Business Strategies and Game Theory

Strategy 1: The Concept of Strategy

• Session 1, Part 1 discusses the concept of strategy.
• The University of Vienna is offering a VO (lecture) course on Strategy 1.

Strategy 2: Organization Structure & Management Systems

• Session 1, Part 2 focuses on organization structure and management systems.

What is strategy?

• This session reviews what strategy is.
• Videos link to additional information (including discussion of successful entrepreneurs & royalty)

What about success?

• This session discusses elements of success.
• Examples include Sofia Vergara and Queen Elizabeth II.
• Questions about the contributing factors to success.

Key ingredients of a successful strategy

• Clear, consistent, and long-term goals
• Profound understanding of the competitive environment
• Objective appraisal of resources
• Effective implementation

Characteristics & Description

• Clear, consistent, and long-term goals - focused commitment to (career) goals
• Objective resource appraisal - deploying existing resources and drawing upon the resources of others
• Effective implementation - effectiveness as a (market) leader to show support for decisions
• Understanding the competitive environment - a deep and insightful appreciation of external environment when defining roles and career goals

From key ingredients to strategy analysis

• Key ingredients of successful strategy can be further classified.
• Strategy characteristics can be further categorized into elements and environment.

From key ingredients to strategy analysis

• Incompatibility with the external environment
• Market readiness
• Google Glass 2012 vs. Microsoft HoloLens 2022
• 10 years later...

The basic framework for strategy analysis

• Strategic fit between external and internal environment is key.
• The firm includes goals, resources, and systems
• The industry environment concerns competitors, customers, and suppliers.
• Inconsistent strategies may result in failure.
• Example: Alitalia vs. Ryanair, Wii vs. Playstation.

Understanding the external environment

• Examples of issues concerning customers or the external environment are shown through social media posts from Ryanair.

What is it that makes Ryanair successful?

• The operating income of Ryanair from 2012 to 2023 is presented graphically.

Understanding the internal environment

• Internal FIT (based on Porter's Activity System)
• How do the activities fit together to form a consistent, mutually reinforcing system?
• Example is Ryanair's strategy, showing how low operating costs, high aircraft utilization, no-frills offering, high labor productivity, etc. all interact.

The role of strategy analysis

• Strategy analysis improves decision processes.
• Strategy analysis assists with the identification and understanding of main issues.
• Strategy analysis helps to manage complexity.
• Strategy analysis can enhance flexibility and innovation by supporting the learning process.

Limitations to common tools of strategy analysis

• Strengths or weaknesses for Tesla
• Opportunity or Threat for the automobile industry?
• Details of Twitter's share price during Musk acquisition.

Limitations to common tools of strategy analysis - external shocks

• Disney's themeparks vs. streaming platforms.
• Disney+ races to 50 million subscribers.

The essence of strategies

• What do these “strategy statements” have in common?
• Be the low-cost provider
• Integrate a set of regional acquisitions
• Unrivaled customer service
• To always be the first mover
• (Specific goal) plan, method, or series of actions designed to achieve an effect

Where to find strategy

• Strategy begins in the thought processes of organizational leaders.
• For the entrepreneur, the starting point of strategy is the idea for a new business.
• In large companies, strategy formulation is an explicit management process.
• Most companies (especially public ones) value communication of their strategy to employees, customers, investors, and business partners.
• The mission statement describes the organizational purpose.
• The vision statement describes what the company wants to be.
• The strategy statement articulates the company's competitive game plan.

4 questions to challenge a strategy

• Where do we compete? - Markets, industries, regions
• What unique value do we bring? - Cost vs. differentiation
• What resources & capabilities do we utilize?- Human, tangible, intangible
• How do we sustain our unique value? - Barriers to imitation

The incorporation of strategy within the firm

• Corporate strategy - Key question: WHERE to compete? - Responsibility: Top management team
• Business strategy - Key question: HOW to compete? - Responsibility: Divisional management
• The scope of a firm's business has implications for the sources of competitive advantage.

Strategy as a descriptive tool

• Corporate and business strategy can be used to describe a business
• The answers to the questions WHERE to compete? and HOW to compete? tell us a lot about a company

Coca-Cola - basis for competitive advantage?

• Various images showing Coca-Cola advertisements & campaigns

Strategy as a descriptive tool (potential solution)

• Shows Coca-Cola's main elements and categories using a model.

Competing for the present, preparing for the future

• Strategy as Positioning - This concerns elements like product, geographical, & vertical scope of the company as well as their competitive advantage in those elements
• Strategy as Direction - This concerns the company's future as well as their goal setting
• Visualizes these two concepts alongside each other in relation to “present” and “future”
• Includes sections on how the company wants to be and what they want to achieve.

How is strategy made?

• Henry Mintzberg - intended, emergent, and realized strategies.
• Dwight D. Eisenhower quote.

Add-on The Eisenhower Matrix for task prioritization

• Presents an organization matrix for task prioritization based around urgency and importance.
• Categorizes tasks into Do, Decide, Delegate, and Delete.

Development of strategic plans

• Covers planning horizons of 2-5 years
• Summarizes specific actions to achieve performance goals
• Shifts focus from control to coordination.
• Sets priorities, milestones, resource commitments and financial projections.

Implementation of strategic plans

• Action (operating plan) for strategy implementation, broken down into short-term plans.
• Performance management for motivation and accountability.
• Resource allocation (capital budgeting) for major projects in business plans.

Next up: effective implementation - structures & systems

• Presents quotes from experts on structures and systems
• Shows an image relating to this topic

Follow up readings

• Indicates mandatory readings and optional readings based on topics covered in the slides.

Strategy - external growth strategies - Session 7 Part 1

• Covers session 7 part 1 with a visual representation of the topics covered

External Growth Strategies - Session 7 Part 2

• Covers session 7 part 2, presenting current trends in strategic management.

Current Trends/ Outlook for the future

• Provides a general outlook and analysis for the future

The new business environment

• Shows VUCA and BANI elements relating to the new business environment
• Presents overview of different business trends.

New directions in strategic thinking

• Strategic thinking in a digital world
• Discusses Business model innovation, more complex ecosystems like platforms, and new ways for doing business.

Redesigning organisations

• Relates complex business environments to broadening capabilities.
• Structures become more complex as the number of capabilities increases.
• Emphasizes the importance of informal organizations.

The changing role of managers

• Discusses new approaches to management and leadership in terms of decision making and leadership
• New approaches are highlighted in terms of leadership as well as management

Follow Up Readings Summary (Multiple Sessions)

• Indicates follow-up readings for various sessions (12, 13, 14, ...) based on topics covered throughout the material.

Test your knowledge on PESTLE analysis, the impact of climate change, and the fundamentals of game theory such as the prisoner's dilemma. This quiz covers key concepts and implications for industries like skiing and automotive. Challenge your understanding of these critical business strategies.