image.
Source: Howell & Costley
Financial Statements: The System
Larger Image
Larger Image
Click on Images
Source: Investopedia.com
Financial Statements: Analysis
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
Financial Statements: Introduction
Financial Statements: Who's In Charge?
Financial Statements: The System
Financial Statements: Cash Flow
Financial Statements: Earnings
Financial Statements: Revenue
Financial Statements: Working Capital
Financial Statements: Long-Lived Assets
Financial Statements: Long-Term Liabilities
Financial Statements: Pension Plans
Financial Statements: Conclusion
Printer friendly version (PDF format)
Source: Investopedia.com
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Source: Investopedia Inc
Financial Ratios
A financial ratio is a ratio of two numbers of reported levels or flows of a company. It
may be two financial flows categories divided by each other (profit margin,
profit/revenue). It may be a level divided by a financial flow (price/earnings). It may be a
flow divided by a level (return on equity or earnings/equity). The numerator or
denominator may itself be a ratio (PEG ratio).
• Ratios
•
•
•
•
•
•
Flow-to-flow
Level-to-level
Ratio-to-ratio
To cash flow
To earnings
To market cap
• See also
• External links
Larger Image
Download Financial
Ratio Analysis (177K)
for Microsoft Excel.
Source: Baarns
Consulting Group
Competitive Position: Competitive Advantage
Literature Review
• Strategic Planning
• Competition
• What in the World is
Competitive Advantage?
• Competitive Postion:
Competitive Advantage
• What is Sustainable
Competitive Advantage
• Sustainable Competitive
Advantage
• Creating Business Value
Click on Image
Source: BRS
• Interest Alignment Rents and
Competitive Advantage
• Performance measures to
support competitive advantage
Click on Image
Source: businessballs.com
Competitive Position: Competitive Advantage
Literature Review
• Competitive strategy
• Michael Porter: Generic
Strategies
• Risk-related Challenges
Larger Image
Click on Image
Source: Vadim Kotelnikov, GIVIS, Ten3 East-West
Also see Annotated Lecture Outline
Strategic Capability: Core Competence
Literature Review
• Corporate Capabilities
• Core Competency
• Strategic Intent
• Innovation
• New Paradigm: Resource-Based Theory
• Theory of Constraints
• Value Chain
• IKEA Modified Value Chain
• Organisational Culture
• Organisational Structure
• Economic Value Added
• Six Sigma
Also see Annotated Lecture Outline
Larger Image
Click on Image
Source: Sumitomo Corporation
Global Strategies
Literature Review
• Going Global: Assess Market
Opportunities
• Institutions and Business
Strategies in Emerging
Economies: A Study of Entry Mode
Choice
• Globalization, Models of
Competitive Advantage and Skills
• The Competition of Countries
• Competitiveness of Nations: The
Fundamentals
• Economist Country Briefings
Click on Image
Source: Agrium Inc. 2004
Also see Annotated Lecture Outline
Strategic Decision Making
Literature Review
• Decision Theory
• Decision Making
• Game Theory
• The Future of Game Theory
Click on Image
Source: Yale Economic Review
Also see Annotated Lecture Outline
Strategic Planning
Strategic planning consists of the
process of developing strategies to
reach a defined objective. As we label a
piece of planning "strategic" we expect
it to operate on the grand scale and to
take in "the big picture" (in
contradistinction to "tactical" planning,
which by definition has to focus more
on the tactics of individual detailed
activities).
Click on Image
Source: Long Range Planning - International
Journal of Strategic Management
"Long range" planning typically projects
current activities and programs into a
revised view of the external world,
thereby describing results that will most
likely occur (whether the planner wants
them or not!)
Also See Introduction to Strategic Management
Strategic Planning
"Strategic" planning tries to "create"
more desirable future results by
(a) influencing the outside world or
(b) adapting current programs and
actions so as to have more
favorable outcomes in the external
environment.
