Boing outsourced most of your work their production whereas

Those countries took the know how and there is potential, you might think of producing

Vison and mission

External factors
Internal factors

Vison where you want to go, vision might go differently

CEO who has vision can lead enterprise to success

Know the Mission in order to develop the right strategy, if import and distribute
OTUS elevators is to move people

McDonalds mission to offer a value meal in a clean restaurant without delay and complete customer
satisfaction
Develop a strategy is to develop a competitive advantage, to create an economic value
To create an overall better performance measured by the economic value creation and value to
shareholders or stakeholders, employees, allowing the firm to offer more value.
Cost less than the value you are giving, it’s important : economic value creation

Value minus the cost.

Cost effective strategy and differentiator strategy

Low cost strategy, the bic is a family European business
Wallmart
Differentiator strategy such as organic food

Direct competitors or other competitors

A substitute can exercise competition
An outsourced such as Huawei to Leica
From Paris to London

Barrier to enter the market such as financing to get in the banking industry
The power is high on your business or no
Power of supplier, if can easily switch brand this power is low
Power distribution,
Direct competitors, ( competitive firms )
Substitute of your product and
Barrier to enter: if you want to enter the industry you need for example big financing

Michael porter five forces

An industry is attractive for example food retail, clothing industry,,
When it is profitable
Start with external environment then narrow our industry environment study, to understand what are the
characteristics of our industry for example food industry different than luxury
Detail sensitive industry or price sensitive industry
So that to develop the right strategy following the 5 Michael pros
If we sell Mcdonals 80% of his meat but strategically speaking, if they decide not to take our meat,
Strategic thinking requires me to widen my customer base , to extend on my customer base
Anything that will threaten my business, I need to develop strategy how to stay in the business
We need to think about sustainability
Gillette stay ahead of competitions
Business level strategy to build a competitive advantage to compete on its market but once we need to
sustain this competitive advantage through corporate level strategy
A competitive advantage is having an advantage that rival don’t have.
Low cost strategy for example, wallmart , a competitive advantage is relying to others
If Value-cost is larger than V-C of competitor it means a competitive advantage
If V-C is lower that other we cannot create competitive advantage meaning it
If V-C = V-C meaning both companies are at competitive parities

VRIO framework : valuable, rare, costly to imitate, non substitutable.

The mission flows from the vision, the mission provides directions.
Mission of McDonalds is a complete customer satisfication

Stakeholders are all who have interest with the firm : community, government, municipality

Shareholders are the main stakeholders because they put their money in it
Priority of shareholder higher than stakeholder but need to be inline otherwise they will close your
business.

Strategy is all about focus

Focus on my market, not intend to sell everything to anyone randomly

Vison, mission and values for the sustainability of the business

Globalization change in cars we need to focus on Chinese cars

Landwind, Borgwird

If they can develop competitive advantages they can earn above average returns.

The value system is and organizational capital as well.

When you do a strategic move, you need to control it

Circles close to the other, serving same segment of industry and really competing
Strategic group mapping, when you map a large business, you would map with a larger circle if he has
larger sales.
Timing in strategy is very important
Don’t underestimate the first mover in the industry
Sometimes followers can really bypass the first mover
In this duopoly they have it ready and they want it
Sometimes the marketing and it’s informative, it can be a competitive advantage
You need to analyze your industry environment for example where you can find the nail polish in
supermarket or in hair dresser
Demographic, for example in Europe the problem is the aging population
When the industry is profitable then the industry is attractive
When you are in the industry you can be an observer
Interest rate : you cannot sell a product below its cost
The more the competition you have the more the consumer can benefits

Scanning the outside environment

Monitoring the outside environment
Forecast the outside environment
Assess the outside environment based on your company’s
Economies of scale meaning if companies buy huge quantities
Switching cost if you are using Nespresso rather than investing on a new machine
Eurostar and train between Paris and London is a substitute.
I am able to compete in this industry then it’s attractive
Intensity of competition is between high end clothes which are same strategic group such as Aishhti and
Versace
The more similar the strategy the more the rivalry

