Strategic Management

Introduction

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 Presented By
Dr. Tanvir Mohammad Hayder Arif
An Academic, Trainer, and Talent Management Coach
Ph.D. (Entrepreneurial Finance), MBA & BBA (Finance, CU)
MSc. International Business Management (UK);
Professor of Strategic Management & Finance, Department of Banking & Insurance, University of Chittagong
Ex-Professor, Department of Finance, University of Chittagong
Ex-Assistant Professor, USTC; Ex-Lecturer AUB; Ex-Regional Head, NITOL-TATA Group
Associate Editor: International Journal of Management and Accounting, Universe PG Publications Group.

Received Professional Training on –

Sustainable Leadership, Communication & Intensive Interaction, Workplace Equality, and Diversity,
Talent Management (HRM, HRD), Project Management, Financial Management,
Professional Etiquette & Manner, Stress Management & More (Home & Abroad)

Trainer & Talent Management Coach of More than

10,000 Executives & Professionals (Since 2000) in the field of -
#Talent Management (HRM, HRD) #Communication & Intensive Interaction #Sustainable Leadership #Strategic Management &
Administration #Workplace Motivation & Stress Management #Career Planning & Development (CV/Resume) #Effective Interview
#Effective Public Speaking #Etiquette Masterclass #Professionalism and Ethics #Globalization & Dimensions of Economic
Development #International Business Management #Project Management #Financial Management #Many More..

An Academic & Trainer of

BIM, BIAM, BPDB, WDB, BPC, EDU, CIU, IIUC, CBIU, USTC, BGCTU,
UITS, CIMC, IBTRA, IBN-SINA, NGOs, and many more.

Founder & Coach: Talent Management Academy & Uddokta Forum

Email: [email protected] Mob. +8801715-174403

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WHAT DO WE MEAN BY STRATEGY?

◆ What is our present situation?

● Business environment and industry conditions
● Firm’s financial and competitive capabilities

◆ Where do we want to go from here?

● Creating a vision for the firm’s future direction
◆ How are we going to get there?
● Crafting an action plan for heading the firm in the
intended direction, staking out a market position,
attracting customers, achieving the targeted financial
and market performance, and getting the firm
where it wants to go is its strategy.

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WHAT IS STRATEGY ABOUT?

◆ Strategy is all about How:

● How to attract and please customers.
● How to compete against rivals.
● How to position the firm in the marketplace.
● How best to respond to changing economic
and market conditions.
● How to capitalize on attractive opportunities
to grow the business.
● How to achieve the firm’s performance targets.

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CORE CONCEPT

A company’s strategy is its action

plan for outperforming its competitors
and achieving superior profitability

Strategy is about competing differently

from rivals—doing what competitors
don’t do or, even better, doing what
they can’t do!

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WHY BOTHER WITH STRATEGY?

◆ A firm needs a strategy to specify what

actions are going to be taken:
● To improve its financial performance.
● To strengthen its competitive position.
● To gain a sustainable competitive advantage
over its market rivals.
◆ A creative, distinctive strategy:
● Helps produce above-average profits.
● Increases competitive pressures on rivals.

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STRATEGY AND COMPETITORS

◆ Strategy is about competing differently

from rivals—
● Doing what they don’t do or doing it better!
● Doing what they can’t do!
● Doing things in ways that attract customers
and set a firm apart from its rivals.
● Doing things in a manner calculated to
produce a competitive edge over rivals.

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FIGURE 1.1 Identifying a Company’s Strategy–What to Look For

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 McDonald’s Strategy in
the Quick-Service Restaurant Industry

Key initiatives of the Plan-to-Win strategy:

• Improved restaurant operations
• Affordable pricing
• Wide menu variety and beverage choices
• Convenience and expansion of dining opportunities
• Ongoing restaurant reinvestment and international
expansion

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 McDonald’s Strategy in
the Quick-Service Restaurant Industry

• Which of McDonald’s Plan-to-Win strategy

initiatives are associated with meeting customer
needs more effectively?
• Which initiatives are focused on more efficiently
delivering products and services?
• Which initiatives will likely result in the most
sustainable competitive advantage?
• Which of the initiatives will competitors likely
attempt to overcome first?