Click on Image
Source:
learningworks@telus.net
Strategic Planning
• Methodologies
• Situation Analysis
• Identifying cultures
• Perspectives
• Ethnographical versus Clinical
approach
• Functionalistic versus Interpretionistic
approach
• Artifacts
• Visible artifacts
• Invisible artifacts
• Culture types
• Changing cultures and strategy
• Approaches
• Resistance
• Measurements
• Goals, objectives and targets
• Mission statements and vision statements
• Why strategic plans fail
• External links
Click on Image. Larger Image
Source: University of Cambridge,
Department of Engineering
Competitive Position: Competitive Advantage
Competition is the act of striving against another force for the purpose of
achieving dominance or attaining a reward or goal, or out of a biological imperative
such as survival. Competition is a term widely used in several fields, including
economics, business, politics, and sports. Competition may be between two or
more forces, life forms, agents, systems, individuals, or groups, depending on the
context in which the term is used.
• Sizes and levels of competition
• Consequences of competition
• Competition in different fields
• Economics and business
competition
• Competition in biology and
ecology
• Competition in politics
• Sports competition
• Competition in education
• The Study of competition
• Competitiveness
• Econometrics
• See also
Click on Image
Source:Brecker Associates
Sustainable Competitive Advantage
• Owning Competitive Advantage
• Competition
• Hypercompetition
Larger Image
Click on Image
Source: Vadim Kotelnikov, GIVIS, Ten3 East-West
Sustainable Competitive Advantage
In marketing and strategic
management, sustainable competitive
advantage is an advantage that one
firm has relative to competing firms. The
source of the advantage can be
something the company does that is
distinctive and difficult to replicate, also
know as a core competency, for
example P&G' ability to derive superior
consumer insights and implement them
in managing its brand portfolio.
Larger Image
Click on Image
Source: Infosys Consulting
Creating Business Value
Information technology facilitates new and more
efficient way of creating business value in the
new economy. As a result, instead of the
traditional vertically integrated value chains,
organizations must adopt business models
based on independent layers of value-creating
activities.
• Meltdown of the Value Chain
Impact of rising strength of emerging economies
on market expansion Role of emerging market
conditions on first mover advantages Sources of
first mover advantages in emerging markets
Strategies to sustain these advantages
• Complementing for Complexity: Leading
Through Managing The first mover in an
emerging market
Source: General Management Review
Competitive Strategy: Michael Porter
• Michael Porter: Generic Strategies
Larger Image
Click on Image
Source: www.tutor2u.net
Image by benchmarkporter.com
Strategic Capability: Core Competence
• Internal capabilities
• Corporate capabilities
• Resource-based view
• Capabilities in the new economy
• Synergy
• Patents
• Effective leadership
• Teamwork
• Continuous learning
• Tacit knowledge
Larger Image
Click on Image
Source: Vadim Kotelnikov, GIVIS,
Ten3 East-West
Core Competency
• Core Competency
• The Work of Hamel and Prahalad
• Sustainable competitive advantage
• Synergy
• The Competence Problem
• Principles and Functions of
Management - Henri Fayol
• Qualities of a Successful Manager
• The Motivation and Performance
Obsession
• Leadership and Management
• Managerial Competency
Questionnaire
Larger Image
Click on Image
Source: Forio Corporation
Strategic Intent
• Corporate Vision, Mission, Goals and
Strategies
• Your Enterprise Strategy
• Dynamic Business Strategy
• Strategy Innovation
• Marketing and Selling
• Strategic Thinking
• New-to-the-World Product
Development
• Managing Your Value Chain
• Strategy Implementation
Larger Image
Click on Image
Source: Vadim Kotelnikov, GIVIS, Ten3 East-West
Innovation
• Efficiency Improvement
• New ways of doing business
• New rapidly globalizing economy
• Technological innovation
• Technology Transfer
• Fast Company
• Reaching and servicing customers
• The Entrepreneur
• Innovation project management
• Roadmaps
• Guiding principles
• Business processes
Click on Image
Source: Vadim Kotelnikov, GIVIS,
Ten3 East-West
New Paradigm: Resource-Based Theory
• Strategic Marketing and the Resource
Based View of the Firm
• Business Strategy
• Setting Objectives & Planning
• Customer Satisfaction
• Performance Management
• Performance Measurement
System
• Balanced Scorecard (BSC)
• Service-Profit Chain
• Sustainable Growth Strategies
• Porter's Five Forces Model for
Industry Analysis
• Economic Value Added (EVA)
• Business Architect
Larger Image Click on Images
Source: Vadim Kotelnikov, GIVIS, Ten3
East-West
Theory of Constraints
Theory of Constraints (TOC) is a body of knowledge on the effective
management of (mainly business) organizations, as systems. The author is
Eliyahu M. Goldratt, with many others contributing to the body of knowledge.
