Very informative.

1. Strategic Management #1
Mr Mansoor Ahmed
Lecturer, Comsats Business School
e.mail: mansoorlse@yahoo.co.uk

2. Today
1. Practicalities
2. What is strategy?
– Pattern vs. Plan
3. Strategic vision
– The surface level
4. Strategic analysis
– Introduction & readings for the next
session

3. The basic information
• 16 sessions, 1.5 +1.5 hours each week
• Grading

4. Assessment
• 2 sessionals-(6 week, 12th week)
• 16th Week Revision Week
• Quizzes Based on
– Topics covered during the sessions
• Group Project Format
– It will test your Analytical , Problem Solving skills within the
real life organization context.
• Assignment-PLAGIRASM? Literature Review {Academic
Articles}
• Final Exam

5. Preparation for sessions
• Prepare by going through the pre-readings
• Articles (roughly one per session)
– Available online
– You need to browse the correct volume & issue for
a pdf copy of the articles–Google Scholar is a
good start
– Academic Journals and Newspapers.
AVOID PLAGERISAM!!!

6. Group Work/Project
Agree on a publicly listed US, UK ,Asian
firms or Case Study!
• Conduct strategic analyses
• Identify strategic problem(s)
• Recommend strategic actions

7. Group Project Format
• Condensed report (1200-1500 words)
– Try to analyze the firm from multiple angles and
include the most relevant findings
• A powerpoint presentation (~5 slides)
– Each group has max. 10 minutes to present

8. Group presentations
Your group must inform me as soon as
possible
• Four {?} groups will present in each slot
– 10 minutes presentation, up to 5 minutes questions
– We will discuss it further!!!
– I will keep you updated throughout the Semester.

9. Scheduling the group work
• You should begin early on, but allocate enough time
for the last week (between sessions 14 and # 15)
• Sessions #1-6 focus on strategic analysis
• Sessions #7-10 focus on strategic decisions
• Sessions #10-12 focus on implementation issues
• Session #13-15 integrates and revisits key issues
During Last Session, You will Present your Group work!

10. Text book
• Articles online–Google Scholar-Literature
Review
• If you are interested in obtaining a book, I
recommend the following:.
Johnson, Scholes, Whittington (2005). Exploring
Corporate Strategy, Text and cases, 7th ed.
Prentice Hall.

11. A rough course structure
Part 1: Internal and external strategic
analysis ()
Part 2: Organizational boundary decisions
and strategy process ()
Part 3: Summary and student
presentations

12. Today
1. Practicalities
2. What is strategy?
– Pattern vs. Plan
3. Strategic vision
– The surface level
4. Strategic analysis
– Introduction & readings for the next
session

13. WHAT IS STRATEGY?

14. Origins of Strategy
• Strategy originates from Greek (stratēgos),
roughly meaning ”leading an army”
• Even today, militaries recognize strategic and
tactical levels of planning
– ”Tactics win battles, strategy wins the war”
Military metaphors remain common in
business environment, but are actually
valuable?

15. Strategy vs. Tactics
• Tactics are the immediate means
(actions) used to attain a goal
• Strategy incorporates a selection of
tactics

16. The most commong definition
”A comprehensive long-term plan to
attain chosen goals.”
Often, management scholars and gurus define the
goal of strategy as ”beating the competition” or
”maximizing shareholder value”

17. Goals in Business Strategy
• In for-profit firms, strategic goals ultimately
facilitate some or all of the following:
– Growth
– Profitability
– Survival of the firm
– Shareholder value
• Goals depend on the type of the firm
– Technology startups vs. family businesses

18. Other approaches to strategy
• ”Strategy means that the top management
creates a future for the firm and takes
control of that future”
• ”Competitive strategy is about being
different. It means deliberately choosing a
different set of activities to deliver a unique
mix of value”
• Strategy is about archieving more optimal
fit with the firm’s environment

19. Strategy as a pattern
• A description of a firm’s key activities
– ”Apple’s strategy is to leverage its brand by creating
and marketing electronic appliances with great
usability and design”
– When a pattern creates profits in the current
environment it has ’environmental fit’
• Important: A firm’s present ’strategy’ not
always the result of a deliberate plan
– Result of accumulated choices over time

20. Pattern vs. Plan: Compatible?
• Think of the current strategy (as a pattern)
in the following firms?
– IKEA, Amazon.com, Apple, Vodaphone
• To what extent do you think these patterns
were planned?
• Do you think these patterns are reflected
in current ”strategic plans”?

