CANS 406 Lecture Notes - Lecture 2: Barnes & Noble, Procter & Gamble, Strategic Management
22 May 2018
School
Department
Course
Professor
Intro to Strategic Management and Writing Skills
Jan 11th
Key strategic questions:
• Where do we want to go ?
o External analysis
• How do we compete ?
o Resources : what a company has
• Tagile oey, other apital, HR…, or itagile reputatio…
o Capabilities: what a company is able to do
• Answer of those two questions : strategy formulation
o Leads to 3rd question
• Ex: Target
o Failure in Canadian market, but good retail store company in the US
o 2010:consideration of Canadian operations
o 2011-13 : leaseholds acquisition and partnership
o 2013-15 : years of operation
• First store in March 2013, was operating 133
o Loss of $2.1 billion
o Price was not as low as in the US, Canadian $ was weak
• No differentiation in products or prices
• Failed to build suppliers network
Deliberate vs emergent strategy
find more resources at oneclass.com
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• Two perspectives on strategy
o Strategy formulation and implementation
o Strategy formation and realization
Why is strategy important ?
• To position or set direction within environment
o Position vs trajectory
• To focus effort within the organization
• To define the organization, to give meaning to organization's activities
• To provide consistency
o For efficiency & focus
o Risk of too much consistency (D. Miller, Icarus Paradox, 1990)
• Blackberry-RIM : focus on government, industry customers
▪ Cell-phone business, not toy, so initially no camera or music, few apps
▪ Later realized need for apps, but by then: low market share, unattractive to app
developers compared to iOS or Android
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Competitive strategy (Porter, 1980)
• An effective competitive strategy takes offensive or defensive action to create a defendable
position against 5 competitive forces
o Identifying "attractive industry" through 5 forces model and analysis of mobility barriers
o Positioning the firm so that its capabilities provide defence
o Influencing the balance of forces through strategic moves to improve firm's relative positon
(offensive)
o Anticipating shifts in factors underlying forces before rivals
• First step: drawing industry boundaries
o Definitions
• Porter
▪ Structural analysis, by focusing broadly on competition beyond existing rivals,
should reduce need for debates on where to draw industry boundaries
• Any definition of industry is a choice of where to draw the line between
• established competitors and substitute products
• existing firms and potential entrances
• Existing firms and suppliers and buyers
• Drawing these lines in inherently matter of degree that has little to do
with choice of strategy
• Mintzberg
▪ Economists try to pin down industry boundaries (SIC codes)
• Strategists know that competitive advantage often comes from
reconceiving definition of an industry
• 3-M coating and bonding business
• Procter & Gamble personal care business
• IKEA knock-down furniture kits
• Apple iTunes vs music store
• Aazo vs Bares & Nole's, May's, Best Buy…)
find more resources at oneclass.com
find more resources at oneclass.com
