2. What is strategy?
• Set of coordinated actions (plan) designed for achieving a goal
• Hambrick and Fredrickson (2001) provide a framework for defining
strategy consisting of five dimensions- Arena, Vehicle, Differentiator,
Staging, and Economic Gains
3. Strategy at different levels of an organization
• Top-level (Corporate strategy)
• Middle-level (Business strategy)
• Lower-level (Functional strategy)
4. What do you understand by the term
strategic?
• Decisions taken in an organization are classified into four types,
depending upon the scope and commitment involved
❑ Strategic
❑ Tactical
❑ Neo-Strategic
❑ Operational
5. Strategic management process
• Vision and Mission
• Defining objectives
• Internal and external analysis
• Strategy formulation
• Strategy implementation
• Strategy control
6. Vision and mission
• Vision- concerned with what the company wants to be in the future,
its reason for existence
❑ Core values
❑ Core purpose
❑ Envisioned future
• Mission- concerned with the products and customers a company
wants to focus on
7. External environment
• The macro-environment (generic) is generally analyzed using PESTLE
(Political, Economic, Social, Technological, Legal and Ecological)
• The micro-environment (industry) is generally analyzed using Porter’s
five (sometimes six, depending upon the context) forces. Collectively
these forces determine the attractiveness of an industry.
8. Understanding the impact of five forces
• Understanding what makes them strong?
• How to counter specific strong forces?
• What to do when multiple forces are active?
• Implications for
❑ For profitability
❑ For industry attractiveness
• When can the two strategies be pursued?
9. Internal analysis
• A firm must understand the resources (atomic factors that are in
possession) and the capabilities at its disposal (actions that a firm
performs)
• Combination of resources gives rise to capabilities
• A firm’s capabilities may just remain that or move ahead to become a
competence/core competence/distinctive competence
• VRIO framework can be utilized to understand the source of
competitive advantage for a firm
10. VRIO Framework
Valuable? Rare? Inimitable? Organizational
exploitation?
Result
Resource/Capability 1 No No No No Competitive
Disadvantage
Resource/Capability 2 Yes No No No Competitive Parity
Resource/Capability 3 Yes Yes No No Temporary
Competitive
Advantage
Resource/Capability 4 Yes Yes Yes No Temporary
Competitive
Advantage
Resource/Capability 4 Yes Yes Yes Yes Sustained
Competitive
Advantage
11. SWOT/TOWS
• SWOT analysis provides an overview of a firm’s overall environment
using the strengths, weaknesses (both internal components),
opportunities, threats (both external components).
• TOWS intends to build upon the SWOT analysis by combining the
internal and external dimensions (SO, ST, WO, WT being the primary
strategies)
12. Value-chain analysis
• Included all activities performed by a firm from start till the end
(entire lifetime of a product)
• Activities can be classified into two types – primary (main activities
that add value) and secondary (those that support primary activities
in adding value)
13. Value-chain analysis
• Actions should be undertaken across value-chain activities (primary)
to achieve the relevant strategy chosen by a firm (low-
cost/differentiation)
• Requires syncing of all activities for a common purpose (e.g. lowering
costs as much as possible across all primary activities)
14. Blue-ocean strategy
• While competitive strategy mentions that a value/cost tradeoff exists,
blue-ocean strategy asserts that the tradeoff can be broken
• All about creating groups of non-customers, while combining lower
costs and greater buyer value
15. How to implement blue-ocean strategy
• ERRC Grid
• Strategy canvas
16. Corporate-level strategy
• Concerned primarily with the entire organization
• Specifically, it deals with arenas (products and markets)/vehicles
(options to be taken to enter into arenas)
23. References
• David, F., & David, F. R. (2016). Strategic management: A competitive
advantage approach, concepts and cases. Pearson–Prentice Hall.
• Hambrick, D. C., & Fredrickson, J. W. (2005). Are you sure you have a
strategy?. Academy of Management Perspectives, 19(4), 51-62.
• Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2019). Strategic
management: Concepts and cases: Competitiveness and globalization.
Cengage Learning.
• Kim, W. C. (2005). Blue ocean strategy: from theory to practice.
California Management Review, 47(3), 105-121.
