CMGM 501
STRATEGIC MANAGEMENT
July 26 – August 15, 2012
Dr. Melike Mermercioğlu
What?
 In today’s challenging and complex global business
environment, the concept of “strategy” is becoming
more important than ever.
 This course is designed to be an introduction to
strategic management in a global environment.
 It is designed to familiarize students with the tools of
strategy analysis and the importance of competitive
advantage for thriving in an unpredictable global
environment.
Which?
 Strategy and Strategic Management
 Industry analysis: External
Environment
 Resources and capabilities: Internal
Environment
 Competitive Strategy
 Corporate Strategy
 Implementation of Strategy
How?
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Lectures
Articles and cases
Class discussions
Group assignments
Presentations
Guest speakers
Exam
Expectations from Students
 Preparation
✔
 Presence
✔
 Promptness
✔
 Participation
✔
 Plagiarism
✖
 Cheating
✖
Grading
Student Activity
Class attendance
Score
20
Participation in case discussions
Individual paper on cases*
Group project & in course assignments
Final examination
TOTAL
20
10
25 (20+5)
25
100
* Individual paper will be prepared on Astelit-life:), Cirque du Soleil and LVMH cases
Accessing the e-Reserve
Accessing the e-Reserve
Accessing the e-Reserve
Accessing the e-Reserve
Accessing the e-Reserve
Daily Schedule*
9:00 – 10:30
10:30 – 10:45
First session
First break
10:45 – 11:45
11:45 – 12:00
Second session
Second break
12:00 – 12:45
12:45 – 13:00
Third session
Wrap-up & reminders
* Except final examination and guest speaker days
Course Outline
Date
Subject
July 26
Introduction, concept of strategy
July 29
Definitions, Madonna case, Introduction to ADA model, SWOT
Analysis, PESTEL Analysis
July 30
Industry Analysis, Porter’s 5 Forces Analysis, Competitors
Analysis, Key Success Factors
July 31
Astelit case, Value Chain Analysis, Resource Based View of the
Firm, Core Competencies
August 1
Guest speaker, Introduction to Strategic Decisions
August 2
Competitive Strategy, Cirque du Soleil case
August 12
Corporate Strategy, LVMH case
August 13
Exam
August 14
Strategy application, Guest speaker
August 15
Strategy application, Group presentations
Group
Members
1
Fatih, Serhan, Bengisu, İdil, Gülüm, Cansu
2
Mert, Nazlı, Kübra G., başak, Hazel, Ezgi
3
Zeynep, Selin, Ayşan, Esra, Mustafa, Irmak G.
4
Deniz, Romi, Irmak K., Kübra K., Uğur, Elif
THE CONCEPT OF STRATEGY
A little bit of history…
Origins of Strategy
Examples of Strategy
“You ask, what is our aim?
I can answer in one word: It is
victory, victory at all costs,
victory in spite of all terror,
victory, however long and
hard the road may be."
“You ask, what is our policy?
It is to wage war, by sea, land
and air, with all our might and
with all the strength that God
can give us; to wage war
against a monstrous
tyranny...”
Examples of Strategy
“Armies, your first goal is the Mediterranean. Forward!”
Examples of Strategy
“Power is of two kinds. One
is obtained by the fear of
punishment and the other
by acts of love. Power
based on love is a
thousand times more
effective and permanent
then the one derived from
fear of punishment.
There are many causes
that I am prepared to die for
but no cause that I am
prepared to kill for.”
History of Strategy
 1911 – Frederick Taylor “The Principles of Scientific
Management”
 1937 – Ronald Coase “Why firms exist?”
 1938 - Chester Barnard’s “The Functions of the
Executive”
 1940’s – Joseph Schumpeter - the importance of
innovation
 1954 – Peter Drucker “The Practice of Management”
History of Strategy
 Till 1950s – Financial Planning
 1950’s & 1960’s – Corporate Planning
 1970’s – Strategic Management
 1980’s – Importance of sources of profitability
 1990’s – Internal resources
Strategy Techniques
 1960’s – SWOT analysis
 1970’s – BCG’s Portfolio analysis
 1980’s – Porter’s 5 forces
 1990’s – Grant’s “Resource based view of the firm”
Why do companies need a
Strategy?
What is the purpose of a firm?
 To earn money
 To generate profits
 To survive!
To Survive = To Be Different
Gause’s Principle
“No two species can coexist that make their
living in the identical way”
Prof. G. Gause, 1934
Gause’s Principle
 There is a need for diversity!
Meaning of Strategy
 Performing different activities
 Doing things in different ways
 Fulfilling different needs of customers
 Strategy = Being Different
Example
Meaning of Strategy
 Strategic positioning means
performing different
activities from rivals’ or
performing similar activities
in different ways
 Competitive strategy is about
being different. It means
deliberately choosing a
different set of activities to
deliver a unique mix of value
According to Porter
 Operational Effectiveness is not Strategy
 Strategy rests on Unique Activities
 A sustainable Strategic Position requires
trade-offs
 Fit drives competitive advantage and
sustainability
According to Porter
 Operational Effectiveness is not Strategy
 Strategy rests on Unique Activities
 A sustainable Strategic Position requires
trade-offs
 Fit drives competitive advantage and
sustainability
Example
Sold in end 2004 for 1.75 bn $
(IBM getting 1.25 bn $)
Operational Effectiveness
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Total Quality Management
Benchmarking
Time-based competition
Just in Time
Outsourcing
Continuous improvement
Empowerment
Reengineering
Change management
…..
According to Porter
 Operational Effectiveness is not Strategy
 Strategy rests on Unique Activities
 A sustainable Strategic Position requires
trade-offs
 Fit drives competitive advantage and
sustainability
Unique Activities
1. Variety based positioning
2. Needs based positioning
3. Access based positioning
Unique Activities
1. Variety based positioning
A subset of an industry’s
products or services
Unique Activities
1. Variety based positioning
2. Needs based positioning
All the needs of a particular
group of customers
Unique Activities
1. Variety based positioning
2. Needs based positioning
3. Access based positioning
Segmenting customers
according to accessibility
According to Porter
 Operational Effectiveness is not Strategy
 Strategy rests on Unique Activities
 A sustainable Strategic Position requires
trade-offs
 Fit drives competitive advantage and
sustainability
Example
According to Porter
 Operational Effectiveness is not Strategy
 Strategy rests on Unique Activities
 A sustainable Strategic Position requires
trade-offs
 Fit drives competitive advantage and
sustainability
Example
Example
Activity System - Ikea
Example
Short – haul, low cost, point to point service between
midsize cities and secondary airports in large cities
Example
Standard Airlines
Southwest
Fully equipped major airports
Midsize city airports or secondary
airports of big cities
Arrives at gate 30 min earlier
Fast turnaround at gates (15 min)
Serves meal
No meal served
Assigned seats
No assigned seats
Transfer baggage service
No interline baggage checking
Different sort of planes
Standard 737 aircrafts
Booking through agents
Limited use of agents
Business, first class option
Only economy class
Activity System - Southwest
Assignments
 Read cases:
 Madonna will be discussed on the 29th July
 Astelit life:) on the 31st of July
 Cirque du Soleil on the 2nd of August
 LVMH on the 12th of August
 Start preparing for the group project and let me
know the name of the company by the 31st of
July