Strategic thingking 2020

1. Strategic thinking
by Pham Hung Cuong
5/14/2023
1

2. Objectives
O Demonstrate knowledge of the specific tools
and frameworks of strategy as it relates to the
current competitive strategy of an organization
and its operating environment
O Select and apply strategy tools and frameworks
with which to produce an analysis of the
strategic issues facing an organization and an
evaluation of the appropriateness of its current
strategy.
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3. References
Essential Textbook
O Foundations of Strategy, 2012, Robert M Grant & Judith Jordan. Wiley
Additional Texts
O Exploring Strategy, 9th edition, 2011, Gerry Johnson, Richard
Whittington, Kevan Scholes, Prentice Hall
O Good Strategy Bad Strategy. The Difference and Why it Matters. 2011.
Richard Rumelt. Palgrave
O Understanding Michael Porter. Essential Guide to Competition and
Strategy. 2012. Joan Magretta. Harvard Business School Press
O Playing to win. How Strategy Really Works. 2013. A.G. Lafley and
Roger L. Martin. Harvard Business Review Press.
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4. Evaluation
O Attendance: 10%
O Mid-term exam: 30%
O Final paper: 60%
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5. Rules required inside class
Do not lay your head on the desk, fall asleep
Do not do private things
Keep your mobile phones silent
Raise questions if you do not understand
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6. Strategic thinking
by Pham Hung Cuong
Chapter 1
What is strategy?
5/14/2023
6

7. Questions
1. What is strategy?
2. What are roles of strategy in success?
3. How do you describe a firm’s strategy?
4. Whose interests should be prioritized?
5. What are considerations for analysing competition?
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8. What is strategy?
O Some elements/characteristics
O Long term
O Competitive advantage
O Planning
O Distinctiveness
O “Big” decisions
OSignificant resources
OImportant
ONot easily reversible
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9. What is strategy?
O Where to compete?
O Which businesses should we be in?
O A corporate strategy decision
O How to compete?
O How do we create / build / defend a
competitive advantage?
O A competitive strategy / business strategy
decision
O Interlinked but, in principle, distinct
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10. Strategy is about choice
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11. The role of strategy in success
Common elements in successful strategies
Successful Strategy
Simple,
consistent, long-
term goals
Profound
understanding of
the competitive
environment
Objective
appraisal of
resources
Effective Implementation
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12. Strategy today
O What is strategy?
RATE OF RETURN
ABOVE THE COST
OF CAPITAL
How do we make
money?
INDUSTRY
ATRACTIVENESS
Which industries
should we be in?
COMPETITIVE
ADVANTAGE
How should we
compete?
CORPORA
TE
STRATEGY
BUSINESS
STRATEGY
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13. How do we describe a firm’s strategy?
Static
Where are we competing?
How are we competing?
Dynamic
What do we want to
become?
What do we want to
achieve?
How will we get here?
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14. How do we identify a firm’s strategy?
O The mission statement – ‘Why we exist?’
O A statement of principles and values – ‘What we
believe in and how we will behave’
O The vision statement – ‘What we want to be’
O The strategy statement – ‘What our competitive
game plan will be’
O Where is the company investing its money?
O What technologies is the company developing?
O What new products have been released?
O Intended vs. released vs. emergent strategy
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15. Whose interests should be prioritised?
O Shareholders vs. stakeholders
O Profit and purpose
O The debate over CSR
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16. Developing analytical tools
• The foundations of mainstream strategy lie in
analysis of competition and firms’ quest to
outperform their rivals.
• Four key considerations:
- Competition
- The market for corporate control
- Convergence of stakeholder interests
- Simplicity
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17. Strategy analysis
THE FIRM
•Goals and values
•Resources and
capabilities
•Structure and
systems
THE INDUSTRY
ENVIRONMENT
•Competitors
•Customers
•Suppliers
STRATEGY
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18. What is strategy?
A plan to
achieve our
goals.
Exists at
multiple
levels – all
linked.
Helps us
make wise
choices as
conditions
change.
As
conditions
change, the
plan itself
evolves.
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19. Discussion
Choose a specific company and:
- Make short introduction about this company.
- Analyse its biggest competitor.
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20. Strategic thinking
by Pham Hung Cuong
Chapter 2
What is Strategic Thinking?
5/14/2023
20

