Advanced topics in strategic management

1. Strategic Analysis
Chapter 3

2. Agenda
• Introduction
• External analysis
• Internal analysis
• How to compete

3. Introduction
Why we need to conduct strategic
analysis?

4. Introduction

5. Strategy
• A primary outcome of a good strategy is the creation of value .
• Economic value. Vs. ecological value
• How we can define value ? How we can decide which strategy brings the best
value?

6. The cognitive dilemma
• Managers are not always rational
• Leading organizations require a broader range of cognitive skills than ever before
• Brain elasticity can help develop effective leaders
• Strategic decisions can be influenced by cognitive biases which can include
overconfidence, self-interest, and being risk averse.

7. Big data
• Data-driven businesses now need new strategies to win customers, beat competitors
and enhance profits.
• Rapid advances in technology are further reshaping traditional business relationships
• Success is dependent upon the ability to make informed decisions and upon their
meaningful execution.
• Experts need to mine the data in order to create, interpret and capture sources of value

8. External environment
• The uncertain environment makes spotting new opportunities and anticipating
threats much more difficult.
• Red ocean vs. Blue ocean
• Why large companies ignore “blue oceans” ??

9. Macro-environment
• Unfortunately, external factors are uncontrollable
• Any strategic analysis should lead to a strategy that will leverage external shifts to
the firm’s advantage.
• The firm needs to be flexible enough to deal with these future impacts.

10. Micro-environment
• The micro-environment consists of firms and their suppliers and buyers. Also,
other actors such as the employees, media and shareholders are important
aspects of a firm’s micro environment.
• When performed well, analysis of the industry and market enables opportunities
to leverage core competencies in other industries and markets.

11. PESTEL analysis
• PESTEL can provide a comprehensive assessment of the environment and market
in which the firm operates.
• External factors can change over time
• PESTEL can be costly
• Factors need to be prioritized

12. Michael Porter’s Five Forces Model
• Intensity of rivals
• Threat of new entrants
• Buyer bargaining power
• Supplier power
• Threat of substitutes
• Complementors

13. Stakeholder analysis
• Stakeholder mapping matrix
provides the user with ways to
depict, understand and manage
stakeholder power

14. Stakeholder analysis
• Specific strategies can bring certain benefits to key stakeholder groups, enhanced levels
of communication and involvement

15. Scenario analysis
• The robustness of a strategic plan
can be improved by using a
variety of “what-if” analyses.

16. Scenario analysis
• To perform effective scenario analysis four steps can be employed:
1) identification of salient factors for inclusion in the scenario analysis;
2) identification of which scenarios to analyze for each factor;
3) estimation of asset cash flows; and
4) assignment of probabilities.

17. Customer analysis
• Customer analysis helps to develop existing products/services for existing and
new customers.
• Consumers change their minds, often faster than research methodologies
• What customer analysis should provide is insight, not just data.

18. Internal analysis
• Internal analysis is the process of identifying and evaluating resources,
capabilities and competencies that are available for strategy implementation
and for attaining strategic objectives

19. Internal analysis
• Organizational structure

20. Internal analysis
• Organizational culture

21. Internal analysis
• Organizational resources

22. Internal analysis
• Organizational resources

23. Internal analysis
• Value chain analysis

24. SWOT analysis
• A good SWOT analysis will critique the internal perspective (strengths and
weaknesses) and external (opportunities and threats) from the perspective of the
customer.
• The user is able to identify and address weaknesses, enhance strengths,
maximize opportunities, and overcome threats.

25. How to compete
• TOWS
• SPACE
• BCG
• ANSOFF
• Porter generic strategies