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Strategy fundamentals IS 7010 William A. Sodeman, Ph.D.

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Presentation on theme: "Strategy fundamentals IS 7010 William A. Sodeman, Ph.D."— Presentation transcript:

1 Strategy fundamentals IS 7010 William A. Sodeman, Ph.D.


3 What is strategy? Developing unique core activities that fit with other activities in the SBU or firm Create sustainable growth in the firm Rivals will imitate these activities as costs decrease, and if they have time Competitive advantages for a single company become key success factors (KSFs) for the entire industry

4 What isnt strategy? Effectiveness is not strategy –Doing the right thing doesnt guarantee success, but it does help improve your chances Imitating your rivals leads to stagnation –Competitive convergence –Acquisition of rivals when youre out of ideas Failing to choose a strategy is a choice The desire to grow is a trap

5 Inference An intellectual process in which conclusions are derived from observed facts or from other ideas Just the facts, maam. (Well draw our own inferences.)

6 Induction-deduction Elementary, my Dear Watson! 1.Observation of data 2.Induction or inference regarding unobservable data 3.Prediction through deduction

7 The X-Files Dana Sculley and Fox Mulder use deduction and induction Sculley relies more on scientific evidence –Direct observations like autopsy and physical evidence Mulder is more likely to suspend disbelief –Events that cannot easily be described or measured

8 Why study cases? Provides a single set of materials for analysis and discussion A text-based snapshot of a managerial situation Primary, archival and secondary data are provided Multiple solutions are possible… but some solutions are better than others

9 Planning and implementation STRATEGY CLEARUNCLEAR Imple- ment- ation EffectiveSUCCESSMAYBE IneffectiveMAYBEFAILURE

10 P (company) vs. E (external environment PS STRATEGIC ACTIONS RULE- ABIDING RULE-BREAKING E and e Rule- abiding Limited change P-controlled change Rule- breaking P-independent change Runaway change

11 Limited change Linear Stable Mutual adaptation Running hard to stay in place Over time, strategic inertia sets in and reinforces the constraints

12 P-independent change Nonlinear Disruptive Rule breaking by others leads to 10x (major) changes in E and P Sometimes these changes emerge from e e may become a complementor

13 P-controlled change Nonlinear Complex Rule breaking by P leads to 10x (major) changes in E Planned changes are easier to control, but difficult to arrange Unplanned changes might work if E waits to act

14 Runaway change Nonlinear Chaotic Rule breaking by P and E leads to 10x (major) changes in industry structure e may also be involved and changed The perfect storm The only sure prediction is destruction

15 Porters five forces Competitive rivalry among the firms in the industry Threat of new entrants Threat of substitutes Power of buyers Power of suppliers





20 Groves NINE forces model Competitive rivalry among the firms in the industry Threat of new entrants Threat of substitutes Power of customers Power of suppliers POWER OF CHANNELS POWER OF COMPLEMENTORS REGULATORY CHANGE TECHNOLOGICAL CHANGE

21 Value chain

22 Porter & Millar (1985, p. 4)

23 Reading the case Read the case at least twice Most of the information you need for analysis is already in the case and assigned readings Dont do extra research on the company or industry No need to check what the company actually did – it was usually the wrong decision anyway

24 Reading the cases If two or more cases are assigned together, those cases are probably related Situation and follow-up Competitors Complementors Other similarities

25 Writing the case notes Always write a separate sheet or document of notes while reading a case Highlighting the book is only a start Use the notes to start lists of analysis inputs

26 What are your assumptions? Make clear notes to yourself about your assumptions regarding the case There is always information that is missing from the case

27 Case analysis Restrict your analysis to the actual time of the case (casetime) Dont propose solutions that are unavailable or illogical –E-commerce in the early 1990s –Expensive plans when the company is facing bankruptcy –Entering a completely new area of business

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