21. Questions
1. What is Strategic thinking?
2. What are different between strategic thinking and
strategic planning?
3. What are different between reactive future approach
and proactive future approach?
4. How do you get started with strategic thinking?
5. What is aim of strategic thinking?
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22. What is strategic thinking?
• “At this point, there is no generally accepted
definition of the term, no common agreement
as to its role or importance, and no
standardized list of key competencies of
strategic thinkers.” Wikipedia
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23. What is strategic thinking?
Strategic thinking
is learned, not
innate.
Strategic thinking
cannot be taught.
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24. What is strategic thinking?
The ability to see what is and what could be –
and make choices that lead to desired outcomes.
Analysis
Vision/Goals
Seeing
systems
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25. What’s your definition
of strategic thinking?
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26. From the literature
• “The way in which people in an
organization think about, assess,
view and create the future for
themselves and their associates. It
is more than responding to both
day-to-day as well as long-term
problems, opportunities and new
realities; it is creating tomorrow.
It is not reactive, but proactive…
Strategic thinking always
involves change, and often,
profound personal change.”
Kaufman et al (2003: 40-41)
• A “cognitive process … that
precedes strategic planning or
action, whereby an individual
contemplates the future
development of the organisation
whilst considering its attributes,
its past and present and the
external realities within which it
operates.”
Tavakoli and Lawton (2005: 6)
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27. Strategic thinking is identifying, imagining and understanding
possible future operating environments for your organization.
You can use that knowledge to expand your thinking about
your potential strategic options…
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28. …to position your organization effectively
in the external environment,
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29. …in order to make better informed decisions
about action to take today.
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30. • Thinking about
the future is using
your innate
foresight capacity.
• In a strategy
context, for an
organisation, it’s
about building a
strategic foresight
capacity.
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31. Foresight?
• The ability to take a forward view and use the insights
gained in organisationally useful ways.
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32. Current approaches
to strategic thinking
Traditional Trying Futures
Ready
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33. 5/14/2023
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34. Strategic Thinking Strategic Planning
Only the shape of the future can be
predicted
Future is predictable and specifiable in detail
Relies on self-reference – a sense of strategic
intent and purpose embedded in the minds of
managers that guides their choices
Asserts control through measurement
Requires that managers have an
understanding of the larger system
Assumes that the manager below need only
to know his or her own role well
Sees strategy and change as inescapably linked
and assumes that finding new strategic options
and implementing them successfully is harder
and more important than evaluating them
Assumes that the challenge of setting
strategic direction is primarily analytic
Sees the planning process itself as a critical
value-adding element
Focus on the creation of the plan as the
ultimate object
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35. Purpose Thought Process
Strategic Thinking Discovernovel, imaginative
strategies that can re-write the
rules of the competitive
game; and to envision
potential futures;
significantly different from
the present.
Synthetic
Divergent
Creative
Strategic Planning Operationalise strategies
developed through strategic
thinking, and to support the
strategic thinking process.
Analytical
Convergent
Conventional
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36. • Longterm Uncertain
Divergent
• Incomplete
• Beyond linear
• Disrupting alignment
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37. • Short term
• Logical
• Convergent
• Pragmatic
• Deductive
• Creating
• Alignment
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38. • Current strategy processes tend to focus on the plan
as the major outcome, rather than a shared
understanding of your organization's preferred future
to inform action today.
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39. 5/14/2023
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40. Thinktomorrow is going
to be more of today
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41. Can’tcope
withthe
unexpected
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42. Usually don’t explore
the long term future
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43. Preferquantitative over
qualitative information
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44. Don’t challenge
assumptions
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45. Downplay or dismiss staff beliefs,
hopes and fears about the future
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46. Mintzberg (1994)
• “Strategic planning often spoils strategic thinking,
causing managers to confuse real vision with the
manipulation of numbers…”, and that “…the most
successful strategies are visions, not plans”. Strategic
planning then is better characterised as “strategic
programming, the articulation and elaboration of
strategies, or visions, that already exist”.
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47. Heracleous (1998)
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48. Liedtka (1998)
• Traditional strategic planning processes as having
“choked initiative and favoured incremental over
substantive change.
They have emphasized analytics and extrapolation
rather than creativity and invention….They have
lulled us into complacency with their comforting
illusion of certainty in what is in reality a
hopelessly uncertain world.”
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49. But…Lietdka (1998)
• “There is little in the notion of planning itself that
undermines strategic thinking; rather, it is the
processes through which we have operationalized
planning, and the assumptions that we have made
about how and who ought to plan, that have
gotten us into trouble. We have designed planning
systems where participation in formulation is limited
to senior management, while the rest of the
organization waits to implement.”
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50. • Current strategy processes live in the pragmatic
futures realm.
• Working within the existing paradigm, making it
better, but not challenging it.
• We call it „strategic planning‟.
• Beyond strategic planning – to strategy development
and implementation.
• Moving into the progressive futures realm, where
we challenge the current paradigm and re-interpret
how we do business to meet the challenges of the
future
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51. Moving from pragmatic to progressive approaches requires
a strong focus on building a high quality strategic thinking
capacity in your organisation.
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52. We can't solve
problemsby using the
same kind of thinking
we used when we
created them.
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53. Reactive Future Approach Proactive Future Approach
What has happened? What is happening?
What caused it to happen? What is driving the trends that
will influence our future?
What are our alternative futures?
How do we respond? What ought we do today?
What would be the long term
consequences of our actions
today be?
What will we do? What will we do?
After the event Anticipating the event
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54. The gap between reactive and proactive approaches
is bridged by making time for strategic thinking.
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55. So how do we get
startedwith
strategic
thinking?
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56. Inputs
Analysis
Interpretation
“what is happening out there?”
“what seems to be happening?”
“what‟s really happening?”
Prospection “what might happen?”
Outputs “what might we need to do?”
Strategy “what will we do?” “how will we do it?”
Foresight
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57. Plan and
Do
Thinking
Envision a
preferred
future
Identify
Drivers of
Change
External
Quantitative
Tangible
S e en
Internal
Qualitative
Intangible
Unseen
Planning
Critique
Drivers
for
Relevance
Imagine
what’s
possible
