2023/11/07
Postgraduate Diploma in
Project Management
Strategic Management
Prof Marnewick
Date: 30 October 2023
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Strategy: Introduction
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Porter’s Five Forces
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Threat of new entrants
Economies of
scale
Product
differentiation
Brand
identity/loyalty
Access to
distribution
channels
Capital
requirements
Access to latest
technology
Access to
necessary
inputs
Absolute cost
advantages
Experience and
learning effects
Government
policies
Switching costs
Expected
retaliation from
existing players
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Bargaining power of suppliers
Number of suppliers
Size of suppliers
Supplier
concentration
Availability of
substitutes for the
supplier’s products
Uniqueness of
supplier’s products
or services
(differentiation)
Switching cost for
supplier’s products
Supplier’s threat of
forward integration
Industry threat of
backward integration
Supplier’s
contribution to quality
or service of the
industry products
Importance of
volume to supplier
Total industry cost
contributed by
suppliers
Importance of the
industry to supplier’s
profit
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Bargaining power of buyers
Buyer volume
(number of
customers)
Size of each
buyer’s order
Buyer
concentration
Buyer’s ability
to substitute
Buyer’s
switching
costs
Buyer’s
information
availability
Buyer’s threat
of backward
integration
Industry threat
of forward
integration
Price
sensitivity
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Threat of substitute products or services
Number of
substitute
products
available
Perceived level
of product
differentiation
Buyer’s
propensity to
substitute
Relative price
performance of
substitutes
Switching costs
Substitute
producer’s
profitability &
aggressiveness
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Rivalry among existing competitors
Number of
competitors
Diversity of
competitors
Industry
concentration
and balance
Industry
growth
Industry life
cycle
Quality
differences
Product
differentiation
Brand
identity/loyalty
Switching
costs
Intermittent
overcapacity
Informational
complexity
Barriers to exit
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Organisational Levels
Vision
Corporate Strategy
Business Strategy
Functional Strategy
Strategy Execution
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Lego® Friends: Leveraging Competitive
Advantage
1. What are the traditional resources and capabilities of Lego?
2. What additional resources and capabilities were necessary to
transition into theme-based kits? How did Lego acquire or
develop these?
3. What do you think were the key decisions made by the new
CEO Knudstorp to make the company successful?
4. What are your predictions for the Lego Friends line? Has
Lego finally hit on the right formula to expand its market to
fully encompass girls?
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Business Model Canvas
• https://www.youtube.com/wat
ch?v=wlKPBaC0jA&list=PLBh9h0LWoawp
hbpUvC1DofjagNqG1Qdf3&ind
ex=2
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Business Model Canvas
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Business Model Canvas
GROUP EXERCISE
PRESENTATIONS
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Contemporary Organisation Structures
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Our methods are not keeping pace
Cultural transformation is seen as one of the biggest levers
for change
Change management is the name of the game for large
transformations
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The management challenge
If you can’t change the system, who can?
“It is not enough that
management commit
themselves to quality and
productivity, they must
know
what it is they must do.”
—W. Edwards Deming
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Culture eats strategy for breakfast
1. Corporate culture is the only
sustainable competitive
advantage. Develop a strong
corporate culture first and
foremost.
2. The real competitive
advantage in any business is
one word only, which is
“people”.
3. Anything that is measured and
watched, improves.
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Culture at Zappos
As we grow as a company,
it has become more and
more important to explicitly
define the core values from
which we develop our
culture, our brand, and our
business strategies.
These are the ten core
values that we live by:
Deliver WOW through
Service
Embrace and Drive Change
Create Fun and a Little
Weirdness
Be Adventurous, Creative,
and Open-Minded
Pursue Growth and
Learning
Build Open and Honest
Relationships with
Communication
Build a Positive Team and
Family Spirit
Do More with Less
Be Passionate and
Determined
Be Humble
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Culture at Zappos
HR Department
Tony Hsieh’s (CEO) desk
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Culture at Netflix
Entertainment, like friendship, is a
fundamental human need; it changes how we
feel and gives us common ground. Netflix is
better entertainment at lower cost and greater
scale than the world has ever seen. We want
to entertain everyone, and make the world
smile.