External environment: opportunities and threats

Internal environment:
Core competencies of google is the know-how
If you are creating your own brand the power of supplier is diminished
If you build your network it will be hard for others to steal it if you do it in a smart way
Depends it which industry and what youa re doing, it specify the value chain, which raw materials you
need, depends on the main activitiy
I should rely on my core business and primary activities to develop competitive advantage
Business anomaly, Toyota car at a price lower than the GM cars, integrity
Business is a cycle, the cycle of GM has passed
Crowd funding
En amont is getting the feedback of the market then go for manufacturing
The PESTEL framework take into consideration certain factors but not all the factors

Strategic management process,mission vision and values

External environment
Internal environment of the company and the potential
Alternative strategies : niche , differentiator
Integration strategy : low cost but with differentiation

Then implementation then control make sure the strategy is working right all what we put in place
Just in time system showing how sales are going such as zara
Coopetition – cooporating with competition by using complementary products
Innovation in the process, in the business model not only in the product such as AirBnb, Uber.

Building and sustaining a competitive advantage , our thinking should be focused there at the heart
And afterwards came the strategy
Out of the millions of innovations, only few of them go into products.
Today most of the studies talk about the Open innovation principles, not anymore about closed
innovation principles.
Any process or cycle done in management, the last factor in it is control you need to be close to your
customer., hear his voice.
Product lifecycle is getting very short., when Tapping into external expert communities it means you can
accommodate with the new technologies such as data analytics., vitamin E in shampoo

Business level strategy you need to develop a competitive advantage

Corporate level strategy
When we develop a business level strategy, we need to focus on the customer we want to serve, and
then we do customer segmentation
You define who are you direct competitors and then you take segment of this fast food industry.
Integration strategy zara, Toyota, IKEA
Focused differentiation, such as Rolex, Ferrari narrow target
Focused cost leadership ,
Apple is a differentiation
Zaatar in Canada is a focused cost for Lebanese in Canada
BIC is a cost leadership
Zara and IKEA are in the center in the integrated cost leadership/differentiation

Very difficult to maintain a cost leadership strategy for the long term, usually it happens at the beginning
to breakthrough.
You go with acceptable quality because the risk is that you loose your market

Risk of acceptable cost is rivals can imitate your product

Loose scope of your focus group, changing need that you lose for the focus group this is the risk of focus
strategies
The risk of integrated is you might fall in the middle you are neither a differentiator nor a cost

Economic of scope is different to economic of scale like starbucks using tea

Economic of scale is when a company double the unit of outputs, the unit cost goes down, the more
output you have, you lower the cost.If you rent something , the rent of a fixed cost, the variable is the
materials., the more you produce, those fixed cost gonna be divided over big quantity and unit cost will
be less

The larger the number of outputs the lower the unit cost
Economy of scope is using the resources optimely and efficiently in order to decrease the unit cost

Focus on your customer, you want to give them they value they want to see and the product they want to
see
Focus on the segment we want in good matter

Companies goes into related diversification to meet strategic fit

KFC, tacobell, pizza hut, you would always pepsi cola drink because they all originated from pepsi co

They should develop a major brand alone

IKEA have a shopping strategy ( playground for the kids ) in addition to the low cost furniture.
A survey in France shows IKEA as the top shopping experience.

Company has a business level strategy and they are looking to sustain this business level strategy.
When a company focus on a single product, they have to be innovative, to stay ahead of competition.

United color of Benetton wen on unrelated diversification and they bought restaurants on the high way in
new York.
Most of the companies prefers to go through a related diversification because they can create strategic fit
You can go through a vertical integration, or backward vertical integration, \
If I buy the tissue in order to sue , I’m backward vertical integration
Apple do the design and they are marketing the own supplies, half integration
Full integration, they own forests to produce tissues, those are decisions or corporate level strategies that
companies can embark on.
Competitive advantages can be imitatetd,
Family businesses can wait for long term profitability not like the corporate business who are led by non
related person who is waiting his incentive.
Family business can wait for their kids, or child kids to benefit.