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58. • The aim of strategic thinking is
to understand - as best we can -
the long term context of our
decisions today so that we make
those decisions as wise and as
robust as is possible.
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59. Discussion
Choose a specific company and:
- Make short introduction about this company.
- How does this company get started with strategic
thinking?
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60. Strategic thinking
by Pham Hung Cuong
Chapter 3
Some strategic thinking tools
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61. Questions
1. What are the factors of internal environmental
scanning?
2. What are the factors of external environmental
scanning?
3. What is the biggest challenge to strategic thinking?
4. What are attributes of strategic thinking?
5. What are factors of strategic thinking?
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62. Inputs
Analysis
Interpretation
“what is happening out there?”
“what seems to be happening?”
“what‟s really happening?”
Prospection “what might happen?”
Outputs “what might we need to do?”
Strategy “what will we do?” “how will we do it?”
Foresight
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63. Inputs
• Environmental
Scanning
• Provides the raw
information to inform your
strategic thinking.
• Both internal and external
to your organisation.
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64. Where to scan
Global,
multiple
dispersed
cases,trends
and
megatrends
Newspapers,
magazines,websites,
journals,blogs
Government
Institutions
LateMajority
Numberof
cases;
degreeof
Scientists,artists,
radicals,mystics Mainstream
Laggards
public
awareness
Fewcases,
local focus
EmergingIssues
Innovators
LateAdopters
Trends
Early adopters
Today Time
Time from emerging issue to mainstream varies between 18-36 years
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65. Analysis
• Looking for patterns and themes
relevant for your organisation.
• Trend analysis
• Emerging Issues Analysis
• Forecasting
• Delphi
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66. Interpretation
• System structure and
dynamics – whose
beliefs are dominant?
• What‟s driving the
trends? And what does
it mean for us?
• How will they develop?
• Futures Wheel
• Cross Impact Analysis
• Causal Layered Analysis
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67. Prospection
• How will the trends
evolve over the next
10-20 years?
• How might we
respond? What are our
options?
• Scenario planning
• Visioning
• Backcasting
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68. 5/14/2023
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69. The biggest challenge
to strategic thinking
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70. The busyness syndrome
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71. • The pressures of his job drive the manager to be
superficial in his actions - to overload himself
with work, encourage interruption, respond
quickly to every stimulus, seek the tangible and
avoid the abstract, makes decisions in small
increments, and do everything abruptly.
Henry Mintzberg. The Manager‟s Job: Folklore or
Fact, HBR, 1975
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72. • “Managers who get caught in the trap of
overwhelming demands become prisoners of
routine. They do not have time to notice
opportunities. Their habituated work prevents them
from taking the first necessary step toward
harnessing willpower: developing the capacity to
dream an idea into existence and transforming it
into a concrete existence.”
Heike Bruch & Sumantra Ghoshal, A Bias for Action: How Effective Managers Harness
Their Willpower, Achieve Results, and Stop Wasting Time, HBSP, 2004
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73. To think strategically,
you have to move beyond busy. 5/14/2023
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74. 5/14/2023
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75. • Scan often,
scan well
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76. • Invest more
time in
doing this…
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77. • …as well
as this.
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78. Think long term, act today
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79. Individual
Unconscious
Implicit
Solitary
Organisational
Conscious
Explicit
Collective
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80. What this means
Individual
Consciousness
Individuals
in Action
Critical Mass
of Staff
Strategic
Foresight
Capacity
Values/Beliefs New models New processes
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81. We think strategically to avoid havingthis perspective on the future…
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82. Key questions that can help
O What is our goal/purpose?
O What key problems, causes and solutions do we exist to address?
O What are past, current and possible future trends?
O What are the key opportunities and threats we face? (Where is greatest
leverage? Where is greatest risk?)
O What will it take? What are possible course of action?
O What are the implications of these choices?
O What criteria will we use to choose and evaluate a course of action?
O How does our plan intersect with other goals/plans?
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83. What is strategic thinking?
O Reviewing the literature related to strategic
management, points out that there is no agreement
on definition of strategic thinking. A number of
authors have used strategic thinking
interchangeably with other concepts such as
strategic planning or strategic management
(Monnavarian et al, 2011).
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84. What is strategic thinking
O Strategic thinking has been investigated in
both the management and psychological
literature with the management literature
concentrating on the process of strategic
thinking and making strategic decisions
(Mintzberg, 1994; Drejer et al., 2005) whereas
the psychological literature has concentrated
on factors affecting strategic thinking and
decision making (Hambrick and Mason, 2001;
Pant, 1998).
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85. What is strategic thinking?
O According to the management approach
strategic thinking involves two distinct
thought processes: planning and thinking.
Planning concerns analysis, this involves
establishing and formalizing systems and
procedures whereas thinking involves
synthesis encouraging intuitive, innovative
and creative thinking at all levels of the
organization (Mintzberg, 1994).
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86. What is strategic thinking?
O Drejer et al., (2005) define it as “thinking
about possible scenarios and strategy in a
creative manner that is relatively free from
existing boundaries”.
O Bonn, (2005) defines strategic thinking as “a
way of solving strategic problems that
combine a rational and convergent approach
with creative and divergent thought
processes”.
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87. What is strategic thinking?
O Garratt (1995) defined strategic thinking as a
process by which senior executives ‘‘can rise
above the daily managerial processes and
crises’’ to gain a different perspective of the
organization and its changing environments.
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88. What is strategic thinking?
O Porter (1987) states that strategic thinking is “the glue
that holds together the many systems and initiatives
within the company” he also views good strategic
planning as a contributor to strategic thinking.
O Heracleous (1998) suggests that strategic thinking and
strategic planning are interconnected and equally
significant for effective strategic management.
Thompson and Strickland (1999) stress that a well-
designed strategic management system facilitates
strategic thinking within the organization.
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89. Conclusion
O From all the previous definitions it can be
concluded that strategic thinking differs
from strategic management and strategic
planning, from the researcher point of view
strategic thinking can be defined as:
Engaging of the mind in the concepts and
theories of strategic management and
landing them on the reality of the
organization to achieve its long run goals.
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90. Strategic management, Strategic
planning and Strategic thinking
O Nowadays, Strategic Management is the father of
all branches of knowledge related to strategy
including strategic planning and strategic thinking
O Strategic Management can be defined as: a set of
managerial decisions and actions which determines
the performance of the organization in the long
run, it includes the following phases :
environmental scanning, strategy formulation,
strategy implementation, and strategy monitoring,
controlling and evaluation (Wheelen and Hunger,
2012) 5/14/2023 90