Like all great companies, we strive to hire the
best and we value integrity, excellence,
respect, and collaboration. What is special
about Netflix, though, is how much we:
• Encourage independent decision-making
by employees
• Share information openly, broadly, and
deliberately
• Are extraordinarily candid with each other
• Keep only our highly effective people
If you want to build a ship,
don’t drum up the people
to gather wood, divide the
work, and give orders.
Instead, teach them to yearn
for the vast and endless sea.
• Avoid rules
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Culture at Netflix
A great workplace is stunning colleagues
We are a team, not a family.
We’re like a pro sports team,
not a kid’s recreational team.
Netflix leaders
hire, develop and cut smartly,
So we have stars in every position.
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Culture at Amazon
Customer Obsession: Leaders start with
the customer and work backwards.
They work vigorously to earn and keep
customer trust. Although leaders pay
attention to competitors,
they obsess over customers.
Ownership: Leaders are owners. They
think long term and don’t sacrifice longterm value for short-term results. They
act on behalf of the entire company,
beyond just their own team. They never
say “that’s not my job."
Invent and Simplify: Leaders expect and
require innovation and invention from
their teams and always find ways to
simplify. They are externally aware, look
for new ideas from everywhere, and are
not limited by "not invented here." As we
do new things, we accept that we may
be misunderstood for long periods of
time.
Are Right, A Lot: Leaders are right a lot.
They have strong business judgment
and good instincts. They seek diverse
perspectives and work to disconfirm
their beliefs.
Hire and Develop the Best: Leaders
raise the performance bar with every
hire and promotion. They recognize
exceptional talent and willingly move
them throughout the
organization. Leaders develop leaders
and take seriously their role in coaching
others. We work on behalf of our people
to invent mechanisms for development
like Career Choice.
Insist on the Highest
Standards: Leaders have relentlessly
high standards — many people may
think these standards are unreasonably
high. Leaders are continually raising the
bar and driving their teams to deliver
high quality products, services, and
processes. Leaders ensure that defects
do not get sent down the line and that
problems are fixed so they stay fixed.
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Culture at Amazon
Think Big: Thinking small is a selffulfilling prophecy. Leaders create
and communicate a bold direction
that inspires results. They think
differently and look around corners for
ways to serve customers.
Bias for Action: Speed matters in
business. Many decisions and actions
are reversible and do not need
extensive study. We value calculated
risk taking.
Frugality: Accomplish more with less.
Constraints breed resourcefulness,
self-sufficiency and invention. There
are no extra points for growing
headcount, budget size, or fixed
expense.
Learn and Be Curious: Leaders are
never done learning and always seek
to improve themselves. They are
curious about new possibilities and
act to explore them.
Earn Trust: Leaders listen attentively,
speak candidly, and treat others
respectfully. They are vocally selfcritical, even when doing so is
awkward or embarrassing. Leaders
do not believe their or their team's
body odour smells of perfume. They
benchmark themselves and their
teams against the best.
Dive Deep: Leaders operate at all
levels, stay connected to the details,
audit frequently, and are sceptical
when metrics and anecdote differ. No
task is beneath them.
Have Backbone; Disagree and
Commit: Leaders are obligated to
respectfully challenge decisions when
they disagree, even when doing so is
uncomfortable or exhausting. Leaders
have conviction and are tenacious.
They do not compromise for the sake
of social cohesion. Once a decision is
determined, they commit wholly.
Deliver Results: Leaders focus on the
key inputs for their business and
deliver them with the right quality and
in a timely fashion. Despite setbacks,
they rise to the occasion and never
settle.
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How do I change culture?
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Questions
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