2. L’école la plus proche pour aller loin
Let me introduce myself
• 15 years of in both operational and strategic
marketing positions
– with global, regional (Europe) and local responsibilities
– and within different customer segments (B2B and B2C)
– Industries: telecommunication / handset manufacturer, Industry,
Health and Energy
• Marketing and Strategy consultant
• French-german business facilitator for SMEs
• Convinced european citizen
3. L’école la plus proche pour aller loin
Objectives of this workshop
Acquire competencies in strategy management:
• Be capable of following a strategic approach and
of realizing a strategic analysis
• Be able to make recommandations of what
strategy to implement and how
• Know how to take strategic decisions
Improve your personal skills:
• Language: practice, practice, practice
• Analytics
• Team work
• Time management
4. L’école la plus proche pour aller loin
Agenda
Day 1 Day 2 Day 3
Introduction to Strategic
management & Strategy
concepts
Chapter 1:
ü Key definitions
ü Vision & Mission
ü Strategic planning
process
ü Benefits
Strategic tools
Chapter 2:
ü Strategic segmentation
ü Strategy tools: Internal &
external analysis
Recap of Day 1
Strategic tools
Chapter 2:
ü Strategy tools: Internal &
external analysis
Case study: team work
Chapter 3:
Business strategy
ü Porters Generic
strategies
ü Strategic clock
ü Blue Ocean
Case study: team work
Recap of Day 2
Chapter 3:
Corporate strategy
ü Differentiation
ü Specialization
ü Integration
ü Internationalization
Case study: team work
Chapter 4:
Portfolio Management
ü Growth strategies
ü Strategy evaluation
5. L’école la plus proche pour aller loin
Rules of the game
• Punctuality
• Respect!
• Responsibility!
• Concentration!
• No during class!
• Dialogue! Interact! Ask questions!
• Speak english!
• We are at work!
6. L’école la plus proche pour aller loin
Internal & external anaylsis:
SWOT
STRENGTHS
OPPORTUNITIES
THREATS
S
W
O
T
SWOT
7. L’école la plus proche pour aller loin
Individual exercice:
Diagnostics Warm-up - SWOT
Switch the button – it is time to
speak english!
Do your own personal SWOT.
Preparation time: 10 min.
Present yourself in 2 min. to the
plenum
8. L’école la plus proche pour aller loin
Glossary
Long-Term Objectives:
Specific results that an organization seeks to achieve
- Challenging, measurable, consistent, reasonable, and clear
- To be established for the overall company and for each division
Strategies:
Means by which long-term objectives will be achieved (>5 years).
- Include geographic expansion, diversification, acquisition, product
development,market penetration, divestiture, liquidation, joint ventures
Annual Objectives:
Short-term milestones that organizations must achieve to reach longterm
objectives.
9. L’école la plus proche pour aller loin
Glossary
Vision statement:
Answers the question “What do we want to become?”
- Often only one sentence
- Considered as 1st step of stragey planning
Mission statement:
Addresses the basic question: “What is our business?”
- A clear mission statement describes the values and priorities of an
organization.
- A mission statement broadly charts the future direction of an
organization.
10. L’école la plus proche pour aller loin
Glossary
External opportunities and external threats:
Refer to economic, social, cultural, demographic, environmental, political,
legal, governmental, technological, and competitive trends and events that
could significantly benefit or harm an organization in the future
- Are largely beyond the control of a single organization
Internal strengths and internal weaknesses:
An organization’s controllable activities that are performed especially well
or poorly.
- Takes into consideration management, marketing, finance/accounting,
production/operations, research and development, management
information systems activities
- Are determined relative to competitors.
Competitive advantage:
Anything that a company does especially well compared to rival
companies
11. L’école la plus proche pour aller loin
What is actually strategic
planning?
Strategic planning is the
path we take from
why we exist (mission)
to what do we want to
become (vision).
12. L’école la plus proche pour aller loin
Why is it important to have a clear
vision and mission statement?
Ø Achieve clarity of purpose among all managers and
employees
Ø Provide a basis for all other strategic planning activities
Ø Provide direction
Ø Provide a focal point for all stakeholders of the
company
Ø Project a sense of worth and intent to all stakeholders
Ø Achieve higher organizational performance and
motivation
Ø Achieve synergy among all managers and employees
13. L’école la plus proche pour aller loin
Individual exercise:
Mission statements
Evaluate the different mission statements!
Argument.
Preparation time: 20 min.
Plenum discussion of results: 15 min.
14. L’école la plus proche pour aller loin
Strategy development process:
Formulate – Implement - Evaluate
Statusofpurpose:
VISION&MISSION
RESSOURCE
ALLOCATION
Creationof
TACTICS&
ANNUALGOALS
STRATEGYDEVELOPMENT,
Evaluation&Selection
External
Analysis
Formulation
of
LONGTERM
GOALS
Internal
analysis
PERFORMANCE METRICS & EVALUATION
15. L’école la plus proche pour aller loin
What is the difference between
strategy and tactics?
16. L’école la plus proche pour aller loin
Distinction of strategic versus
tactical decisions
Strategical decisions Operational decisions /
Tactics
Direction Implementation
Strategy statement Annual plan
Broad Specific, detailed
Unstructured Structured
Problem solving Problem solving
Creativity Analytical
External focus Internal focus
Irregular Regular
Long-term Short-term
Difficult to evaluate Easy to evaluate
17. L’école la plus proche pour aller loin
Is strategic management
…only an intellectual exercice for the
company’s top management?
…applicable only for large
multinationals?