• The Thinking Process (TP)
• Throughput Accounting
• Application-specific TOC
solutions
• Operations
• Supply Chain / Logistics
• Finance and Accounting
• Project Management
• Marketing and Sales
• The Six Necessary and
Sufficient Questions relating to
Technology
• Development and practice
• Also See
• References
Larger Image
Click on Image
Source: Osaka Gakuin University
A Guide to Implementing the Theory of Constraints (TOC)
Value Chain
Click on Image
Source: Vickers
IKEA Modified Value Chain
Michael Porter argues that an
organization can enhance its
competitive positioning by performing
key internal activities in the value
chain at a lower cost and better than
its competitors (Bartol et al, 1993:
211).
The value chain approach identifies
two major activities- primary and
secondary. Primary actives include
production, marketing, logistics and
after-sale functions. Secondary
activities, on the other hand, are
identified as support processes to
primary activities.
IKEA Modified Value Chain
These include, firm infrastructure, Human Resource Management. Technology
development, and procurement. The ultimate purpose of the firm is to add as
much customer "value" in each of the primary activities (Pearce et. al, 1993: 184187).
Ikea has modified the value chain approach by integrating the customer in the
process and introducing a two-way value system between customers, suppliers,
and Ikea's headquarters.
In this global sourcing strategy, the customer is a supplier of time, labor,
information, knowledge and transportation. On the other hand, the suppliers are
customers, receiving technical assistance from Ikea's corporate technical
headquarters through various business services. The company wants customers
to understand that their role is not to consume value, but rather to create it
(Norrmann et al, 1993: 67).
IKEA Modified Value Chain
Ikea's role in the value chain is to mobilize suppliers and customer to help them
further add value to the system. Customers are clearly informed in the catalogs of
what the firm's business systems provides, and what they are expected to add to
the final process.
In order to furnish the customer with good quality products at a low cost, the firm
must be able to find suppliers that can deliver high quality items at low cost per
unit. The headquarters provides carefully selected suppliers with technical
assistance, leased equipment and the necessary skills needed to produce high
quality items.
This long-term supplier relationship does not only produce superior products, but
also add internal value to the suppliers (Normann et al, 1993: 72). In addition, this
value-chain modification differentiates Ikea from its competition.
Organisational Culture
Organizational culture comprises the attitudes, values, beliefs, norms and
customs of an organization. Whereas organizational structure is relatively easy to
draw and describe, organizational culture is considered to be less tangible and
more difficult to measure. It is also called Company Culture.
• Influences on organizational
culture
• Strong/Weak cultures
• Classifying organizational
culture
• Johnson’s Cultural Web
• Hofstede
• Deal and Kennedy
• Charles Handy
• Edgar Schein
• Elements of culture
• Critical Views on Organizational
Culture
• Figures in organizational culture
• See also
• Sources
Click on Image. Larger Image
Source: University of N. Carolina
Organisational Structure
Organizational structure is the way in which the interrelated groups of an
organization are constructed. The main concerns are effective communication
and coordination.