91. Strategic management, Strategic
planning and Strategic thinking
• Strategic planning can be considered as
strategic planning and can be defined as: the
development of long-range plans for the
effective management of environmental
opportunities and threats in light of
organizational strengths and weaknesses
(SWOT) (David, 2011; and Wheelen and
Hunger, 2012)
•
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92. Strategic management, Strategic
planning and Strategic thinking
O Mintzberg (1994) stated that ‘‘strategic
planning is not strategic thinking’’ (p. 107) and
suggested a clear distinction between strategic
thinking and strategic planning. In his view,
strategic planning focuses on analysis and
deals with the articulation, elaboration and
formalization of existing strategies.
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93. Strategic management, Strategic
planning and Strategic thinking
O Strategic thinking, on the other hand,
emphasizes synthesis, using intuition and
creativity to create ‘‘an integrated perspective
of the enterprise’’. He argued that each term
focuses on a different stage in the strategy
development process. In his view, strategic
planning is a process that should occur after
strategic thinking (Monnavarian et al, 2011).
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94. Strategic management, Strategic
planning and Strategic thinking
O From the researcher’s point of view strategic
thinking is a process that should occur in all
strategic management phases
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95. 5/14/2023 95

96. Attributes of strategic thinking
Liedtka (1998) posits five major attributes of strategic
thinking:
O 1. Strategic thinking reflects a systems or holistic view
that appreciates how the different parts of the
organization influence and affect each other as well as
their different environments.
O 2. Strategic thinking embodies a focus on intent. In
contrast with the traditional strategic planning
approach that focuses on creating a ‘‘fit’’ between
existing resources and emerging opportunities,
strategic intent intentionally creates a substantial
‘‘misfit’’between these. 5/14/2023 96