18. L’école la plus proche pour aller loin
Benefits of strategic
management
q Financial benefits:
Significant improvement in sales, profitability, and productivity compared to
companies without systematic planning activities.
q Non-financial benefits:
Enhanced awareness of external threats, an improved understanding of
competitors’ strategies, increased employee productivity, reduced
resistance to change, and a clearer understanding of performance–reward
relationships
q Communication:
Through dialogue and participation, managers and employees become
committed to supporting the organization
q Understanding of and commitment from all managers and employees.
q Empowerment:
Encourage employees to participate in decision making, to exercise
initiative and imagination, and reward them for doing so.
19. L’école la plus proche pour aller loin
Strategy safari
Strategies are to be meant long-term but a company
needs to stay flexible and responsive to its market
Realized
strategy
Non-‐realized
/
abandoned
strategies
20. L’école la plus proche pour aller loin
Possible blocking points for
strategic planning
• Costs: strategic planning needs time & ressources
• Instable environment: unpredictable changes
• Organization: the introduction of a proper strategic
process formalizes the different steps, thus might
reduce flexibility in some companies
• Company culture: strategic planning should always
take into consideration the companys culture
• Implementation: transform strategies into concrete
actions is key
21. L’école la plus proche pour aller loin
Logbook entry : Chapter 1
• Any questions?
• Logbook entry: Take 5 min. to resume what
you have learned during this first chapter?
– What was new for you?
– What was particularly interesting for your?
– When you think of your work, what will be useful
in the future?
You may mindmap if you like.
22. L’école la plus proche pour aller loin
Agenda
Day 1 Day 2 Day 3
Introduction to Strategic
management & Strategy
concepts
Chapter 1:
ü Key definitions
ü Vision & Mission
ü Strategic planning
process
ü Benefits
Strategic tools
Chapter 2:
ü Strategic segmentation
ü Strategy tools: Internal &
external analysis
Recap of Day 1
Strategic tools
Chapter 2:
ü Strategy tools: Internal &
external analysis
Case study: team work
Chapter 3:
Business strategy
ü Porters Generic
strategies
ü Strategic clock
ü Blue Ocean
Recap of Day 2
Chapter 3:
Corporate strategy
ü Differenciation
ü Specialization
ü Integration
ü Internationalization
Chapter 4:
Portfolio Management
ü Growth strategies
ü Strategy evaluation
23. L’école la plus proche pour aller loin
Strategy development process:
Formulate
Statusofpurpose:
VISION&MISSION
RESSOURCE
ALLOCATION
Creationof
TACTICS&
ANNUALGOALS
STRATEGYDEVELOPMENT,
Evaluation&Selection
External
Analysis
Formulation
of
LONGTERM
GOALS
Internal
analysis
PERFORMANCE METRICS & EVALUATION
24. L’école la plus proche pour aller loin
Strategic analysis:
segmentation’s first
Ø Segmentation has to be done per Business Unit
Ø Define the degree of segmentation needed
Ø Distinguish Marketing segmentation from
strategic segmentation
Strategic segmentation Marketing segmentation
• Includes ALL activities of a company
• Separates activities according to
technologies, markets and competitors
• Reveals opportunities and threats for current
and new businesses
• Provokes mid- to long-term changes
• Is relevant to a specific Business Unit
• Segments the customers according to their
needs, habits and consumer behaviour
• Defines the marketing-mix and enables the
adapation of products according to customer
needs
• Implies short-term changes
25. L’école la plus proche pour aller loin
Strategic segmentation
3-dimensional « TAC » analysis to define a segment
Technologies /
Competencies
(HOW?)
Applications /
Benefits
(WHAT FOR?)
Customer
segments
(to WHOM?)
Characteristics of Strategic
segmentation:
² Takes into account the whole
sum of a company’s activities
² Divides the company’s
activities according to their
technologies, markets and
competitors
² Reveals opportunities to create
or acquire new businesses but
also those that need to be
further developed or
abandoned
² Mid- to long-term
26. L’école la plus proche pour aller loin
The difference between
Corporate & Business strategy
27. L’école la plus proche pour aller loin
Which strategic tools do you
know already?
28. L’école la plus proche pour aller loin
Strategic diagnostics tools
² SWOT: external & internal analysis
² PESTEL – global environment (external)
² Porters 5 forces: demand, offer, competition
(external)
² BCG2 matrix: differenciation sources
(external)
² Strategic group analysis: competing
companies (external)
² Porters Value chain diagram (internal)
² Barneys VRIO
29. L’école la plus proche pour aller loin
Overview SWOT & PESTEL
tools
h(ps://www.youtube.com/watch?v=_YhEpBvlO2M
30. L’école la plus proche pour aller loin
Internal & external anaylsis:
SWOT
STRENGTHS
OPPORTUNITIES
THREATS
S
W
O
T
SWOT
31. L’école la plus proche pour aller loin
Analysis of a company’s global
environment: PESTEL
P
Politics
E
Economy
S
Social
T
Tech-
nology
E
Environ-
ment
L
Legal
u What is the political situation of the country and how can it affect the industry?
u What are the prevalent economic factors?
u How much importance does culture has in the market and what are its determinants?
u What technological innovations are likely to pop up and affect the market structure?
u Are there any current legislations that regulate the industry or can there be any change in
the legislations for the industry?
u What are the environmental concerns for the industry?