• Pre-bureaucratic
• Bureaucratic
• Functional Structure
• Divisional Structure
• Post-Bureaucratic
• Matrix organization
• Multi-Unit Organization
• Adhocracy
• See also
Click on Image. Larger Image
Source: © 2004-2006 Visitask
Economic Value Added
What Does Economic Value
Added Really Mean?
Click on Images for further
information
Source: David Harper, (Contributing
Editor - Investopedia Advisor)
Larger Image
Six Sigma
Six Sigma was pioneered by Bill Smith at Motorola
in 1986[1]. Originally, it was defined[2] as a metric
for measuring defects and improving quality; and a
methodology to reduce defect levels below 3.4
Defects Per (one) Million Opportunities (DPMO). Six
Sigma is a registered service mark and trademark
of Motorola, Inc[3]. Motorola has reported over
US$17 billion savings[4] from Six Sigma to date.
AlliedSignal and GE became early adopters of Six
Sigma and reported benefits of over US$300 million
during its first year of application[5]. Their CEO's,
Larry Bossidy and Jack Welch, played a vital role in
popularizing Six Sigma. Other major organizations
who claim to have benefited from Six Sigma
implementation are Ford, Caterpillar, Microsoft,
Raytheon, Quest Diagnostics, Seagate Technology,
Siemens, Merrill Lynch, Lear, 3M and many more.
Click on Image
Source: KETCH.ca
Six Sigma
• Definition
• Application & Success
•
•
•
•
•
Healthcare
Banking
Insurance
Construction
Military
• Methodology
• DMAIC
• DMADV
• Roles Required for Implementation
• Examples of Some Key Tools Used
• Criticisms of Six Sigma
•
•
•
•
•
Of its origin
Of the term: Six Sigma
Of statistics
Of methods
Of effects
• References
• See also
• External links
Click on Image
Source: QCI International. All rights reserved.
Global Strategies
Globalisation
Larger Map
Source: BizEd,
University of Bristol
Click on image for further information
Global Strategies
Globalization (or globalisation1) refers to the worldwide phenomenon of
technological, economic, political and cultural exchanges, brought about by
modern communication, transportation and legal infrastructure as well as the
political choice to consciously open cross-border links in international trade and
finance.
•
•
•
•
•
•
•
•
•
•
•
Meaning & Debate
History
Nature and existence of globalization
Characteristics
Anti-globalization
Pro-globalization (globalism)
Other uses
Measurement of Globalization
Notes
See also
External links
Illustration by Viktor
Koen for Newsweek
Comparative Advantage
In economics, the theory of comparative advantage explains why it can be
beneficial for two countries to trade, even though one of them may be able to
produce every kind of item more cheaply than the other. What matters is not the
absolute cost of production, but rather the ratio between how easily the two
countries can produce different kinds of things. The concept is highly important in
modern international trade theory.
• Origins of the theory
• Analysis of Ricardo's
theory
•
•
•
•
•
•
•
•
Examples
Example 1
Example 2
Example 3
More complexities
References
See also
External links
Click on Image
Source: Pakissan.com
International Trade
International trade is the exchange of goods and services across international
boundaries or territories. In most countries, it represents a significant share of
GDP. While international trade has been present throughout much of history (see
Silk Road, Amber Road), its economic, social, and political importance has been
on the rise in recent centuries. Industrialization, advanced transportation,
globalization, multinational corporations, and outsourcing are all having a major
impact. Increasing international trade is the usually primary meaning of
"globalization".
• International trade theory
•
•
•
•
Ricardian model
Heckscher-Ohlin model
Specific Factors
Gravity model
• Regulation of international trade
• Risks in international trade
• Economic risks
• Political risks
• See also
• External links
• Data
Click on Image
Source: Copyright © 2006 Time Inc.
Multinational Corporations
A multinational corporation (MNC) or multinational enterprise (MNE) or
transnational corporation (TNC) is a corporation/enterprise that manages
production establishments or delivers services in at least two countries.