Value creating diversification: using same resources for a larger business, when you buy your raw
materials you’re creating a value chain
Owning your stores is strategically something important
When you own your line of distributin it’s strategically very good and you are taking control of your end
user consurmer
The FAP mattresses creation is strategically very good
Your industry is not stable, you will go into unrelated diversification
When you made a decision to diversify there is an investment you should pay.
Internal governance : rules, principles, how the company wants to go
Firm performance, what companies want to achieve

Having a wide variety would enhance the company strategy

Diversify your customer base and in your related products, if I have CK but later on if they take it from me
I can benefit from my own brand and won’t go out of business.
This applies to well known brands and other types of businesses

In any business, you need to see where the industry is moving.

Thorough analysis of the industry environment, where the industry is moving

You need to move with the industry

You develop your strategy based on your market segment.

In the mind of consumer there is a mind for the value of the product

Sustainable strategy, their money is not coming only from operations, from other assets such as franchise.

Differentiation high value giving

Diversification by diversifying your product line such ad Mc Café
When you stuck in the middle between cost leadership strategy and differentiator
The differentiator factor important for the customer is the value we create
Come up with a central recommendation for the central problem
Prioritize your problems is something very important
Stimulate operators later build MVNO
Regular, service VAS
Potential different than revenue
Capitalization
Companies might have intangible assets to value reputation and market capitalization
Business model is how companies are making money, Google is not a traditional business model, threat of
new entrants, due to innovation they are ahead of other even elder rivals such as Yahoo

We choose the strategies that fit our and then we implement it and we control it
Even if the business is well managed, a lot of companies are closing their doors because the external
environment are not goot
We need to look as well to the internal environment to create competitive advantage
The immediate envifronmnet is the industry environment in which we are operating. Hospitality business
is I’m managing a bar, if I am operation a car, automobile industry, basically you need to understand
where you are operating, for exp technological industry a fast moving industry with a lot of changes we
need to adapt to
Political Econmoic Social Technological Ecological Lecal framework
Industry environment Michael porters
Understand the bargaining power between power of supplier and power of customer
The target is the firm ability to create a competitive advantage
3 ways to assess, indicators of performance is accounting profitability, then it’s profitable
In debted good shape in operations but financially in debted to grow, to buy real estate, …
Why company can share value for stakeholders, all those who have interest in the company, the customer
is a stakeholder, I have interest to go to shop to a place next to my place, customers are affected if
business is closed even if we don’t have direct benefits, shareholders are stakeholders, because they
invest their money, if management can create value to stakeholders especially shareholders, they expect
to increase to have something in return, government are stakeholders because they get taxes,

BUSINESS LEVEL STRATEGY

Accounting profitability,
Ability of the firm to create value to the stakeholders,
Economic value creation is the ability of the company to create value
Price should be set at the same place of the cost
Value creation = V-C > V – C economic value creation meaning company has competitive advantage
Profitability = Price - Cost

Core competencies what they can do better than others

VRIO framework : Valuable, rare, costly to imitate, organized to capture value ( Non substitutable )

Alternative strategies ( cost leadership/ differentitation .///

Integration meaning it has more than one competitive advantage and really increase the company ability
to compete

CORPORATE Level strategy

Usually go for related diversification to benefit from strategic fit

Vertical integration ( Backward vertical integration, forward vertical integration )
Backward : owning sources of input used in the production, go back in the value chain
Forward : opening my own stores to sell

Outsourced 99.9% for Boing

Decision to outsource and not vertical integration, is the ability of other company to give you on time
in addition to the cost
Not having control over the process is sometimes a factor where I decide to do things internally
Family businesses can go through vertical integration, they can grow later
Joint venture, merchandise, franchise, …. Are examples of corporate level strategy
Strategic alliance such as Audi-Saradar
Merge to become stronger in the market, this would decrease the competitive intensity
Mergers, acquisitions, reverse mergers, they cannot streamline the operation, they can demerge again.