32. L’école la plus proche pour aller loin
Strategic diagnostics tools
² SWOT: external & internal analysis
² PESTEL – global environment (external)
² Porters 5 forces: demand, offer, competition
(external)
² BCG2 matrix: differenciation sources
(external)
² Strategic group analysis: competing
companies (external)
² Porters Value chain diagram (internal)
² Barneys VRIO (internal)
33. L’école la plus proche pour aller loin
Analysis of demand, offer and
competitors: Porters 5 forces
As a result of the
Porters 5 forces analysis,
a company will able to
define its Key Success
factors, for instance:
• Costs
• Image
• Technology
• Profitability
• …
You may than rank your
position in these KSFs (++,
+, 0, -,--)
Threat of
substitution
Bargaining power of
consumers
Bargaining power of
suppliers
Potential entry of
new competitors
Rivalry among
competing
companies
Worksheet and example available under www.Mindtools.com
34. L’école la plus proche pour aller loin
Boston Consulting group
Advantage Matrix
Fragmented
VolumeStalemate
Specialization
Potential size of competitive
advantage
Availablenumberof
approachesforcompetitive
advantage
Small Large
FewMany
Key question:
Where is a
company’s
differentiation
advantage?
35. L’école la plus proche pour aller loin
Segmentation of competing
companies within a segment:
Strategic groups analysis
1. Determine the two distinctive criteria
that will classify the companies of the
chosen industry. These criteria will be
placed on the axis of the graph.
Typical criteria are for instance:
Vertical and horizontal integration, Geographical
market segmentation, Ownership structure,
Company size, Capacity utilization, Cost structure,
Sales channels, Marketing activities, Brand
ownership, Product diversity, Product quality,
R & D capability
2. Position the companies of the sector
on the map
3. Divide these companies into strategic
groups. Additionally the size of the
bubble can visiualize the size of the
market share of a strategic group.
SG1
SG2
SG
3
Price
LowHigh
Eco-Friendliness
Low High
36. L’école la plus proche pour aller loin
Identify areas of improvement in
terms of efficiency or profitability
(Porters value chain diagram)
Company infrastructure
Human resource management
Technological development
Procurement
Inbound
logistics
Operations
Outbound
logistics
Marketing
& Sales
Service
Margin
“Primary activities”
“Supportactivities”
37. L’école la plus proche pour aller loin
Analyze internal ressources
with VRIO
Is the ressource / capability…
Valuable?
Rare?
Competitive
disadvantage
Yes
Competitive
parity
No
Costly to
Imitate?
Temporary
competitive
advantage
No
No
Yes
And Is the company…
Organized
to capture
value?
Yes
Temporary
competitive
advantage
No
Sustained
competitive
advantage
38. L’école la plus proche pour aller loin
Working groups
Group 1 Group 2 Group 3 Group 4 Group 5 Group 6
Quentin
Serkan
Ludovic
Marion
Anny
Loic
Cédric
Michael
Wafa
Mandy
Audrey
Oriane
Saimon
Hanène
Clémence
Florian
Nina
Kaoutar
Leslie
Sarah
Victor
Emilie
Salim
Anna
Laura
Sevilay
Shaima
39. L’école la plus proche pour aller loin
Group exercise
Group
1 Group
2 Group
3 Group
4 Group
5 Group
6
PESTEL Porters
5
forces
BCG
Advantage
Matrix
Strategic
Groups
Value
chain
diagram
VRIO
Read the Lego case study.
Analyse the companys situation in the year 2003 by using the strategic tool of your group.
Prepare a 15-minute-presentation to present your results whilst explaining how to use
the strategic tool.
You may use the seminars support in french and / or the internet in order to better understand
the strategic tool of your group.
Your presentation should first present the objectives of the strategic tool, the key
questions to answer and the methodology to follow.
In a second step your presentation should summarize the situation of Lego at the
arrival of the new CEO – analysis that you did by applying the strategic tool.
Preparation time: 120 min.
Presentation & plenum discussion of analysis: 6x15 min.
40. L’école la plus proche pour aller loin
Strategic diagnostics tools
² SWOT: external & internal analysis
² PESTEL – global environment (external)
² Porters 5 forces: demand, offer, competition
(external)
² BCG2 matrix: differenciation sources
(external)
² Strategic group analysis: competing
companies (external)
² Porters Value chain diagram (internal)
² Barneys VRIO (internal)
41. L’école la plus proche pour aller loin
Logbook entry : Chapter 2
Strategic analysis tools
• Any questions?
• Logbook entry: Take 5 min. to resume what
you have learned during this first chapter?
– What was new for you?
– What was particularly interesting for your?
– When you think of your work, what will be useful
in the future?
You may mindmap if you like.
42. L’école la plus proche pour aller loin
Agenda
Day 1 Day 2 Day 3
Introduction to Strategic
management & Strategy
concepts
Chapter 1:
ü Key definitions
ü Vision & Mission
ü Strategic planning
process
ü Benefits
Strategic tools
Chapter 2:
ü Strategic segmentation
ü Strategy tools: Internal &
external analysis
Recap of Day 1
Strategic tools
Chapter 2:
ü Strategy tools: Internal &
external analysis
Case study: team work
Chapter 3:
Business strategy
ü Porters Generic
strategies
ü Strategic clock
ü Blue Ocean
Recap of Day 2
Chapter 3:
Corporate strategy
ü Differentiation
ü Specialization
ü Integration
ü Internationalization
Chapter 4:
Portfolio Management
ü Growth strategies
ü Strategy evaluation
43. L’école la plus proche pour aller loin
Today’s weather report
• What do you remember from yesterdays
class?
• What are your expectations for today?