•
•
•
•
Critiques
Examples
In fiction
See also
• Fostering Growth and
Promoting a Responsible
Market Economy - A G8
Declaration
Annual Report on
the Guidelines for
Multinational
Enterprises The
2005 edition
includes a special
focus on corporate
responsibility in the
developing world
Multinational Corporations
Multinational corporations (MNC) are often divided into three broad groups:
• Horizontally integrated multinational
corporations manage production
establishments located in different countries
to produce same or similar products.
• Vertically integrated multinational
corporations manage production
establishment in certain country/countries to
produce products that serve as input to its
production establishments in other
country/countries.
• Diversified multinational corporations
manage production establishments located in
different countries that are neither horizontally
or vertically integrated.
Multinational Corporations
Multinationals have played an
important role in globalization. Given
their international reach and mobility,
prospective countries, and sometimes
regions within countries, must compete
with each other to have MNCs locate
their facilities (and subsequent tax
revenue, employment, and economic
activity) within. To compete, countries
and regional political districts offer
incentives to MNCs such as tax
breaks, pledges of governmental
assistance or improved infrastructure,
or lax environmental and labour
standards. This process of becoming
more attractive to foreign investment
can be characterized as a race to the
bottom.
Click on Image
Source:
Decision Theory
Decision theory is an interdisciplinary area of study, related to and of interest to
practitioners in mathematics, statistics, economics, philosophy, management, and
psychology. It is concerned with how real decision-makers make decisions, and
with how optimal decisions can be reached.
• Normative and descriptive decision
theory
• What kinds of decisions need a
theory?
• Choice between incommensurable
commodities
• Choice under uncertainty
• Pascal's Wager of choice under
uncertainty
• Alternatives to probability theory
• Intertemporal choice
• Social decisions
•
•
•
•
Complex decisions
Paradox of choice
See also
References
Larger Image
Click on Image
Source: Times Books
Decision Making
Decision making is the cognitive process of selecting a course of action from
among multiple alternatives. Every decision-making process produces a final
choice. It can be an action or an opinion. It begins when we need to do something
but we do not know what. Therefore decision-making is a reasoning process which
can be rational or irrational, and can be based on explicit assumptions or tacit
assumptions.
Click on Image
Source: Cognitive
Technologies.
Decision Making
• Decision making style
• Cognitive and personal biases in
decision making
• Cognitive neuroscience of decision
making
• Decision making in groups
• Principles
•
•
•
•
•
•
•
•
Decision making in one's personal life
Decision making in healthcare
Path dependency
Decision making in business and
management
See also
References
External links
Some important research journals
Larger Image
Click on Image
Source: DM Review
Game Theory
Game theory is a branch of applied
mathematics that studies strategic situations
where players choose different actions in an
attempt to maximize their returns. First
developed as a tool for understanding
economic behavior, game theory is now
used in many diverse academic fields,
ranging from biology, psychology to
philosophy. Beginning in the 1970s, game
theory has been applied to animal behavior,
including species' development by natural
selection. Because of interesting games like
the prisoner's dilemma, in which rational selfinterest hurts everyone, game theory has
been used in political science, ethics and
philosophy. Finally, game theory has recently
drawn attention from computer scientists
because of its use in artificial intelligence
and cybernetics.
Larger Image
Click on Image
Source: David D Friedman
Game Theory
• Representation of games
• Normal form
• Extensive form
• Types of games
•
•
•
•
Symmetric and asymmetric
Zero sum and non-zero sum
Simultaneous and sequential
Perfect information and imperfect
information
• Infinitely long games
• Uses of game theory
• Economics and business
• Descriptive
• Normative
• Biology
• Computer science and logic
• Political science
• Philosophy
• History of game theory
• Notes
• References
Larger Image
Click on Image
Source: Elmer G. Wiens: Egwald Web Services Ltd
Also see Game Theory, Strategic Behavior, and Oligopoly
Competitive Position - Competitive Advantage
1/4
Lecture
Opening Remarks
It is useful to start the session by recapping on
the previous lecture and emphasizing the notion
of ‘strategy as imperfection’ or the quest for
‘unfair’ advantage. This lecture explores the idea
of competitive advantage in more detail and puts
some flesh on the bare bones of generic
strategies introduced in the preceding session.