97. Attributes of strategic thinking
O 3. Strategic thinking involves thinking in time.
Strategic thinkers understand the interconnectivity of
past, present and future.
O 4. Fourth, it is hypothesis driven. Hypothesis
generating and testing is central to strategic thinking
activities. By asking the creative question ‘‘What if?’’
followed by the critical question ‘‘If . . . then . . .?’’
strategic thinking spans the analytic-intuitive
dichotomy that Mintzberg refers to in his definition
of thinking as synthesis and planning as analysis.
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98. Attributes of strategic thinking
O 5. Strategic thinking invokes the capacity to be
intelligently opportunistic, to recognize and take
advantage of newly emerging opportunities
O Napier and Albert (1990) referring to system thinking,
thinking about long-term profits rather than short-term
benefits, identifying repetitive patterns in the events,
choosing a person responsible for strategic thinking,
making use of past events to predict future, using past
knowledge to prepare appropriate model for decision
making.
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99. Attributes of strategic thinking
O Bonn (2005) emphasizing on process approach,
using cognitive concepts, ability in finding different
solutions for specific problems, interaction among
strategies at different levels and between different
units of organizations, understanding the dynamics
of internal and external environment, understanding
the situation of organizations within bigger systems,
visualizing future goals and most advantageous
future, knowing new competitive areas, capability
of integrating different ideas into a new and fresh
idea. 5/14/2023 99

100. Strategic thinking factors
O Creativity and attention to the past, the present and the future
O Organic structure organization
O Environment analysis
O Conflict management
O Awareness of the situation
O Futuristic approach
O Intelligence
O Diversified mind pattern
O Accountability
O Organizational climate and coordination
O Systematic thinking
O Process approach
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101. Peter Drucker’s strategic thinking
O Drucker tended to start by asking some basic
questions, which, despite their simplicity, are
often overlooked. Every senior manager, he said,
should be constantly asking ‘Do we want to be
in this business? Would we choose to enter this
sector now? Who are our customers? Where are
they? What do they want?’ In fact, all three of
his key strategies start with questioning.
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102. Peter Drucker’s strategic thinking
Zand phrases them like this:
O 1. Ask penetrating questions of people who understand
current and future realities so they can generate and
evaluate a creative set of strategic options.
O 2. Reframe the prevailing few in simple understandable
terms that enable a review of priorities and an
adjustment of actions to better adapt to the competitive
environment.
O 3. Question the assumptions underlying current views.
Consider alternative assumptions and diligently probe
their context and strategic implications
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103. Strategic thinking areas of research
O A Review on Leader's role in Creating a Culture that
Encourages Strategic Thinking.
O Improving strategic thinking: a multilevel approach.
O Leadership practices that encourage strategic
thinking
O Strategic thinking and decision making.
O Strategic thinking and knowledge management,
O The measurement of strategic thinking type for top
managers
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104. We can
benefit from
learning
about things
that LIMIT
strategic
thinking
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105. Lack of shared analysis can limit
strategic thinking
shared
vision/goals
historical
analysis
power
analysis
Problems and
causes
opportunities
and threats
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106. Power relationships can limit
strategic thinking
More
power
Less
Power
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107. Over-emphasis on only the long-
term or immediate challenges
Immediate
only
Long term
only
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108. Anchoring can limit strategic
thinking
O When faced with a choice,
we may ANCHOR on a
certain good outcome we
think will occur.
O It can be hard to remain
open to other options or
implications.
O Anchoring is often the
result of over-the-top
urgency to “just do
something.”
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109. Bias can limit strategic thinking
O We all have biases.
O We select for information
that supports our viewpoint
and experiences.
O We tend to disregard
information that doesn’t fit
our beliefs/values.
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110. What can I/we do?
SELF-REFLECTION
O What are my own strengths and weaknesses
related to strategic thinking?
O What adjustments can I make? How might I
improve my own strategic thinking skills and
habits?
O How can I provide more strategic leadership –
regardless of the position I hold?
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111. What can I/we do?
GROUP REFLECTION
O How can we (continue to) develop a shared
analysis among the staff and board?
O How can we (continue to) nurture a staff
culture that promotes strategic thinking?
O What skills/habits can we learn to improve our
ability to think and work strategically as a staff
team?
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112. Discussion
Choose a specific company and:
- Make short introduction about this company.
- What are the factors of this company for
environmental scanning?
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113. Strategic thinking
by Pham Hung Cuong
Chapter 4
Industry trends and analysis
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113

