Tutorial 2

Application on
Ch 1: Strategic Management Essentials “16th Edition”
Tutorial Outline:
• Review of KeyTerms;
 Relating Chess to Business
 Relating the Art of War to
Business
 What is strategic
Management?

The art and Science of

formulating, implementing, and
evaluating cross- functional
decisions that enable an
organisation to achieve it’s
goals and objectives.
What are the three key
terms in the
definition?

Art and science

Formulating,
implementing and
evaluating
Cross-functional
decisions
What is common between
Strategic Management &
Chess?
The game of chess is about war. Specifically, it is about protecting a prized
piece, and engaging in war with the opponent who wishes to defeat you.
There are differing strategies for both offensive and defensive play, and the
wise chess player will have experience with both.
Strategies

Chess requires careful planning, sense of direction, and the motivation to

act.
Vision &
Mission

The goal of chess is to protect the king, while trying to eliminate the other
player’s king. By trapping the king in a ‘checkmate’, the king is rendered
useless and the game is over.
Competitive
Advantage
 The successful chess player can foresee moves several turns ahead.

Long-term
Objectives
It is a reality of the game: the pieces are engaged in a war, and some pieces
will be lost. It is expected – after all, if no one ever took out their
opponent’s pieces, not much would happen on the game board.Through
poorly planned moves, better strategy by the opponent or a strategic
sacrifice, not all pieces will make it through the entire game. Defensive
Strategies

Players often forget that the entire board can be utilized in the
game, and concentrate on the central corridor of the board.
Looking for ways that the entire board can be used to engage with
the competition is crucial. Strengths &
Weaknesses
Disciplined players know that they have a limited amount of time to act, and
are prepared to make decisive moves.The inexperienced player will spend
their time thinking about potential moves and may waste their move, frozen
with indecision about which move is best.
Policies / Adapt to
Change

Chess is a game of strategy and skill.As a game between two players, face to
face, it is also a psychological game that involves knowing an opponent’s
body language, temperament andstrategy.
Opportunities
&Threats

There is a balance in chess between analysis and intuition. Even with

months and years of preparation and study, there is a human
element that cannot be foreseen.The player must have a keen sense
of intuition to not only predict what moves the competitor will
make, but to react appropriately, regardless of the move made.
Art & Science
• Based on the assumption of • Based on the assumption of
conflict …………
competition
•Business or military success is the product of both attention to
changing external and internal conditions and the
insightful adaptations to those conditions.
•Both business and military organizations must adapt to change
and continually improve to be successful.
•The element of surprise provides great competitive advantages
in both military and business strategy.
1. Win without fighting 1. Capture your market without
2. Know &understand yourself, destroying it
the enemy and terrain 2. SWOTAnalysis
Climate & Terrain
Environment [PESTEL]

The Army
Enemies (Company)& Target Land/Population
Competitors its Resources Market/Consumers
Why are business leaders obsessed
with the art of war?
Lesson 1 Assess the competitive marketplace

If you know yourenemy

and you know yourself,
you need not fear the
results of a hundred
battles
 Howis this principle applied in business?

Kodak’s missed opportunities in digital photography, atechnology that it

invented.This strategic failure wasthe direct causeof Kodak’s decades-
long decline as they did not have enough capital to produce the
technology
Lesson 2 Perform exceptional Service

Supreme excellence
consists in breaking the
enemy with no fighting
 Howis this principle applied in business?

In 2006, months before Walmart store opened in Chicago,researchers

counted 306 stores in the area.Two years after Walmart opened, 82 of
those businesses have closed.
Lesson Fake it till you make it

All war fare is based on

deception!
 Howis this principle applied in business?

When Snapchatrejected Facebook’s offer for the

company, Facebook made it seem like they were
inactive. Instead, they worked on a new version of
Instagram that contained many of the features found in
Snapchatandis often referred to asa“snapchatclone”
Lesson Planning Offensive

Attack by
Stratagem
 Howis this principle applied in business?

In a business environment, take an initiate and be the first to

innovate. Engage in a ---------- on your competitors with your
superior offering. pre-emptive “attack”

If you fail in doing that then ---------- assuming that you have
adequate resources to cover the market Surround them

If you have in sufficient resources then you have to take a ------------

approach by segmenting your markets. Divide and conquer

Surround them pre-emptive “attack” Divide and conquer

Price war Siege Mentality retreat
 Howis this principle applied in business?

In failing to do that, then your other option is to meet your

competitor by engaging in a -------- Price war

Failing to do that will force both the company and the competitor to
enter a state of ------------ Siege Mentality

Once you have failed in all the options then you should ----- or drop
out of the market Retreat

Surround them pre-emptive “attack” Divide and conquer

Price war Siege Mentality retreat
Lesson Be the first to occupy the strategic
competitive advantage

Whoever is first in the

field and awaits the
coming of the enemy, will
be fresh for the fight;
whoever is second in the
field and has to hasten to
battle will arrive
exhausted.
 Howis this principle applied in business?

Coke created Cola category, Pepsi occupied the second position. What
Red-Bull did? Red Bull created a new category — Energy drink and it
wasthe first brand to aconsumer’s mind.
Lesson

Waging War – The

challenge
 Howis this principle applied in business?

Focusing on the ------ of any plan and prevent over-extension of

your company’s resources Logistics

Maintaining organizational ------ andkeeping the “Troops”motivated

and well resourced Morale

Consider the wisdom of having effective -------- in place if

something does not work. Exit Strategies

Morale Exit Strategies Logistics

Lesson
The clever combatant sacrifices
something that enemy may snatch atit

Sacrifice is a form
of deceit. It is a skill
that, when highly
developed, can win
wars with little
fighting
 Howis this principle applied in business?

IKEAsacrificed customer service for low cost, sacrificed customization for modularity
— IKEAuses a self-service model. Customers need to do their own pickup and
delivery.They need to assemble the product on their own.

Neutrogena, the soap manufacturer, sacrificed traditional FMCG segment and

projected it asapremium “Medical” company.They sold their product initially in
pharmacies and through doctors.They advertised through medical journals.
Lesson
Strong vsWeak Points

Illusion vs Reality
 Howis this principle applied in business?

Take the -------- rather than play catch up – you may waste more
resources playing catch up than in taking entrepreneurial risks.
Initiative

Beawareof your Competition’s -------, expose them and hastento

do better in these areas quickly. Weak Points

Be aware of markets or territories where your Competitor has no

presence and ------ these gaps. Exploit

Exploit Weak Points Initiative

MovingTarget CompetitiveAdvantage Core competencies
 Howis this principle applied in business?

Be aware of ------------. Maximize your resources where you

possess natural barriers to entry.
CompetitiveAdvantage

Be a -------- and make it hard for your Competitors to guess your

next move.
MovingTarget
focus on your --------. If you have weak organizational flaws,
consolidate your resources in strengthening a few critical areas not
all of them at once. Core competencies

Exploit Weak Points Initiative

MovingTarget CompetitiveAdvantage Core competencies