The lecture focuses on the idea that strategy is
about the position of an organisation with respect
to its markets and competitors (the so called
market-based or positioning school) and looks at
the relationships between market structure,
pricing and strategy.
The Market Positioning School
A recap on the ‘generic strategies’ framework
introduced briefly in the last chapter and
restatement of the stuck in the middle hypothesis.
Larger Image
Click on Image
Source: Wikipedia
Competitive Position - Competitive Advantage
2/4
The Nature and Source of Cost Advantage
A more detailed look at the nature and sources of cost advantage focussing on the links
between economies of scale, scope and learning and the achievement of cost advantage.
The Nature and Source of Differentiation Advantage
A more detailed look at the nature and source of differentiation advantage and the risks
associated with this strategy emphasising the difference between differentiation and cost
based strategies. Identifying the potential for differentiation.
The Concept of Competitive Advantage
A definition of competitive advantage and a description of its constituent elements. An
explanation of firm-specific imperfections as the source of competitive advantage and the
interrelationship between industry structure and competitive advantage.. This latter point may
be omitted from undergraduate lectures and developed in a tutorial context.
Figure 6.7. An explanation of the concept of sustainability and its determinants (on
undergraduate programmes this may be included a little later in the course)
Competitive Position - Competitive Advantage
3/4
Three Major Routes to Competitive Advantage: Is it possible for a firm to pursue
more than one generic strategy?
A re-statement of the ‘stuck in the middle’ hypothesis and a summary of the reasons for
arguing that, in order to be successful, a firm should commit to a single strategy. The
critique of this position and the implications of composite strategies. The relationship
between generic strategies and market structure (this may be omitted on undergraduate
programmes).
On undergraduate programmes the following sections may form the basis of a second
lecture
Market Segmentation Analysis
The rationale for market segmentation analysis. The concept of offer curves and
price/quality trade-offs (this element may be omitted on undergraduate programmes). The
identification of segmentation variables.
Value Creation and Value Analysis
The concept of value and consumer surplus. The link between value, competitive strategy
and competitive advantage. Value maps could be included if time permits but can be
omitted without losing the main thrust of the argument.
Competitive Position - Competitive Advantage
4/4
Strategic Group Analysis
An explanation of the concept of strategic
groups and rationale for this kind of analysis.
Mapping strategic groups over time and
strategic groups in practice.
Industry Transformation
Using the 5 forces framework to gain insight
into industry transformation. On
undergraduate programmes this may be
omitted from the main lecture and developed
in tutorial sessions.
Business Models
This is an optional part of this session and
may be considered in a later slot.
An explanation of the terminology. The key
elements of a business model. Business
models in practice. Achieving a sustainable
and defensible strategic position.
Larger Image
Click on Image
Source: Vadim Kotelnikov, GIVIS,
Ten3 East-West
Strategic Capability: Core Competence 1/3
Lecture – a recap of prior concepts and the logic of the market-based view of the firm. A
discussion of the way this lecture fits with the overall framework of the strategy course.
SLIDE: Figure 1.6 A systemic model of strategy
The Resource-based View of the Firm- an explanation of the main tenets of the resourcebased view and the ways in which it differs from the market-based view.
SLIDE: The market-based versus the resource-based view of the firm.
The Language of Resources and Capabilities – a discussion of key terminology, for
example ‘capabilities’, ‘competences’, ‘strategic assets’ highlighting the fact that different
authors use different terms to refer to similar concepts.