114. Questions
1. What are the main elements of environment?
2. What are the main elements in the basics?
3. What is the PESTEL analysis?
4. What are key issues in industry analysis?
5. What are determinants of the industry profit?
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115. Where to start?
O Analysis
O Understand existing situation
O Forecast likely / possible change
O Intended, deliberate, prescriptive model
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116. Analysing the main elements
of the environment
Environment
Resources
Purpose
Options
Options Choice
Options
5/14/2023 116

117. Analysing the strategic environment
The nine basic analytical tools
Company or
public sector
organisation
Environment
basics
Degree of
turbulence
PESTEL
analysis
Industry
life cycle
Key factors
for success
Five Forces
analysis
Four Links
analysis
Competitor
analysis
Customer
analysis
5/14/2023 117

118. Available tools/models
O The basics – market size, growth and share
O Environmental character – turbulence
O PESTEL
O Scenario planning
O Industry life cycle
O Key factors for success
O Five Forces Analysis
O Four Links Analysis
O Competitors
O Customer analysis 5/14/2023 118

119. The basics
O Market size
O How big is a big company going to be in this
industry?
O Growth
O Is it fast growing, maturing, declining?
O Are there one / several / many PLC’s here?
O What are the market shares of the key
competitors? Our market share?
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120. The basics (cont)
O For strategy:
O Often wider market or industry
O Can’t neglect the details
O Raises questions
O How many markets / segments do we / should
we compete in?
O How do the markets / segments connect?
O Does competing in one / some help us extend
into others?
5/14/2023 120

121. PESTEL analysis
O Political
O Economic
O Socio-cultural
O Technological
O Environmental
O Legal
5/14/2023 121

122. From environmental
to industry analysis
THE INDUSTRY
ENVIRONMENT
The
national/internat
ional economy
Technology
Government
and politics
Social
structure
Demographic
structure
The natural
environment
5/14/2023 122

123. The determinants of industry profit
O Consumer surplus and producer surplus
O Determinants to the firm profit:
- The value of the product to customers
- The intensity of competition
- The bargaining power of the producers relative
to their suppliers
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124. Analysing industry attractiveness
Porter’s Five Forces
5/14/2023 124

125. Applying industry analysis
• Forecasting industry profitability :
- How easy is it to enter the industry? (What are the
barriers?)
- How powerful are the suppliers and why?
- How powerful are the buyers and why?
- Are the substitutes a strong alternative?
- Are there many competitors? Is it easy to differentiate?
O Positioning the company
O Strategies to alter industry structure
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126. How do the forces interact on each
other? How do they affect
profitability?
5/14/2023 126

127. How do the forces interact on each
other? How do they affect
profitability?
5/14/2023 127

128. Create two future scenarios
Scenario one
What might
change the
forces?
How might they
change?
Scenario two
What might
change the
forces?
How might they
change?
How might these different
scenarios affect the industry
5/14/2023 128

129. Key issues in industry analysis
O Defining the industry
O Choosing an appropriate level of analysis
- Segmentation:
1. identify segmentation variables
2. construct a segmentation matrix
3. analyse segmentation attractiveness
4. identify key success factors in each segment
5. analyse the attraction of broad vs. narrow scope
5/14/2023 129

130. Key success factors
Analysis of demand
-Who are our customers?
-What do they want?
Analysis of competition
- What drives competition?
- What are the main dimensions
of competition?
-How intense is competition?
-How can we obtain a superior
competitive position?
What do customers want?
How does the firm survive
competition?
Prerequisite for Success
KEY SUCCESS FACTORS 5/14/2023 130

131. Discussion
Choose a specific company and:
- Make short introduction about this company.
- Analyse the main elements of environment of this
company by using PESTEL
5/14/2023 131

132. Strategic thinking
by Pham Hung Cuong
Chapter 5
Developing options
5/14/2023
132

133. Questions
1. What are common elements in successful
strategies?
2. What are the roles of resources and capabilities in
strategy formulation?
3. What is the link between resources, capabilities and
competitive advantage?
4. What are the features of cost leadership and
differentiation strategies?
5. How do you analyse resources and capability?
5/14/2023 133