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 STRATEGY AND THE QUEST FOR
COMPETITIVE ADVANTAGE

◆ Competitive Advantage
● Require meeting customer needs either more
effectively (with products or services that customers
value more highly) or more efficiently (by providing
products or services at lower cost).
◆ Sustainable Competitive Advantage
● Requires giving buyers lasting reasons to prefer a
firm’s products or services over those of its
competitors.

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STRATEGIC APPROACH CHOICES

Building Competitive Advantage

Low-cost Differentiation Focus on Best-cost

provider on features market niche provider

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STRATEGIC APPROACHES

◆ Building a competitive advantage by:

● Striving to become the industry’s low-cost provider
(efficiency).
● Outcompeting rivals on differentiating features
(effectiveness).
● Offering the lowest (best) prices for differentiated
goods (best-cost provider).
● Focusing on better serving a niche market’s needs
(efficiency and\or effectiveness).

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CORE CONCEPT

♦ A firm achieves a competitive advantage

when it provides buyers with superior value
compared to rival sellers or offers the same
value at a lower cost to the firm.
♦ The firm achieves a sustainable competitive
advantage if its advantage persists despite the
best efforts of competitors to match or surpass
its advantage.

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 GAINING SUSTAINABLE
COMPETITIVE ADVANTAGE

◆ How to create a sustainable competitive

advantage:
● Develop valuable expertise and competitive
capabilities over the long-term that rivals cannot
readily copy, match or best.
● Put the constant quest for sustainable competitive
advantage at center stage in crafting your strategy.

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 WHY A COMPANY’S STRATEGY
EVOLVES OVER TIME

◆ Managers modify strategy in response to:

● Changing market conditions
● Advancing technology
● Fresh moves of competitors
● Shifting buyer needs
● Emerging market opportunities
● New ideas for improving the strategy

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STRATEGIC MANAGEMENT PRINCIPLE

♦ Changing circumstances and ongoing

management efforts to improve the strategy
cause a company’s strategy to evolve over
time—a condition that makes the task of
crafting strategy a work in progress, not a
one-time event.
♦ A company’s strategy is shaped partly by
management analysis and choice and partly
by the necessity of adapting and learning by
doing.

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THE EVOLVING NATURE
OF A FIRM’S STRATEGY
◆ Realized (current) strategy is a blend of:
● Proactive (deliberate) strategy elements that
include both continued and new initiatives.
● Reactive (emergent) strategy elements that are
required due to unanticipated competitive
developments and fresh market conditions.

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CORE CONCEPT

♦ A company’s deliberate strategy consists of

proactive strategy elements that are both
planned and realized as planned; its emergent
strategy consists of reactive strategy elements
that emerge as changing conditions warrant.

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THE RELATIONSHIP BETWEEN
A FIRM’S STRATEGY AND
ITS BUSINESS MODEL

Realized Business
Strategy $$$? Model
Competitive Value
Initiatives Proposition

Business
Profit Formula
Approaches

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A COMPANY’S STRATEGY
AND ITS BUSINESS MODEL
◆ How the business will make money :
● By providing customers with value.
❖ The firm’s customer value proposition
● By generating revenues sufficient to cover
costs and produce attractive profits.
❖ The firm’s profit formula

It takes a proven business model—one that

yields appealing profitability—to demonstrate
viability of a firm’s strategy.

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CORE CONCEPT

♦ A company’s business model sets forth the

logic for how its strategy will create value for
customers, while at the same time generate
revenues sufficient to cover costs and realize
a profit.

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BUSINESS MODEL ELEMENTS

◆ The Customer Value Proposition

● Satisfying buyer wants and needs at a price
customers will consider a good value.
❖ The greater the value provided (V) and the lower
the price (P), the more attractive the value
proposition is to customers.