21. Johnson, Scholes & Whittington book
Strategy is the direction and scope of an
organization over the long term, which
achieves advantage in a changing
environment though its configuration of
resources and competences with the aim of
fulfilling stakeholder expectation.
(Page 9, emphasis in the original)

22. My preferred approach to strategy
Firms’
Objectives
Strategy
Strategic
Analysis
Actions &
Structures
Strategy is an articulated and actionable
understanding of what the firm does and
should do to attain its objectives.

23. Example:
Strategic Intent of Comsats University
• To remain or be amongst the top tier of scientific, engineering and
management research and teaching institutions in the world.
• To develop our range of academic activities to meet the changing
needs of society industry and research.
• To continue to attract and develop the most able students and staff
worldwide.
• To establish our Comsats Business School as one of the leading
institutions in the world.
• To communicate widely the significance of science in general, and
the purpose and ultimate benefits of our activities in particular.
• At Comsats University, strategy is implemented on
departmental level following 16 more specific key objectives

24. Example:
Tesco!!!!.
• What are the strategic initiatives of
Tesco
• What do you think are it's objectives?
• Are the company in an equal position to
implement their strategy in the
U.S/Globally?

25. Implicit assumptions?
• A comprehensive long-term plan
• A future created by managers
• A distinctive set of activities

26. Explicit assumptions
• A comprehensive long-term plan
– Future is predictable, optimal plan can be deduced
by collecting enough information
• A future created by managers
– Future can be ’enacted’ by taking the initiative,
persistent managers can realize their visions
• A distinctive set of activities
– The optimal set of activities remains relatively
constant in the near future

27. Competitive strategy
• Should ”strategy” relate to competition?
– Or rather: when should it and why?
– What about Comsats University?
• ”Blue sea strategy”
– Focus on new markets with little or no competition
• ”Red seas”
– Markets with bloody ’hypercompetition’
Strategy is an articulated and actionable
understanding of what the firm does and
should do to attain its objectives.
Source: Kim, W.C. Mauborgne, R. (2005) Blue Ocean Strategy:
From Theory to Practice. California Management Review

28. Strategy as boundary-setting
• Specific attention on the course is devoted
on things a firm does not do
• How does not doing things create value?
• How can a firm avoid doing things?
Strategy is an articulated and actionable
understanding of what the firm does and
should do to attain its objectives.

29. Today
1. Practicalities
2. What is strategy?
– Pattern vs. Plan
3. Strategic vision
– The surface level
4. Strategic analysis
– Introduction & readings for the next
session

30. STRATEGIC VISION
The surface of business strategy

31. Why a strategic vision?
• Top management would like all parts of the
firm to act towards strategic goals
• Decision making tends to be distributed
– Why is this increasingly so?
• Vision directs decisions & actions on lower
levels of hierarchy
• Other benefits
– Leadership: motivation, identification with the firm
– External communication: shareholders, etc.

32. Example:
Vision/Mission Statements
Sony (based on shareholder meeting slides):
“Developing champion products with innovative
technologies to deliver a compelling
entertainment experience.“
“Key priority to revitalize electronics by changing the
organizational structure, reducing overheads,
refocusing product lines, reducing model count,
optimizing manufacturing, divesting non-strategic
assets”

33. Case Netflix (cf. Lovefilms.co.uk)

34. • http://www.youtube.com/watch?v=EkIDUB3SpPY&feature=related

35. Netflix Vision
(From investor material)
• Attention
directed to:
– Improving
web site and
service
– Increasing
subscriptions
– Online video
technology

36. Articulating a Strategic Vision
• Key goals of the organization
• Chosen means for attaining the goals
• Underlining activities or goals that are
unique to the specific company

37. To direct and unify activities in a firm,
strategic vision should be...?
• Widely known and understood within the
organization
• Relatively simple and stable
• Actionable (influence real decisions)
• Acceptable to firm’s stakeholders
– I.e. owners, employees, customers, government

38. Vision-- Potter's Value Chain
• Strategy must incorporate more detailed understanding
of different functional areas (tactics, if you will)
”Value chain” graph originally by Porter, 1977

39. Grand strategy: movie rental leadership

40. Consider the higher education industry
• What are the implicit assumptions regarding
the activities of Comsats College?
• How does our strategy differentiate us from
the other universities?
• How do some other universities differentiate
themselves?