44. L’école la plus proche pour aller loin
Strategy development process:
Strategic choices
Statusofpurpose:
VISION&MISSION
RESSOURCE
ALLOCATION
Creationof
TACTICS&
ANNUALGOALS
STRATEGYDEVELOPMENT,
Evaluation&Selection
External
Analysis
Formulation
of
LONGTERM
GOALS
Internal
analysis
PERFORMANCE METRICS & EVALUATION
45. L’école la plus proche pour aller loin
The difference between
Corporate & Business strategy
46. L’école la plus proche pour aller loin
Business strategies
- define how should we compete
² Porters generic strategies
² Bowman’s strategic clock
² Red ocean versus Blue ocean strategy
47. L’école la plus proche pour aller loin
Porter’s generic strategies
to describe how a company pursues competitive
advantage across its chosen market
h(ps://www.youtube.com/watch?v=V14kuqYEsxE
48. L’école la plus proche pour aller loin
Evaluation and selection of
Generic strategies by Porter
Cost Leadership
Differentiation focusCost Focus
Differentiation
Sources of Competitive Advantage
Scope
NarrowBroad
Cost Differentiation
49. L’école la plus proche pour aller loin
Cost Leadership / Differentiation /
Focus strategy
Cost strategy Differenciation strategy
Ø Propose a product at a lower cost than
competition (not necessarily low cost
market)
Ø Price = competitive advantage
Ø Pre-requisite: consumer’s price elasticity
(price = main criteria for consumers
decision)
How to achieve cost reduction to offer
competitive pricing?
Ø Product with limited features
Ø Volume strategy
Ø Learning curve / economies of scale
Ø Unique product or service
Ø Distinction via product benefits, brand
image, add-on services, customisation,
design, distribution and logistics
Ø Increased value perception compared to
your competitors
Ø Higher prices thus higher profit
Focus strategy = niche strategy
Ø A piece of one big secteur
Ø Address a specific part of customers, ie. Private jets for wealthy customers or specific
activities for instance extreme trekking equipment
Ø Capture one specific profit zone because customers are willing to pay
Ø Protect from competition by creating a kind of monopole within the niche
Ø Advantage: limited investments
50. L’école la plus proche pour aller loin
A company’s position in
comparison to the offerings of its
competitors: Strategic clock by Bowman
Differen-
tiation
Focussed
differen-
tiation
Increased
price /
standard
product
Increased
price / low
value
Lower
value /
standard
price
Low price
& low
value
Low price
Hybrid
Value
Price
Competition’s
offering
Strategies
destined for failure
1
Eight competitive positions:
① Not a position of choice, only way
to survice: cost-effective selling of
volumes by attracting nex
customers
② Low cost leader with a balance
between low costs and volume
③ Moderate price / moderate volume:
offer products at a low price but
with a perceived higher value
④ Offer with high perceived-value,
strategy: either price increase thus
higher margins, prices low and go
for market share, branding is
important
⑤ Designer products: high perceived
value / high price
⑥ May work if higher price is
accepted, short-term
⑦ Monopoly pricing, very limited in
time
⑧ Loss of market share
2
3
4
5
6
78
51. L’école la plus proche pour aller loin
Strategic clock: key questions
When considering which competitive strategy to pursue for your
Business Unit, here are some questions you should ask yourself.
If you intend to compete on price:
• Are you a price leader?
• Can you sustain a cost leader position? Can you control your costs
and sustain a good margin?
• Are you able to exploit all of the cost advantages available to you?
• Can you balance low price against the perception of too low value?
• Is your cost advantage limited to one or a few small market
segments? Are these segments capable of sustaining your
business, given the volume and margins you project?
52. L’école la plus proche pour aller loin
Strategic clock: key questions
When considering which competitive strategy to pursue for your
Business Unit, here are some questions you should ask yourself.
If you intend to compete on perceived value:
• Do you have a well-identified target market?
• Do you understand what your target market truly values?
• Are you aware of the perceived value of your competitor's products?
• Are there areas of differentiation that you can capitalize on that
others cannot easily copy?
• Do you have alternate methods of differentiation in the event you
lose your competitive advantage in that area?
53. L’école la plus proche pour aller loin
Red ocean or Blue Ocean
strategy
Create and capture demand
Break the value-cost trade-off
Make the competition irrelevant
Create uncontested market space
Align the whole system of a company’s
activities in pursuit of differentiation & low-cost
“Innovate & pursue new opportunities”
Exploit existing demand
Make the value-cost trade-off
Beat the competition
Compete in existing market space
Align the whole system of a company’s
activities with it’s strategic choice of
differentiation or low-cost
“Defend current position”
54. L’école la plus proche pour aller loin
Examples for Blue Ocean
strategy
Blue ocean for
coffee bars
Blue ocean for
Iphone and Ipod
Blue ocean in watches for every mood
and every look
Blue ocean for search engines
Ø These companies questioned the norms & boundaries set by the industries
they were in.
Ø They created new markets and gained market shares without fighting
against direct competition.
Blue ocean for vacuum
cleaners without a bag
55. L’école la plus proche pour aller loin
Finding blue oceans
« Four actions Framework »:
4 questions to break the trade-off between differentiation
and low cost, and to create a new value curve:
• Raise: What factors should be raised well above the
industry's standard?
• Eliminate: Which factors that the industry has long
competed on should be eliminated?
• Reduce: Which factors should be reduced well below
the industry's standard?
• Create: Which factors should be created that the
industry has never offered?
56. L’école la plus proche pour aller loin
Individual exercice:
Blue Ocean strategy –
start-ups in France
To dig deeper in the phenomenom of a blue ocean strategy and to
learn about concrete examples in France, read through the article.
If necessary you might do a quick search on the Internet about the
mentioned start-ups.
We will shortly discuss the given examples and the reasons that
make them « blue ocean strategists ».
Preparation time: 20 min.
Plenum discussion of your findings: 10 min.
57. L’école la plus proche pour aller loin
4/ Group exercise:
business strategies
We have heard about Porters generic strategies, the Strategy clock and the Blue
Ocean strategy. You will now work with your group on one of these business
strategy tools in order to better understand the different concepts and present them
to your student fellows.
Porters generic strategies: explain Porters approach with your own words and
name one example/Brand/product for each of the strategies.
