1. Fall 2000MGTO321 (L1 & L2) -- Dr. JT Li1 Lecture 1: The Concept of Strategy The role of strategy in success. A framework for strategy analysis. Corporate strategy and business strategy.

2. Fall 2000MGTO321 (L1 & L2) -- Dr. JT Li2 Successful Strategy Long-term, simple and agreed objectives Profound understanding of the competitive environment Objective appraisal of resources Common Elements in Successful Strategy EFFECTIVE IMPLEMENTATION

3. Fall 2000MGTO321 (L1 & L2) -- Dr. JT Li3 Sun Tzu: The Art of War Know the other and know yourself: Triumph without peril. Know nature and know the situation: Triumph completely.

4. Fall 2000MGTO321 (L1 & L2) -- Dr. JT Li4 Elements of Success MADONNA GOALS Single-minded quest for stardom. UNDERSTANDING Identified emerging trends in popular culture. ENVIRONMENT Understood showbiz distribution channels. RESOURSE Recognized limited raw talent APPRAISAL Relied on strengths in - self-promotion - image-creation - relationship management IMPLEMENTATION Commitment to hard work Disciplined, inspirational leadership Attention to detail

5. Fall 2000MGTO321 (L1 & L2) -- Dr. JT Li5 The Basic Framework: Strategy, the Link between the Firm And its Environment THE FIRM Goals and Values Resources and Capabilities Structure and Systems THE INDUSTRY ENVIRONMENT Competitors Customers Suppliers STRATEGY

6. Fall 2000MGTO321 (L1 & L2) -- Dr. JT Li6 What is Strategy? Distinguishing strategy from tactics: –Strategy is the overall plan for deploying resources to establish a favorable position. –Tactic is a scheme for a specific maneuvre. Characteristics of strategic decisions: –Important. –Involve a significant commitment of resources. –Not easily reversible.

7. Fall 2000MGTO321 (L1 & L2) -- Dr. JT Li7 Sources of Superior Profitability RATE OF PROFIT ABOVE THE COMPETITIVE LEVEL How do we make money? INDUSTRY ATTRACTIVENESS Which industries should we be in? COMPETITIVE ADVANTAGE How should we compete? CORPORATE STRATEGY BUSINESS STRATEGY

8. Fall 2000MGTO321 (L1 & L2) -- Dr. JT Li8 How to compete Competitors Customers (value proposition) Industry chain (Degree of rivalry) Internal/external participants Strategic Games/Business Concept Where to compete Products Geographic markets Customers Channels

9. Fall 2000MGTO321 (L1 & L2) -- Dr. JT Li9 Levels of Strategy and Organization Structure Corporate Strategy Business Strategy Functional Strategies Corporate Head Office Division ADivision B R & D H R Finance Production Marketing/Sales R & D HR Finance Production Marketing/Sales

10. Fall 2000MGTO321 (L1 & L2) -- Dr. JT Li10 Strategy Making : Design or Process? Strategy as design Planning and rational choice INTENDED STRATEGY Many decision makers responding to multitude of external and internal forces REALIZED STRATEGY EMERGENT STRATEGY Strategy as process

11. Fall 2000MGTO321 (L1 & L2) -- Dr. JT Li11 Summary: Concept of Strategy Sustained performance is what strategy is all about. Each business should have a clear business concept: –where to compete –how to compete Firms have a multiple stakeholders / objectives –Always clear about your assumptions

12. Fall 2000MGTO321 (L1 & L2) -- Dr. JT Li12 Structure Of The Course The Concept of Strategy The firm's mission External Analysis Industry Analysis Internal Analysis Resource/ Sustainability Business-Level Strategies Low Cost & Differentiation Strategies Corporate-Level Strategies International Strategy Diversification and Scope of the firm Technology & Industry Evolution