STRATEGIC MANAGEMENT

LECTURE 3

Industry analysis:
- Pestel
- Porter 5 forces framework

Strategy formulation:

 Detection of weak signal

 Competitor analysis:
- Competitive intelligence: helping forecast competitors’ future decisions
and strategies, predict reaction, predict it’s behaviour
- Framework for predicting rival’s behaviour, understand competitor: the
current strat, the financial and market goals, success factors, resources and
capabilities.
 Positioning strategy

 Segmentation focus on characteristics of the markets, strategic groups: strat of the

members of the firms, the competitors

ex: low cost airline companies

Porter’s generic strategies:

Advantage of strat:
- cost leadership
- differentiation

Pb of generic strat:
- already occupied by strong companies
- might be copied by rivals

 hypercompetition and the age of temporary advantage

- Porter: indus structure determines competitive behaviour + indus profitability:

indus structure change is rapid
- Schumpeter: indus structure is not stable
- R. d’Aveni: general feature of indus is hypercompetition and the age of
temporary advantage  for superior performance: continually recreating
competitive advantage, based on resource and know how

Hypercompetition: strat intent, company culture, flexibility, creativity, moves in the

ST, trial and error process, low invest involved
Ex: Telco, digital eco, information techno

// Stable indus: car indus, pharma

Resource based strat works:

- innovations
- indus frontiers blurred
- low barriers to entry
 - highly dynamic

 game theory: allows to model competitive interaction

- allow the framing of strategic decisions
- predicts the outcome of competitive situation
- identify optimal choices

5 aspects of strategic behaviour:

- cooperation: co opetition
- deterrence
- commitment
- changing the structure of the game (alliance, agreement)
- signalling

 help understand business situations, competitive interaction and structure