SLIDE: Some key definitions
SLIDE: Core Competences = Distinctive Capabilities = Strategic Assets
The Importance of Intangibles – an explanation of what is meant by intangibles and why
they are considered to be of particular importance
SLIDE: Identifying Intangibles p. 263
Strategic Capability: Core Competence 2/3
Determining the Value of Competences – an explanation of the concepts of imitability,
durability, substitutability and appropriability.
SLIDE: Figure 7.5
Linking the Market-based and Resource-based Views – discussion of the ways in which
these two perspectives complement each other which draws on the notion of key success
factors. For undergraduates this could be the concluding slide.
SLIDE 7.10
SLIDE: Figure7.6
Strategic Capability: Core Competence 3/3
Competence-based Competition – an
introduction to the notions of strategic intent and
strategic innovation, emphasizing the role of
learning.
SLIDE: Figure 7.7
Competitive strategy in practice – some
prescriptive advice about managing the business
for value and positioning the business for growth.
More suited to postgraduate students with
management experience.
SLIDE: Figure 7.2
SLIDE: Figure 7.15
Concluding comments – a brief summary of the
key ideas highlighting of the fact that every firm is
different and that managerial processes,
information and communication together with
intangible assets and core competences are
central to developing and sustaining competitive
advantage.
Click on Image
Source: SUNY Cobleskill
Global Strategies 1/6
Lecture
The 'global strategies and international
advantage' topic covers a lot of ground and
on undergraduate programmes it might be
worthwhile covering the topic over two
lectures.
The first lecture could focus on the concept
globalization and the pursuit of international
competitive advantage at the nation and
industry level. The second could focus on firm
level choices and the strategic options
available to international firms
Introduction – opening remarks should
establish the link with previous lectures on
competitive and corporate strategy and
explain this lecture’s focus on the global
arena.
Click on Image. Larger Image
Source: Carnegie Endowment for
International Peace
Global Strategies 2/6
The Terminology of International Business
– an explanation of key terms and the
introduction of the notions of
internationalization and globalization.
Slide: The terminology of international
business (list of key definitions drawn from
p.412 and 413)
The Context of International Strategy – a
brief review of the major trends in trade and
foreign direct investment. A discussion of the
factors driving globalization
Slide: Table 11.1 and 11.2
Click on Image
Source: © 2000-2006 by The Globalist
Global Strategies 3/6
National Competitive Advantage – an
introduction to, and explanation of, the
determinants of national competitive advantage
(Porter’s diamond model). Lectures to
postgraduate audiences could also include a
discussion of the limitations of the model
(discussed on p.434-436 of the text) and
introduce the double diamond model.
Slide: Figure 11.1
The Internationalization process – an
explanation of the ways in which domestic firms
develop their overseas activities and the
evolution of different forms engagement in
foreign markets over time. A summary of the
advantages and disadvantages of these
different forms of international activity, e.g.
licensing, foreign direct investment, etc.
Slide: Figure 11.2
Click on Image
Source: Irish Agriculture and Food
Development Authority
Global Strategies 4/6
From international to global strategies – a reiteration of the opening themes of
internationalization, moving to a discussion of the strategic options available to multinational firms, introducing the notion of multi-domestic and global strategies.
Slide: Figure 11.3
Slide: Bullet points contrasting multi-domestic and global strategies
The Drivers of Globalization – a discussion of the forces that are driving the industries
and firms to go global and the limitations of, and tensions in, this process
Slide: Table 11.4
Global v Local – an outline of the trade-offs between standardisation and differentiation
and the link between the strategic environment and available strategic options.
Slide: Table 11.5
Strategic Choices – an explanation of Bartlett and Ghosal's four basic strategies used to
enter and compete in international environments
Slide: Figure 11.5
The Best of Both Worlds – Transnational Strategies – an outline of what is understood by
a transnational strategy and an explanation of implementing this strategy in practice.
