Lecture 1_Intro_Post - THINKING STRATEGICALLY: The Concept...

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THINKING STRATEGICALLY : The Concept of Strategy and the Pursuit of Competitive Advantage
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Thinking Strategically 2 What is Strategy? 1980’s View Operational effectiveness is performing business activities better than others -Many business consultants in the 1980’s
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Thinking Strategically 3 BCG Experience Curve for Semiconductor Firms Price per bit (millicents) Cumulated output (bits x 1012) Source: Integrated Circuit Engineering Corporation 1976 1977 1978 1979 1980 1981 1982 1983 1984 100 10 1.0 0.1 10 25 75 100 50
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Thinking Strategically 4 BCG’s Growth-Share Matrix ? High Share Low Share High Growth Slow Growth “Star” “Question Mark” “Cash Cow” “Dog”
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Thinking Strategically 5 The Industry Attractiveness- Business Strength Matrix Investment and Growth High High Low Low Medium Medium Selectivity Harvest/ Divest Harvest/ Divest Selectivity Selectivity Industry Attractiveness Business Strength Selective Growth Selective Growth Harvest/ Divest Harvest/ Divest Harvest/ Divest
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Thinking Strategically 6 What is Strategy? Positioning View Strategy is the attempt to achieve sustainable competitive advantage by creating distinction -Porter 1980 1. Creating a unique & valuable position by performing different activities 2. Making trade-offs ; choosing what not to do 3. Creating fit among these activities
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Thinking Strategically 7 3 Sources of Strategic Positioning Serve few needs of many Serve many needs of few Serve many needs of many A function of differences on the supply side: what product to provide
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Thinking Strategically 8 What is Strategy? Industrial-Organizational View Structure-Conduct-Performance Paradigm Industry S tructure dictates firm C onduct which determines firm P erformance Focuses on industry characteristics as the primary driver of performance GOAL: Locate in the most attractive industries
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Thinking Strategically 9 Above Normal Profits (in Excess of the Competitive Level) Avoid Competitors Be Better Than
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Lecture 1_Intro_Post - THINKING STRATEGICALLY: The Concept...

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