Strategy clock: What is the purpose of the Strategy clock and which questions
must be answered in order to define the company’s position in terms of value and
price. Try to find an example, a brand / product for each of the eight positions.
Blue Ocean strategy: Give a short insight on the origins of the Blue Ocean
strategy and summarize the characteristics of a Blue Ocean strategy. This
approach aims to break out of the traditional low cost versus differentiation
sttrategies. Find the key questions / framework that a company should ask itself to
create a « blue ocean ».
58. L’école la plus proche pour aller loin
4/ Group exercise:
business strategies
Group
1 Group
2 Group
3 Group
4 Group
5 Group
6
Blue
Ocean
Porters
generic
strategies
Bowmans
Strategy
Clock
Porters
generic
strategies
Bowmans
Strategy
clock
Blue
Ocean
Porters generic strategies: explain Porters approach with your own words and
name one example/Brand/product for each of the strategies.
Strategy clock: What is the purpose of the Strategy clock and which questions
must be answered in order to define the company’s position in terms of value and
price. Try to find an example, a brand / product for each of the eight positions.
Blue Ocean strategy: Give a short insight on the origins of the Blue Ocean
strategy and summarize the characteristics of a Blue Ocean strategy. This
approach aims to break out of the traditional low cost versus differentiation
sttrategies. Find the key questions / framework that a company should ask itself to
create a « blue ocean ».
Preparation time: 45 min.
Presentation & plenum discussion of analysis: 6x10 min.
59. L’école la plus proche pour aller loin
Logbook entry : Chapter 3
Business strategies
• Any questions?
• Logbook entry: Take 5 min. to resume what
you have learned during this first chapter?
– What was new for you?
– What was particularly interesting for your?
– When you think of your work, what will be useful
in the future?
You may mindmap if you like.
60. L’école la plus proche pour aller loin
The difference between
Corporate & Business strategy
61. L’école la plus proche pour aller loin
Corporate strategies
- what businesses should we be in
² 3 corporate strategies: specialization, horizontal/
vertical integration, diversification
² Internationalization
62. L’école la plus proche pour aller loin
3 Corporate strategies
A single
activity
Specialization
strategy
Yes
No
Integration
Strategy
- Vertical
- Horizontal Diversification
strategy
If horizontal
then If
International
activity
Internationali-
zation
strategy
63. L’école la plus proche pour aller loin
Specialization
Specialization is a corporate strategy that concentrates all
efforts and competencies on one single activity (limited
number of products and limited number of customers).
The target is to become market leader within a particular
market.
This strategy may sometimes also be called market
penetration strategy.
What could be advantages or disadvantages of running a
specialization strategy?
64. L’école la plus proche pour aller loin
Specialization
Pros Cons
• Focus your resources, concentrate on
the heart of a company’s business
• Risk to focus on the wrong business
(declining market)
• Simplifies the management of the
company
• Create an ego-centric company culture
• Take benefit of your learning curve:
cost advantages (continuous
improvement)
• Limited strategic flexibility
• A clear image: all stakeholders know
what the company stands for
• Limited number of Key Success factors
= easier to handle
65. L’école la plus proche pour aller loin
Diversification
Diversification is a corporate strategy to enter into a new
market or industry which the business is not currently in,
whilst also creating a new product for that new market.
Isor Ansoff has defined 4 growth strategies:
Market penetration /
Specialization
Product development
Market development Diversification
Products
Present New
Markets
NewPresent
66. L’école la plus proche pour aller loin
Diversification strategy
Pros Cons
• Diversification of activities and
risks
• Heavy financial investments
• Reduced direct competition for
your company as a whole
• Risk of losing focus
• Control of your own supply chain:
control of quality, quantity and
costs
• Rigid and complex structures
• Transparency / access to
information along the whole value
chain
• Higher fixed costs
• Cost reduction (internal
transaction costs)
• Risk of losing company’s culture
and diluting brand image
67. L’école la plus proche pour aller loin
Integration strategy
h(ps://www.youtube.com/watch?v=ZDj8WsvGT2o
An example of vertical integration
68. L’école la plus proche pour aller loin
And what is horizontal
integration?
Horizontal integration is a strategy where a company acquires, mergers
or takes over another company in the same industry value chain.
Manufacturing
Retailing
Company
A
Company
B
Company
C
Company
D
Horizontal integration
Verticalintegration
69. L’école la plus proche pour aller loin
3 Corporate strategies
A single
activity
Specialization
strategy
Yes
No
Integration
Strategy
- Vertical
- Horizontal Diversification
strategy
If horizontal
then If
International
activity
Internationali-
zation
strategy
70. L’école la plus proche pour aller loin
Internationalization strategy
options
Low Local responsiveness High
LowCostpressureHigh
Global Strategy
One World Strategy
Multidomestic Strategy
Country Centred
Offices
International Strategy
Export
Transnational Strategy
Country Centred
manufacturing
71. L’école la plus proche pour aller loin
Logbook entry : Chapter 3
Corporate strategies
• Any questions?
• Logbook entry: Take 5 min. to resume what
you have learned during this first chapter?
– What was new for you?
– What was particularly interesting for your?
– When you think of your work, what will be useful
in the future?
You may mindmap if you like.