41. Strategic intent of Comsats College
• To remain amongst the top tier of scientific, engineering and
medical research and teaching institutions in the world.
• To develop our range of academic activities to meet the
changing needs of society, industry and healthcare.
• To continue to attract and develop the most able students
and staff worldwide.
• To establish our Business School as one of the leading such
institutions in the world.
• To communicate widely the significance of science in
general, and the purpose and ultimate benefits of our
activities in particular.

42. Today
1. Practicalities
2. What is strategy?
– Pattern vs. Plan
3. Strategic vision
– The surface level of strategy
4. Strategic analysis
– Introduction & readings for the next
session

43. STRATEGIC ANALYSIS

44. Industry/market analysis
• Some goals:
– Determine the attractiveness of an industry/market
– Understand key drivers of competitiveness
– Understand current and likely competitors
– Understand customer behavior

45. Strategic analysis:
Five Forces Framework
Captures key threats for
the profitability of a
strategic positions
Most lucrative
businesses have many
weak suppliers, price-
insensitive buyers, low
competition, and low
threat of substitutes and
new entrants.
Competitors
Supplier
Bargaining
Power
Buyer
Bargaining
Power
Threat of
Substitutes
Threat of
New
Entrants

46. Tanaka launches M.Sc. in International Healthcare Mngmt:
Five Forces Framework
Use the Five Forces
framework. Analyze
attractiveness of the
market for M.Sc. in
international healthcare
management?
1. Existing competitors?
2. Likely entrants?
3. Suppliers?
4. Buyers?
5. Potential substitutes?
Competitors
Supplier
Bargaining
Power
Buyer
Bargaining
Power
Threat of
Substitutes
Threat of
New
Entrants

47. Environmental analysis
• Some goals:
– Understand how the environment hinders or helps
the firm reach its goals
– Underline potentially important changes in the
environment
– Enable firm to proactively fit its strategy to a
changing external context

48. PEST(EL) Framework
The Firm
Political Economic
Sociocultural
Technological
(Environmental) (Legal)
Changes in regulations,
taxation, government
subsidies, anti-thrust law
Consumer purchasing
power, material costs,
interest rates
Consumer preferences
and behavior, social
norms and expectations
All issues related to environmental
sustainability (partly political, etc.)
Outcomes of political environment: new
laws or court decisions influencing
demand/cost of products/services
New innovations that
enable new products or
help reduce costs

49. Airbus & PEST analysis
Regulations (noise, safety,
pollution, competition, etc.)
Taxation on greenhouse
gases
Price of oil
Economic growth (business
and leisure travel)
Interest rates
Fuel consumption
Entertainment systems
Safety
Demand for travel
Environmental issues
Growth of large cities
AIRBUS
P E
S
T

50. M. Sc. International Healthcare Management
M.Sc.
program
Political Economic
Sociocultural
Technological
Work out the potential relevant
changes in the external environment
Write here
Write here
Write here
Write here

51. SUMMARY

52. Strategy in Context
Objectives Strategy
Strategic
Analysis
Actions &
Structures
Five forces
PEST(EL)
And many others...
An understanding of
current activities +
further plans to
achieve objectives
What our organization
should be?
New processes,
policies, rewards, etc.

53. Summary of Key Points
• ’Strategy’ means two things:
– A plan of the actions to attain goals
– A pattern of activities the firm is currently undertaking
• Strategic vision
– A simplified statement of a firm’s strategy that helps
align decisions and activities across the firm
• Frameworks help analyze profit potential and
environmental changes
– Five forces & PEST covered so far – more to follow in
the next sessions

54. Next session !
Pre-readings:
1. Netflix Case
2. Porter’s 1996 article