Class 6

Strategic Tool II
611407 Strategic Management
King Mongkut’s University of Technology North Bangkok

Dr. Pard Teekasap

 Outline

 Comment on progress report

 Lecture on strategic tool II

 Strategy talk

 Term project progress presentation

 Next week discussion

 Comment on the report

 Key questions to deliver your strategy

o Where are we now?
o Where do we go?
o How to be there?

 Answer is not as important as how to get the answer

 Comment on the report

 Readers should understand everything from the writing.

Pictures just make it easier to understand

 Every analysis must have the conclusion. What can we do

strategically from the analysis?

 Strategy must relate to the analysis

Example strategy-SWOT mapping

Strategy 1 Strategy 2 Strategy 3

S1 X X
S2 X
W1 X X
W2 X
O1 X
O2 X
O3 X
T1 X
T2 X
 Strategic tool 2

 Resource-based strategy

 Competitive advantage

 Blue ocean strategy

Why external analysis is important?
Why internal analysis is important?
Willingness to pay and Supplier opportunity cost

 Harnischfeger and International Paper case

 Added value

 The value that would be lost to the world if the firm

disappear
 Competitive Advantage

“A firm with a wider wedge has a

competitive advantage in its
industry”
Differentiation and low-cost strategy
Activity analysis: Find ways to widen the wedge

Step 1: Catalog Activities

Step 2: Use Activities to Analyze Relative Costs

Step 3: Use Activities to Analyze Relative Willingness to Pay

Step 4: Explore Options and Make Choices

Step 1: Catalog Activities (Value Chain)
Step 2: Analyze Relative Costs
Step 3: Analyze Relative Willingness to Pay
 Step 4: Explore Options and Make Choices

 Consider what drives each competitor

 Consider competitors reaction

 Consider the value chain of suppliers and customers

 Consider the scope of operations

Only competitive advantage is not enough
Wide range of resource continuum
No single right solution
Don’t let resources block profit
Form strategies from the resources
Blue ocean strategy

Red ocean

VS

Blue ocean
 Differences between oceans
Red ocean strategy
Compete in existing market space
Beat the competition
Exploit existing demand
Make the value/cost trade-off
Align the whole system of a
company’s activities with its
strategic choice of differentiation or
low cost
Blue ocean strategy
Create uncontested market space
Make the competition irrelevant
Create and capture new demand
Break the value/cost trade-off
Align the whole system of a
company’s activities in pursuit of
differentiation and low cost
Strategy Talk
Term Project Progress Report
 Next week discussion

 Xbox case