BUS 600-SP10, Day 9: Strategy

To Eric: Even though it seems that I did this for a Grade A, but actually I really like to utilize this opportunity to carefully study the material. I missed in the first place due to this or not. It's really fun to take your class.
Just finish the video, Interview with Michael E. Porter, he talked about the five forces in strategy which he invented thirty years ago. Michael use airline industry and soft drink industy to explain the five forces. He especially spend time to talk about competition, competition is not always be negative, it can be positive too. The main point is to make the market pie bigger, instead of making price war.
I liked this quote:
1. The seven S model: In the core, it's Superordinate Goals. And the six surrouding ones are Structure, Systems, Style, Staff, Skills and Strategy.
2. The value chain: backwardly integrated and forwarded integration, and vertical and horizontal integration.
3. Levels of Strategy: Functional Strategy, Business Strategy and Corporate Strategy.
4. Expansion Strategeis: The Ansoff Matrix use "PRODUCT" and MARKET" as two axis, and "OLD" and "NEW" as two catogory.
5. Industry Analysis: The Five-Forces: In the center, it's "Industry Competitors", and the four leafs are "Suppliers", "Buyers", "Substitues" and "Potential Entrants".
6. Generic Strategies: Cost Leadership, Differentiation and Focus
7. Competitive Tactics: Signaling is an interesting topics. As a consumer of Airline industry, I have more knowledge about how those company decide air fare price and the prive movement.
I am amazed by the "Prisoner's dilemma". This scenario seems a very old story about how those policeman bluff to criminals. I am surprised that this can be applied to business world. It's really an old saying "Business world is a war world".
8. Portfolio strategies:
A. BCG model use "Industry Growth" and "Relative Market Share" as two axis, each has "High" and "Low" as two category. So totally four cateogries are identified: STAR, CASH COW, Question Mark and DOG
B. McKinsey model use "Business Position" and "Industry Attractiveness" as two axis, each one has three levels: Low, Medium and High, so totally nine box in the charts, there are three kind of categories identified: I(nvest/Grow), S(electivity/Earnings) and H(arvest/Divest)
C. ADL model use "Competitive Position" and "Industry Maturity" as two factors, and one has 6 levels and the later one has 4 levels. Totally 24 boxes in the table. It use traffic light to describe a business as Green, Yellow and Red.
9. Other Strategies:
A. evaluate business's "core competencies".
B. Customer retention: It is more effective to retain good customers than to constantly churn new ones.
C. "Reengineering the Corporation".
D. Economic value added(EVA) or market value added(MVA).
10. Globalization and Strategy:
The pro and con of globalization
11. Synergy and Strategy:
I just learned this word "synergy", it means that the benefit of combining two business may be bigger than a simple sum of them. This mean there is "leakage" between the two business. There are four types of business linkages: Market linkages, Technological Linkages, Product Linkages and Intangible Linkages.
The author use a good example of Quaker Oats's acquasition of Snapple. There ae a lot of factors which need to be consider when merging two companies. Synergy is one of the main factor to merge two company.
12. Strategic Skepticism: The five P strategy: Plan, Ploy, Pattern, Process and Perspective.
13. Strategy and Chinese Warfare:
I am proud of the fact that Chinese military strategist Sun-tzu's book has been widely used by so many modern business strategy people. On the other hand, I also feel embarressed that's the Chinese about 3000 years ago, and modern Chinese don't have much contribution to modern business theory and also other scientific and social advance.
14. Strategic Implementation: With implentation, Strategy is a waste. We should use the strategy in our normal business operation.