Strategic Thinking in a Complex World Session 1 PDF

9/9/2024 ST310E - Strategic Thinking in a Complex World Session 1 Module Coordinator: Cilem Selin HAZIR (Ph.D) 2024-2025 Academic Year 1 Agenda 2...

9/9/2024 ST310E - Strategic Thinking in a Complex World Session 1 Module Coordinator: Cilem Selin HAZIR (Ph.D) 2024-2025 Academic Year 1 Agenda 2 1  9/9/2024 What is Strategy? - definitions “Strategy is a deliberate search for a plan of action that will develop a business’s competitive advantage.” Bruce Henderson, founder Boston Consulting Group “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.” Michael Porter, Harvard Business School “A company’s strategy is a set of actions that its managers take to outperform the company’s competitors and achieve superior profitability.” Textbook Thompson et al. 3 What is Strategy? - discussion Analogy 1: Chess Analogy 2: Warfare Source: An excerpt from The Queen’s Gambit Source: A battle scene from The Vikings Aim is to win, to defeat the other player. Aim is to win, to conquer, to beat the other army. A set of deliberate and integrated actions. A set of deliberate and integrated actions. Despite similarities, strategy is different than chess or warfare, but how? 4 2  9/9/2024 The Content of Strategy Strategy is all about How: How to position the firm in the marketplace How to attract customers How to compete against rivals How to achieve the firm’s performance targets How to capitalize on opportunities to grow the business How to respond to changing economic and market conditions Source: Thompson, A. A., Peteraf, M. A., Gamble, J. E., & Strickland, I. A. J. (2017). Crafting and Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases (21st international student edn.). New York, McGraw-Hill Inc.,US. © McGraw-Hill Education. 5 Strategic Actions Source: Thompson, A. A., Peteraf, M. A., Gamble, J. E., & Strickland, I. A. J. (2017). Crafting and Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases (21st international student edn.). New York, McGraw-Hill Inc.,US. 6 3  9/9/2024 The Aim of Strategy 7 Competitive Advantage - key terminology Competitive Superior performance relative to competitors or industry avg. advantage Sustainable competitive adv. Outperforming competitors over prolonged period of time Competitive Performance of two or more companies on the same level parity Competitive Underperforming relative to competitors or industry average disadvantage 8 4  9/9/2024 Competitive Advantage - key terminology 9 Competitive Advantage 10 5  9/9/2024 Competitive Advantage 11 Competitive Advantage Economic Value Created = Buyer’s willingness to pay – supplier’s opportunity cost The higher the economic value created, the higher the profit potential The higher the profit potential, the higher the competitive advantage 12 6  9/9/2024 Types of Competitive Advantage Increasing buyer’s willingness to pay without much increase in supplier’s opportunity cost, allowing the company to charge a premium price. 13 Types of Competitive Advantage Decreasing supplier’s opportunity cost without much decrease in the willingness to pay, allowing the company to offer lower prices. 14 7  9/9/2024 Types of Competitive Advantage Decreasing supplier’s opportunity cost and increasing the willingness to pay, simultaneously. 15 The 5 Generic Strategies Source: Thompson, A. A., Peteraf, M. A., Gamble, J. E., & Strickland, I. A. J. (2017). Crafting and Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases (21st international student edn.). New York, McGraw-Hill Inc.,US. © McGraw-Hill Education. 16 8  9/9/2024 Generic Strategies: Example 1 17 Generic Strategies: Example 2 Source: https://www.youtube.com/watch?v=JkwFNFhxHY8 18 9  9/9/2024 Generic Strategies: Example 3 19 Generic Strategies: Example 4 20 10  9/9/2024 Generic Strategies: Example 5 21 THANK YOU! 22 11