72. L’école la plus proche pour aller loin
Strategy development process:
Formulate – Implement - Evaluate
Statusofpurpose:
VISION&MISSION
RESSOURCE
ALLOCATION
Creationof
TACTICS&
ANNUALGOALS
STRATEGYDEVELOPMENT,
Evaluation&Selection
External
Analysis
Formulation
of
LONGTERM
GOALS
Internal
analysis
PERFORMANCE METRICS & EVALUATION
73. L’école la plus proche pour aller loin
5/ Group exercice: Lego
- the strategic planning
process
We will go through Legos Strategic planning process and
summarize the different phases:
I. Analysis + formulation (SWOT and choice of a generic
strategy)
II. Choice of tactics (action plan)
III. Implementation + measurement (Implementation
measures across departments and feedback)
Group
1 Group
2 Group
3 Group
4 Group
5 Group
6
II)
Ac]on
plan
III)
Implementa]on
I)
SWOT
&
generic
strategy
III)
Implementa]on
I)
SWOT
&
generic
strategy
II)
Ac]on
plan
74. L’école la plus proche pour aller loin
5/ Group exercice: Lego
- the strategic planning process
We will go through Legos Strategic planning process and summarize the different
phases:
I. Analysis + formulation (SWOT and choice of a generic strategy):
- On one page, perform a SWOT analysis for Lego as a company (including all
business activities) based on their situation in 2003.
This analysis is the basis for the change process).
- According to your evaluation, which one of Porters generic strategies is followed for
the Lego bricks business? Argument your choice.
II. Choice of tactics (action plan / anticipation of possible blocking points)
– Based on the complete analysis of the company’s situation, the CEO set up a
shared vision in 3 phases. Can we speak about a strategy or is it tactics? Why?
– Describe the 3 phases and the according objectives. What are the concrete
actions that Lego put in place to turn around the business (10 steps – for which
aim? Which internal levers are adressed to solve which problems?
– Can you think of possible resistance and blocking points that these changes
encountered internally? From whom and for what reasons?
75. L’école la plus proche pour aller loin
5/ Group exercice: Lego
- the strategic planning process
III. Implementation + measurement (Implementation measures across departments and
feedback)
- In 2013, which are the results of the implemented measures?
- As a conclusion, what are the positive changes that have been achieved, what was
their impact?
- Communication is a key factor for the successful implementation of a strategy plan.
What measures are taken by Lego to assure a good and clear communication.
Make it clear and transparent why the business turn-around of Lego seems to be
successful. You conclusion should serve as a recommendation on how to
successfully implement a strategic plan.
Preparation time: 60 min.
Presentation: 10 min. per group
76. L’école la plus proche pour aller loin
Lego case study
Acquired competencies and skills:
• Analyze and understand the situation of a company in difficulties.
• Identify the strategy that Lego perceives and the reasons to do so.
• Identify and summarize the action plan and its reasons.
• Understand the challenges and risks that the action plan implies.
• Be aware of internal blocking points for the implementation of a
strategy.
• Read and express yourself in business english.
• Share your professional experiences and different specializations to
solve this case together.
• Team work!
77. L’école la plus proche pour aller loin
Strategy “light” for SMEs
In a lot of SMEs, the strategy is in the head of the CEO. It is
not written nor tangible to most of the employees.
EVERY company needs to have a strategy though. And
every company can develop quite easily it’s strategy
without massive powerpoint slides to fill-in.
The two lists of questions on the hand-out help you to
quickly evaluate the current strategy of your company and
to work on the development on a better/new strategy.
78. L’école la plus proche pour aller loin
Agenda
Day 1 Day 2 Day 3
Introduction to Strategic
management & Strategy
concepts
Chapter 1:
ü Key definitions
ü Vision & Mission
ü Strategic planning process
ü Benefits
Strategic tools
Chapter 2:
ü Strategic segmentation
ü Strategy tools: Internal &
external analysis
Recap of Day 1
Strategic tools
Chapter 2:
ü Strategy tools: Internal & external
analysis
Case study: team work
Chapter 3:
Business strategy
ü Porters Generic strategies
ü Strategic clock
ü Blue Ocean
Case study: team work
Corporate strategy
ü Differenciation
ü Specialization
ü Integration
ü Internationalization
Case study: team work
Recap of Day 2
Chapter 4:
Portfolio Management
ü Growth strategies
ü Strategy evaluation
Team work:
presentations
79. L’école la plus proche pour aller loin
Portfolio Management:
definition
Strategic portfolio management decides on
starting, stopping, reducing, growing, and
regrouping activities.
Strategic portfolio analysis classifies the
companys’ products and services by their relative
competitive position and projected growth rate.
This analysis can guide strategic resource
allocation.