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BUSINESS MODEL ELEMENTS (CONT’D)

◆ The Profit Formula

● Creating a cost structure that allows for
acceptable profits, given that pricing is tied
to the customer value proposition.
❖ V—the value provided to customers
❖ P—the price charged to customers
❖ C—the firm’s costs
● The lower the costs (C) for a given customer
value proposition (V–P), the greater the ability
of the business model to be a moneymaker.

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THINKING STRATEGICALLY

♦ The share price of Facebook stock has

disappointed its investors since its initial public
offering (IPO) in May of 2012.
● What external factors could be contributing to the
problem with the Facebook share price?
● How could the problem be explained in terms of
changes in the value, price, and cost factors
associated with Facebook’s business model?
● What must Facebook do now to create a business
model that is sustainable over the long term?

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 IS OUR STRATEGY A WINNER?

The Strategic
Fit Test

The Competitive Winning The Performance

Advantage Test Test
Strategy

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WHAT MAKES A STRATEGY A WINNER?

◆ A winning strategy must pass three tests:

● The Fit Test
❖ Does it exhibit dynamic fit with the external and
internal aspects of the firm’s overall situation?
● The Competitive Advantage Test
❖ Can it help the firm achieve a significant and
sustainable competitive advantage?
● The Performance Test
❖ Can it produce good performance as measured by
the firm’s profitability, financial and competitive
strengths, and market standing?

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 Sirius XM and Over-the-Air Broadcast Radio:
Two Contrasting Business Models

Who listens to the radio anymore?

• Given the changes in how people listen to music,
are the business models of Sirius XM and over-the-
air broadcasters viable over the long term?
• Does Sirius XM’s strategy pass the three tests of a
winning strategy? Does the strategy of over-the-air
broadcasters pass the same tests?
• What internal and external factors will create
difficulties for either competitor in changing its
strategy or business model?

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 WHY CRAFTING AND EXECUTING
STRATEGY ARE IMPORTANT TASKS

◆ Strategy provides:
● A prescription for doing business.
● A road map to competitive advantage.
● A game plan for pleasing customers.
● A formula for attaining long-term standout
marketplace performance.

Good Strategy + Good Strategy Execution =

Good Management

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STRATEGIC MANAGEMENT PRINCIPLE

♦ How well a company performs is directly

attributable to the caliber of its strategy and the
proficiency with which the strategy is executed.

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THINKING STRATEGICALLY

♦ Google’s web browser-based Chrome

operating system and its online applications
suite are now challenging Microsoft’s long-term
dominance of those marketplace sectors.
♦ What should be Microsoft’s first response to
this competitive challenge?
♦ How will Microsoft’s response to this
competitor’s actions affect its business model?
♦ Which competitor’s strategy will likely be the
eventual winner in the marketplace? Why?

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 Introduction

Presented By
Dr. Tanvir Mohammad Hayder Arif
PhD (Entrepreneurial Finance), MBA & BBA (Finance) (CU)
MSc. International Business Management (UK)
Training on Intensive Interaction and Communication (UK)
Associate Professor, Department of Finance, University of Chittagong
Ex-Assistant Professor, USTC; Ex-Lecturer AUB
Ex-Regional Head, NITOL-TATA Group
Trainer: BIAM, BIM, KPA, CTA, IBTRA, IBCF etc.
Founder and President: Green Society Bangladesh
Web: www.greensociety-tanvir.org
Page: https://web.facebook.com/GreenSocietyBangladesh
Group: Green Society Bangladesh
YouTube: Green Society Bangladesh And CU Family
Email: [email protected]
Mob. +8801715-174403

Presented by: Dr. Tanvir

32 Mohammad Hayder Arif,
[email protected]
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THE ROAD AHEAD
◆ Strategy is about asking the right questions:
● What must managers do, and do well, to make
a firm a winner in the marketplace?
◆ Strategy requires getting the right answers:
● Good strategic thinking and good management of
the strategy-making, strategy-executing process.
● First-rate capabilities and skills in crafting and
executing strategy are essential to managing
successfully.

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