What is Strategy?
How to avoid competition
- Rumble in the Jungle 1974
- World Boxing championship
- Muhammad Ali and George Foreman
- Muhammad Ali banned bc of Vietnam War and Black Rights
- Muhammad Ali not in his peak performance
Float like a butterfly - Sting like a bee
& Muhammad Ali
Muhammad Ali’s Strategy was to tire George Foreman so much, that in the end he could defeat George Foreman. He was applying his strengths while protecting against his weaknesses. Based on this strategy he trained to support his strategy.
Strategies
Price Leadership
providing the same product for a much cheaper price USP: the cheapest option
Product Innovation
being the “original” or the first on the market USP: the first product or only product for some time
Quality Leadership
the brand or the quality of the product is unique enough to create value USP: best product / provides most value
Niche Leadership
such a “small” market that nobody else wants to participate USP: only product available
Market Barriers
Market-Based View
- from Michael Porter (Harvard)
- product oriented
- Competitive Advantage
- choose an attractive market
- establish Market Barriers → me no like competition
- Multiple brands for multiple markets
- Volkswagen
- normal Golf → low price
- Lamborghini → brand
- Porsche → quality
Resource-Based View
- from Edith Penrose
- factor oriented
- competitive edge being unique access to resources
- they need to be VRIO Resources
- what about basic resources?
- Apples → every apple is mostly the same
- Organic Farming
- Special Breeds (maybe old/forgotten breeds)
- Special Marketing (CO2-free Apples)
- Apples → every apple is mostly the same
Personal Career Strategy
University is not about what you get taught. It’s about what you learn about yourself.
- personal Strengths and Weaknesses → Resource-Based View
- what am I good at?
- what can I improve?
- personal Opportunities and Threats → Market-Based View
- what is demanded on the job market?
- what is an attractive job market for me?
Travel, do internships, talk with people, find out what people need/want.
Focus on your strengths, don’t worry about your weaknesses.
do a SWOT Analysis on yourself
Accounting Perspective
BCG Portfolio focuses on cash flow
- excess cash flows
- invest into innovation
- return to shareholders
- uncontrolled use of finance by managers
- pecking order model of finance
- internal capital vs external capital
- internal capital can be used in ANY way
- for external capital to be used one needs to ask the investors
- finance and innovation
- highly innovative ideas funded by equity/debt/internal sources