Global Strategies 5/6
Strategy and Organization – a return to one
of the key themes running through the strategy
literature, namely the strategy/structure
debate. A discussion of the fit between
strategy and structure in international firms,
paying particular attention to Bartlett and
Ghoshal's (1989) model. If time permits the
lecturer may also like to re-introduce the
notions of country-specific and firm-specific
advantages and Rugman & D'Cruz's (2000)
'flagship'model
Slide: Figure 11.7
Slide: Figure 11.11 (optional)
Managing International Organizations – an
explanation of the complexity inherent in
organising a multi-product, multi-market firm
and a discussion of the ways in which
managers may seek to organise and control
such businesses.
Slide: Bullet points for and against a matrix
structure
Slide: Figure 11.13
Click on Image. Larger Image
Source: © Department of Industrial Engineering
and Management 2006, Helsinki University of
Teachnology
Global Strategies 6/6
Concluding Comments – a summary of some of the main themes including the nature of
globalization and the significance of national competitive advantage, the global/local debate
and the way this connects with firm-specific versus country-specific advantages, the
tantalizing possibility of gaining the 'best of both worlds' through transnationality and the
possibilities and problems of developing appropriate organizational structures and systems to
make the transnational organization a reality
Click on Image. Larger Map
Source: BizEd
Strategic Decision Making 1/4
Lecture - a discussion of the change in
emphasis from micro and macroeconomic
analyses of strategy to more process-based
approaches. A re-iteration of the earlier theme
of 'what happens when strategy meets
organization?'
Slide: Figure 2.2
Different perspectives on strategic
decision-making - an explanation of
Mintzberg, Quinn and Ghoshal's (1998) 5 'Ps'
of strategy and a discussion of the ways in
which the dominant view of strategic decisionmaking has changed over time.
Slide: Bullet points outlining the 5 Ps of
strategy
Making Choices - an explanation of rules of
thumb and option selection techniques
emphasizing the fact that the way strategy is
viewed determines, at least in part, the
techniques used to aid decision-making.
Slide: Table 13.1
Click on Image. Larger Image
Source: David M. Boje
Strategic Decision Making 2/4
Game Theory - an explanation of the basic
terminology and approach of game theory and
the introduction of a simple game such as the
Prisoners' Dilemma. Undergraduate lectures
may choose to omit the slide and merely
introduce the general concept of game theory.
Slide: Table 13,2
Sensitivity Analysis - a brief explanation of the
technique
Slide - Definition of sensitivity analysis from
13.2.2
Options - an explanation of the key dimensions
of strategic options namely the identification of
additional or alternative capabilities and the
identification of potential future markets and/or
new customer behaviours.
Slide: Figure 13.1
Click on Image
Source: Drexel University
Strategic Decision Making 3/4
Decision-making Processes: Thinking and
Acting - a reiteration of the point that
decision-making is not a simple process that
happens in a linear sequence - a period of
thinking and followed by a period of acting.
Decision-making and the development of
alternative courses of action are fashioned in
their doing. An explanation of different
perspectives on decision-making processes
e.g. planned v chaotic
Slide: Figure 13.2 and the architecture of
strategic decision-making
The architecture of strategic decision
making - the importance of decision-specific
characteristics and organizational context to
decision-making processes. (Please note:
undergraduate tutors may decide to omit this
topic from the lecture and to explore these
issues raised in separate lectures.)
Slide: Bullet points taken from top of page 514
Slide: bullet points taken from middle of page
515
Click on Image
Source: guuui.com
Strategic Decision Making 4/4
Strategic Decision-making and
Performance - a discussion of the
relationship between decision processes and
their outcomes, highlighting the importance of
the knowledge base of managers and the
receptivity of the organizational context
Slide: factors of success - bullet points of subheadings in 13.5.2
Closing remarks - A re-statement of the key
themes of the lecture placing emphasis on
not only the choices made but also on how
managers make decisions and the
relationship between decision-making
processes and performance outcomes.
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Source:© 2000 -2006 Hofstra University