80. L’école la plus proche pour aller loin
Portfolio Management:
matrix’ again and again
Name Environmental factor/
external criteria
Company’s position
Quantitative Matrix BCG (60’s) Market growth rate Relative market
share
Quantitative Matrix ADL Business maturity Competitive
position
Qualitative Matrix McKinsey Sector attractiveness for
the company
Competitive
position
81. L’école la plus proche pour aller loin
Introduction to the BCG matrix:
a tool to define a balanced portfolio
h(ps://www.youtube.com/watch?v=hfVdLt0T3Mk
82. Portfolio Management Tools:
BCG Matrix
High
Low
Low
High
Relative Market Share
RelativeMarketGrowthRate
?Stars
Cash Cows Dogs
Question marks
82
Liquidate
Divest
Select
a few
Invest
84. L’école la plus proche pour aller loin
Indicators to evaluate business
maturity (Adl MATRIX)
Competitive
POSITION
Industry MATURITY
Embryonic Growing Mature Aging
Leading
Strong
Favourable
Tenable
Weak
Nonviable
85. L’école la plus proche pour aller loin
Example evaluation of
business maturity and options
Competitive
POSITION
Industry MATURITY
Embryonic Growing Mature Aging
Leading - Hold position
- Push for market
share
- Hold position
- Hold market
share
- Hold position
- Grow with industry
- Hold position
Strong - Attempt to improve
position
- Push for market
share
- Attempt to improve
position
- Push for market
share
- Hold position
- Grow with industry
- Hold position or
harvest
Favourable - Selectively attempt
to improve position
- Selective push for
market share
- Attempt to improve
position
- Selective push for
market share
- Maintenance
- Find niche and
attempt to protect it
- Harvest or phased-
out withdrawal
Tenable - Selective push for
position
- Find niche and
protect it
- Find niche and hang-
out or phased-out
withdrawal
- Phased-out
withdrawal or
abandon
Weak - Up or cut - Turn around or
abandon
- Turn around or phased-
out withdrawal
- Abandon
Nonviable
BU
86. L’école la plus proche pour aller loin
Evaluate businesses along market
attractiveness & business unit
strength: McKinsey Matrix
High Protect
position
Invest
to Build
Build
Selectivity
Medium Build
Selectivity
Selectivity /
Manage for
Earnings
Limited
Expansion or
Harvest
Low Build
Selectivity
Manage for
Earnings
High Medium Low
Strategic Business Unit Strength
MarketAttractiveness
Possible criteria
to evaluate
business
attractiveness:
- Market size
- Market growth
- Industry profit
margin
- Amount of
competition
- Seasonal /
cyclical
fluctuations in
demand
- Industry cost
structure
The
SBU
strenght
index
consists
of
factors
like
-‐ rela]ve
market
share
-‐
sales
effec]veness
-‐
price
-‐
geographic
advantages
-‐ compe]]veness
-‐
customer
and
market
knowledge
-‐ product
quality
30%
MS
87. L’école la plus proche pour aller loin
Application of McKinsey Matrix to evaluate the
products’ attractiveness in correlation with the
BU strengths- an example
88. L’école la plus proche pour aller loin
Take strategic decisions!
Internal growth
External growth
Shut-down Partnering
Sell
89. L’école la plus proche pour aller loin
Internal growth
A company is growing by its own means.
It is also called organic growth.
You may achieve internal growth by increasing your
production capacity (expansion).
You can also grow by reinforcing your R&D capacities
or your way of selling your products.
Innovation is key for internal growth
(product innovation or innovative services).
90. L’école la plus proche pour aller loin
Internal growth
Pros Cons
Progressive
growth
that
is
easily
manageable.
Slow
growth
Reinforcement
of
company’s
culture.
Risk
to
stagnate
Improvement
of
social
climate,
mo]va]ng
for
employees.
Difficul]es
to
finance
your
growth
91. L’école la plus proche pour aller loin
External growth
Pros Cons
Grow
quickly
Integra]on
problems
Acquire
technical
competencies
and
skills.
Risk
for
nega]ve
synergies.
Enables
your
company
to
diversify
more
easily.
Uncertainty
about
the
value
of
target
company
Alterna]ves
to
finance
your
investment.
Target
company
does
not
correspond
to
your
strategic
targets
Weak
reac]vity
of
your
compe]tors.
Threat
to
the
company
culture
A
company
is
looking
for
growth
by
buying
other
companies.
92. L’école la plus proche pour aller loin
Individual exercice:
External growth
BurgerKing wants to buy Quick
& An extract of Facebooks acquisition strategy
Read both articles that showcase different goals that a company wants to achieve by
driving an acquisition strategy.
BurgerKing:
• Why does BurgerKing think that Quick is the right acquisition target? What do they want to
achieve by buying Quick?
• Is there a difference for the restaurants outside of France?
Facebook:
• What are the two main drivers for the selection of acquisition targets?
• How is the acquisition strategy evolving over time?
• Is it a diversification strategy or rather a differenciation strategy?
Preparation time: 45 min.
Plenum discussion of your findings: 15 min.
93. L’école la plus proche pour aller loin
Joint growth / Partnering
• Through a partnership or joint venure with a complementary, non-
competitive business, a company can be able to open new markets
or to improve your offer to existing markets.
• JVs & partnering can offer significant benefits: Sharing
– Experience
– Skills
– People
– Equipment
– Customer bases
• An agreement defining the terms of the partnership or joint venture
is essential and legal protection is advisable.
• Teaming up must be a win-win situation for both parties
94. L’école la plus proche pour aller loin
Joint growth / Partnering
- an example
A group of sole traders
- a carpenter, builder and gas installer/electrician –
could form a company, which could increase their credibility
in the construction trade and allow them to bid for larger
contracts.
A group like this also represents greater customer appeal,
as it's a one-stop shop.
95. L’école la plus proche pour aller loin
Divestment / abandon strategy
What is it about?
Divestment strategy is used by businesses when they downsize
the scope of their business activities.
Divestment usually involves eliminating a portion of a business.
How?
Firms may elect to sell, close, or spin-off a strategic business
unit, major operating division, or product line.
Why?
This move often is the final decision to eliminate unrelated,
unprofitable, or unmanageable operations.
96. L’école la plus proche pour aller loin
Reasons for divestments
• Market Share is too small.
• Better alternatives are available.
• An increased investment is needed.
• Strategic fit is lacking.
• Legal pressure to divest.
97. L’école la plus proche pour aller loin
Outsourcing strategy
Outsourcing involves the contracting of a business process to a
third party.
Outsourcing includes both domestic and foreign outsourcing and
sometimes means Off-shoring (relocating a business function to
another country).
Why?
Companies primarily outsource to reduce certain costs:
such as "non-core" business expenses, high taxes, high energy
costs, excessive legal regulations, production and/or labor costs.
Examples:
Call centers, HR function - Pay rolls for large companies
98. L’école la plus proche pour aller loin
Logbook entry : Chapter 4
Portfolio Management
• Logbook entry: Take 5 min. to resume what
you have learned during this first chapter?
– What was new for you?
– What was particularly interesting for your?
