Session 1
Strategy as a “plan” - Intended vs. Emergent strategy
- Intended → plan as strategy
- Emergent → no clear plan (Honda) – a lot more important (flexibility, capacity), absorb all the changes coming from outside the company
Strategy as a “process” - Plan vs. Implementation
- Implementation is a very important part of strategy (leadership of top management is important regardless the strategy)
- Good strategy would not be as successful without good implementation
Why Do Some Firms Perform Better than Others?
- Industry profitability and Firm profitability differs between industries and firms
- External environment – demand,
- 18 salons within 850m street → competition is too much so there is oversupply
- Individual firm’s strategic choice → always ask why!
- Ikea → value added from shopping experience that Ikea provides
- Specific industry structure (not individual firm skills) that results in higher profitability
- For example: attractiveness of entering as CP and bottler are different, profitability in higher chain vs lower chain
Threat to New Entry: Low | Supplier Power: Low | Buyer Power: Low | Threat to Substitutes: Moderate | Intra-industry Rivalry: Moderate b/w the top companies, low when compared to the whole industry |
|
|
|
|
|
Session 2
- Internal Attribution → I am successful because of my resources and capabilities are higher than others
- External Attribution → I am not successful on my exam not because my resources and capabilities are lower than others, but because of the outside factors
Porter’s Five Forces
- Supplier and buyer power emphasizes on power dependency in the value chain
- Threat of entry and threat of substitutes emphasizes on competition
Cola Case
- CP are dumping all the price increase in materials to bottlers → exhibit 5
- Increase concentrate price while retail price decrease
What is the value chain? Who’s occupying the value chain? How are they making money (how’s their business model)? How is their power dependency relationship?