Strategic Management Notes PDF

Exam notes A company has a deliberate strategy and an opportunistic one. The opportunistic strategy comes unexpectedly and is not planned if you have a deliberate strategy you also always have a unrealised strategy. Strategy that you will miss out on...

Exam notes A company has a deliberate strategy and an opportunistic one. The opportunistic strategy comes unexpectedly and is not planned if you have a deliberate strategy you also always have a unrealised strategy. Strategy that you will miss out on because you are following another one. Strategic management means: meaningful positioning, defining a time span, and creating value for your customers as well as for your stakeholders. There are three types of strategic goals: Continuity goals = focused on long term survivability of your organisation social goals = the relationships within your organisation (people’s wellbeing etc.) Societal goals = the relationship between your organisation and the broader external world The strategic triangle There are three elements that effect your strategy. Those are: Steering elements - What do i want to do? Resources - What do I have? Environment - What should I do? trends? Opportunities? Hard information is quantifiable data, think of spreadsheets for example Soft information is what people say, think, feel etc. Managers tend to have the end in mind and fixate on that Entrepeneurs are more lookign at what they have and find different ends through that Exam notes 1  Managers are causal thinkers Entrepeneurs are effectual thinkers Vertical allignment in strategy means decisions made on different hierarichal levels support each other Horizontal allignment in strategy means decisions made in different depratments on the same hierarchical levels support each other APIC circle = analysis, planning, implementation, control 2 factors determine the profit potential of a company market attractiveness the degree to which a company can create a competitive advantage SBU = strategic business units What units is a business active in? A company can diversify in 4 different ways Horizontal diversification - create a new product that fits with your existing customers Vertical diversification - a product forward or backward in your activity chain Concentric diversification - Technology related product diversification (think of hyundai using their motors in different products) Conglomerate diversification - creating something completely new and unrelated to your current business Business synergy means that the combined businesses are more than the sum of them seperately. It is called the 2+2=5 effect. Exam notes 2  Strategic drift = a company is stuck in its old ways and strategy DESTEP = deomgraphic, economical, social, technological, environmental, political The product market matrix is a tool used for companies to see where potential opportunities in expanding are by looking at which services they can offer and to which markets. Porters 5 forces is a model that shows the market attractiveness of a market by looking at its internal competition, new entrant possibility, substitute posibility, supplier power and buyer power. Share of wallet = how important are you in a customers wallet? How much of their money goes to you? STP = segmentation, targeting, positioning Segementation means splitting up the market, this can be done in demographic, geographic, etc. Targeting means looking at your different market splits to see which ones you want to target Positioning means looking at your targets and giving yourself an as good as possible pposition through for example a good price/quality ratio A qualifier is in between a strenght and a weakness, it is basically a must for a company to perform. If all companies in your nieche have good cusotmer service then that is a qualifier to perform. The value chain Exam notes 3  Primary activities make up the core of your business and are at the bottom of the value chain. Logistics, marketing and sales, service Support activities are activitiesthat contribute to your primary activities like HR management, R&D and infrastructure A good SWOT has: outside perspectives on your strenghts and weaknesses, so not just from what you and your company think Are dug deep, not just a plain excercise but actual thought is put in A good concusion is given It is specific Goals are long term - 3-5 years Objectives are short term - 1 year In stable environments the long term can be longer in dynamic environments the terms can be shorter like in technology companies The ansoff matrix compares product and market if they are new or not. through this the strategy can be defined. To hvae a competitive advantage, a company has two options: cost leadership differentiation advantage A company is stuck in the middle when it doesn’t have either, this usually results in a failed business. Exam notes 4  There are three different value strategies: Operational excellenec - a good deal, best value for money (aldi is an example) Product leadership - higher price but worht the money, creative, innovative (apple) Customer intimacy - This is exactly what I need, tailored, custom A business model describes how a company creates, delivers, and captures value For a good strategy you need to: Set deadlines Make people feel responsible Clearly communicate with your team Make actionable and measurable goals Track KPI’s (no more than 4) Strategy map A strategy map has 4 different categories Financial Customers Internal processes Innovation and learning The first two are ‘What are we going for?’ The second two are ‘how are we going to get there?’ Financial = your revenue goals etc Exam notes 5  Customers = your value proposition Internal processes = Dependent on your value strategy Innovation and learning = employee skills, knowledge etc. Company culture A set of behaviours, values, reward systems and rituals that make up an organisation. Guiding belives are how the company wants to present itself, this is what you will hear in your sollicitation meeting etc. dailiy believes are the real believes, how it is day to day. A good company has these two aligned. There are 4 types of organisational structure clan oriented - family like, we do it together mindset Adhocracy oriented - focus on risk taking Market oriented - result driven Hierarchie oriented - controlled and structured Exam notes 6