134. Common elements
in successful strategies
Successful Strategy
Simple,
consistent, long-
term goals
Profound
understanding of
the competitive
environment
Objective
appraisal of
resources
Effective Implementation
5/14/2023 134

135. The role of resources and capabilities
in strategy formulation
O Basing strategy on resources and capabilities
(RBV)
THE FIRM
•Goals and values
•Resources and
capabilities
•Structure and systems
THE INDUSTRY
ENVIRONMENT
•Competitors
•Customers
•Suppliers
STRATEGY
The Environment-
Strategy Interface
The Firm-
Strategy Interface
5/14/2023 135

136. The link between resources,
capabilities and competitive advantage
RESOURCES
TANGIBLE
• Financial (cash,
securities,
borrowing capacity)
• Physical (plant
equipment, land,
mineral reserves)
INTANGIBLE
•Technology (patents,
copyrights, trade secrets)
• Reputation (brands,
relationships)
•Culture
HUMAN
• Skills/know-how
• Capacity for
communication
and collaboration
• Motivation
ORGANISATIONAL CAPABILITIES
STRATEGY
INDUSTRY KEY
SUCCESS FACTORS
COMPETITIVE
ADVANTAGE
5/14/2023 136

137. Identifying the organisation’s
capabilities
O Organisational capability, distinctive and core
competences
O Classifying capabilities
- Functional analysis
- Value chain analysis
O The nature of capabilities
- Process and routine
- Hierarchy of capabilities
5/14/2023 137

138. Function classification
of organisational capabilities
5/14/2023 138

139. Function classification
of organisational capabilities
Grant, R. and Jones, J. (2012) Foundations of Strategy , Wiley
5/14/2023 139

140. Value chain analysis
5/14/2023 140

141. Appraising the strategic importance
of resources and capabilities
5/14/2023 141

142. Resources and capability analysis
O Step 1: Identify the key resources and
capabilities
Step 2: Appraising resources and capabilities
- Assessing importance
- Assessing relative strengths
O Step 3: Developing strategy implications
- Exploiting key strengths
- Managing key weaknesses
5/14/2023 142

143. A framework for analysing resources
and capabilities
5/14/2023 143

144. The emergence
of competitive advantage
How does competitive
advantage emerge?
External sources of change e.g.:
•Changing customer demand
•Changing prices
•Technological change
Internal sources of
change
Resource
heterogeneity among
firms means different
impact
Some firms are faster
and more effective in
exploiting change
Some firms have
greater creative and
innovative capability
5/14/2023 144

145. Types of competitive advantage
– cost and differentiation
COMPETITVE
ADVANTAGE
COST ADVANTAGE
DIFFERENTIATION
ADVANTAGE
5/14/2023 145

146. Features of cost leadership and
differentiation strategies
5/14/2023 146

147. The drivers of cost advantage
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148. MIS that
supports fast
response
capabilities
Training to support
customer service
excellence
Unique product
futures. Fast new
product
development
Quality of
components
and materials
Defect-free
products.
Wide
variety
Fast
delivery.
Efficient
order
processing.
Building
brand
reputation
Customer technical
support. Consumer
credit. Availability of
spares.
Principal stages of value chain analysis
for differentiation advantage
5/14/2023 148

149. Porter’s generic strategies
COST
LEADERSHIP
DIFFERENTIATI
ON
FOCUS
Low cost Differentiation
SOURCES OF COMPETITITVE
ADVANTAGE
Industry-wide
Single segment
COMPETITIVE
SCOPE
5/14/2023 149

150. The strategy clock
(Bowman and Faulkner 1997)
5/14/2023 150

151. Discussion
Choose a specific company and:
- Make short introduction about this company.
- Analyse the link between resources, capability and
competitive advantage of this company
5/14/2023 151

152. Strategic thinking
by Pham Hung Cuong
Chapter 6
Evaluating options
5/14/2023
152

153. Questions
1. What are dynamics of industry structure?
2. What are stages of the life cycle?
3. What are strategies at different stages of the life
cycle?
4. What are the main bases of segmentation?
5. What is the evolution of industry structure
and competition over the life cycle?
5/14/2023 153

154. The dynamics of industry structure
5/14/2023 154

155. The dynamics of industry structure
Source: Based on Figure 2.4 in Hill and Jones (2008).
Source: Based on Figure 2.4 in Hill and Jones (2008).
5/14/2023 155

156. Strategy at different stages
of the life cycle
O The introduction phase – born global
companies, de novo entrants
O The growth phase – manufacturing capability
O The maturity phase – cost efficiency,
developing markets entry strategies
O The decline phase – capacity and output
5/14/2023 156