– When you think of your work, what will be useful
in the future?
You may mindmap if you like.
99. L’école la plus proche pour aller loin
Strategy development process:
Strategic choices
Statusofpurpose:
VISION&MISSION
RESSOURCE
ALLOCATION
Creationof
TACTICS&
ANNUALGOALS
STRATEGYDEVELOPMENT,
Evaluation&Selection
External
Analysis
Formulation
of
LONGTERM
GOALS
Internal
analysis
PERFORMANCE METRICS & EVALUATION
100. L’école la plus proche pour aller loin
“If you can’t measure it, you can’t
manage it. If you can’t manage it, you
can’t improve it.”Kaplan and Norton
101. L’école la plus proche pour aller loin
How to evaluate a strategy?
• Coherence between the selected strategy and the
conclusions of your strategic diagnostics (check if the strategy
responds to SWOT)
• Acceptance: expected perfomance of the chosen strategy.
Criteria of performance measurement: wins, risks and
reactions from all involved parties.
• Feasibility: does a company have sufficient resources and
competencies to implement the strategy.
– Financial feasibility: expected earnings – expected spendings=
needs of investments / financing capacities
– Organizational feasibility:
competencies needed / existing / to be developed. Who?
How? Where?
structures and processes necessary for implementation
Timelines, quality and cost of putting these resources in place.
102. L’école la plus proche pour aller loin
Key success factors for
strategy implementation
Ø Alignment of initiatives (ie. Balanced Scorecard)
Ø Align budgets and performance (performance
measures, incentives)
Ø Structure follows strategy (organizational
changes)
Ø Engage staff (prepare, include, communicate,
clarify)
Ø Monitor and adapt
104. L’école la plus proche pour aller loin
In a nutshell: strategy needs
time & implication
105. L’école la plus proche pour aller loin
Individual exercice:
Failures
You have an extensive list of barriers to success, reasons for failures,
symptoms and consequences.
If you were in charge of setting-up a process for strategic planning in
your company, which actions would you recommend in order to prevent
a maximum of the above listed sources for failure before running your
strategy planning process?
Brainstorm and list at list 8 prevention measures.
Preparation time: 60 min.
Plenum discussion of your findings: 20 min.
106. L’école la plus proche pour aller loin
8/ Group exercice:
BlaBlaCar
2 groups will jointly prepare a role play / a real dialogue between a
candidate for the position as Growth Project Manager within BlaBlaCar.
This is already the second application round and the management
team of BlaBlaCar has asked you to work on a case study in order to
demonstrate your ability to fulfill the job requirements and to prove that
you have experience in defining and implementing growth strategies.
You will choose one growth option (for example Internationalization or
organic growth via new partnerships in existing markets and execute a
short summary of a strategic plan for one project.
This will be presented to the CEO, CFO, CTO and HR of Blablacar ,
who will assess your idea and challenge your arguments.
107. L’école la plus proche pour aller loin
8/ Group exercice:
BlaBlaCar
Possible options and minimum expectations towards the candidates:
Internal growth / partnerships:
- Who could be a possible partner? To achieve which goal?
- Whilst looking for partners think also about acquisition. Is this an
option? What kind of company type (which services / products)
could be a target and what for?
- Choose one example and perform a SWOT.
- Define strategic initiatives (what/ target / who)
- Define investments needed (what for and how much? Dummy
figures)
- And the expected outcome (financials and others? Dummy figures)
- What KPIs do your propose to be tracked in order to assure the right
implementation of your strategy?
108. L’école la plus proche pour aller loin
8/ Group exercice:
BlaBlaCar
Internationalization:
BlaBlaCar has offices in Madrid, Paris, Warsaw, Hamburg, Moscov, Istanbul
and London.
You might think of selecting one of these countries and perform an analysis to
demonstrate that it is a real growth opportunity to develop the company’s
presence in this market.
So to convince the Management team from your strategic skills you should
include the following questions:
- In order to get a clear picture of the situation and the potential; perform at
least a country-SWOT. PESTEL could also be interesting.
- Define the great outlines of an action plan to prepare Blablacars market
entry. What should be the next steps if we want to drive growth in the
country of your choice (high-level, not in details) (what/ target / who)
- Define investments needed (what for and how much? Dummy figures)
- And the expected outcome (financials and others? Dummy figures)
- What KPIs do your propose to be tracked in order to assure the right
implementation of your strategy?
109. L’école la plus proche pour aller loin
8/ Group exercice:
BlaBlaCar
The Management team role:
CEO: drives the company’s vision.
CTO: leads the technical evolution of BlaBlaCar.
COO. leads the company’s international growth.
Head of HR: in charge of recruitment
With which arguments will you convince the different people with their varying interest
about your growth project? Which questions and interest might they have (financial,
growth, innovation, people satisfaction etc. What could their questions be to challenge
the strategy proposal? What are their expectations?
Methodology:
Both groups decide together on the project that has to be presented. Then each group
prepares its part and constructs an interaction / a real dialogue in order to simulate the
job interview situation.
Group
1 Group
2 Group
3 Group
4 Group
5 Group
6
Candidates Candidates Candidates BlaBlaCar
mgt BlaBlaCar
mgt BlaBlaCar
mgt
110. L’école la plus proche pour aller loin
8/ Group exercice:
BlaBlaCar
Role play:
Group 1 + 6
Group 2 + 5
Group 3 + 4
Preparation time: 1h30
Role play per group: 20 minutes
All students will give their feedback on the presented arguments and the relevance of the
questions of the management team!
Group
1 Group
2 Group
3 Group
4 Group
5 Group
6
Candidates Candidates Candidates BlaBlaCar
mgt BlaBlaCar
mgt BlaBlaCar
mgt