157. Evaluating options for growth
O PESTEL
O Strategic Groups
O Market Segments
O Blue Ocean Thinking
O Life Cycle Analysis
5/14/2023 157

158. Example of strategic group
5/14/2023 158

159. Market segments
5/14/2023 159

160. The evolution of industry structure
and competition over the life cycle
5/14/2023 160

161. Discussion
Choose a specific company and:
- Make short introduction about this company.
- Analyse strategies at different stages of the life cycle
of this company
5/14/2023 161

162. Strategic thinking
by Pham Hung Cuong
Chapter 7
Innovation and strategic thinking
in changing environment
5/14/2023
162

163. Questions
1. What are skills of strategic thinking?
2. What is the process of creativity?
3. What is the process of strategic thinking?
4. What is the innovation?
5. What is the creativity?
5/14/2023 163

164. Strategic thinking skills
O Your title makes you manager. People decide if
you are a leader.
O Five keys to being a great leader:
O Think strategically.
O Results oriented.
O Adapt and improve.
O Building strong teams.
O Inspire.
O Honesty & Integrity. 5/14/2023 164

165. Strategic thinking skills activities
O Permanent and rapid change of business environment and broad range
of information available Managers need a strategic mindset to
be successful leaders.
O Activities determining success:
O Think Strategically: Consider broad range of internal and external
factors when solving problems and making decisions with focus on
long term business perspective.
O Analyze Issues: Gather relevant information systematically, grasp
complexities and perceive relationships among problems to bring
clarity into issues solving.
O Use Sound Judgement: Make timely and sound decisions.
O Innovate: Encourage flexibility and creativity to generate new ideas
to challenge status quo.
5/14/2023 165

166. Think and act strategically motto
“Your time is limited, don’t waste it living someone else’s
life. Don’t be trapped by dogma, which is living the result
of other people’s thinking.”
Steve Jobs
5/14/2023 166

167. Think and act strategically
long-term focus
5/14/2023 167

168. Think and act strategically
developing strategic mindset
O Strategic planning is an event, while strategic thinking is a
process and an approach.
O Part 1: Developing a Strategic Mindset:
O Evaluating your strategic-thinking skills.
O Enhancing your strategic thinking.
O Recognizing the broad implications of issues.
O Developing a strategic perspective of your own area.
O Seeing the relationships.
O Analyzing factors outside the business.
5/14/2023 168

169. Think and act strategically
applying strategic thinking skills
O Successful leaders focus the energy of their organization on
the initiatives that will have the greatest strategic impact.
O Part 2: Applying strategic-thinking skills:
O Identify key strategic opportunities.
O Capitalizing on strategic opportunities.
O Developing strategic alliances to increase competitive
advantage.
5/14/2023 169

170. Innovation and creativity motto
“The best way to predict the future is to create it.”
Peter Drucker
5/14/2023 170

171. Innovation and creativity
5/14/2023 171

172. Innovation and creativity
5/14/2023 172

173. Innovation and creativity
innovation in business
O The ability to generate creative solutions is essential
in business to survive and success depends on how
quickly it can respond to a changing world.
O Creativity involves not only coming up with original
and innovative solutions, but also making existing
solutions better.
O Implement the innovative solutions quickly.
5/14/2023 173

174. Innovation and creativity
developing personal creativity
O Creativity is a process that requries personal commitment
and effort.
O Part 1: Developing personal creativity:
O Increasing your mental flexibility
O Determinig when to use creative thinking
O Approaching problems with curiosity and open-
mindedness
O Making use of existing information
O Generating innovative ideas and solutions
O Thinking positively when faced with obstacles
5/14/2023 174

175. Innovation and creativity
encouraging innovation in others
O Increasing the innovation of your people to improve the
quantity and quality of the creative ideas.
O Part 2: Encouraging innovation in others:
O Encouraging Innovation in your department
O Using logical and intuitive approaches
O Brainstorming
O Stimulating creative ideas in others
O Challenging “the way it has always been done”
5/14/2023 175

176. Discussion
Choose a specific company and:
- Make short introduction about this company.
- Analyse the process of the strategic thinking of this
company
5/14/2023 176

177. PROJECT
Choose a specific company:
 Introduce the company chosen
 Analyse key issues in industry
 Analyse the main elements of the environment
(PESTEL)
 Analyse the link between resources, capabilities and
competitive advantage
 Analyse features of this company’s strategy
REQUIREMENTS:
O Hard-copy and solf-copy
O 3500 – 4000 words
O Submit to teacher-in-charge by…
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