Strategic & International Management
Strategy process and positioning
-
AFI Strategy Process (Analysis–Formulation–Implementation)
AFI structures strategy work into three phases: analyzing the internal/external situation, formulating strategic options and choices, and implementing them through structures, processes, and actions. It’s a rational, cyclical process that underpins the distinction between deliberate and emergent strategy. -
Hambrick & Fredrickson’s Strategy Diamond
The Strategy Diamond breaks strategy into five linked elements: Arenas, Vehicles, Differentiators, Staging & Pacing, and Economic Logic. It helps ensure that a firm’s choices about where to play, how to win, how to get there, when to move, and how to make money fit together coherently. -
Market-Based View (MBV) vs. Resource-Based View (RBV)
The MBV explains performance primarily by industry structure and market position (structure–conduct–performance), emphasizing attractive industries and strong positions (e.g., cost leadership, differentiation). The RBV explains performance by firm-specific resources and capabilities (VRIN/VRIO), stressing internal strengths and how they’re built and protected over time. -
Operational Effectiveness vs. Strategy (Porter)
Operational effectiveness means performing similar activities better than rivals (higher efficiency, quality, speed), but it can be quickly copied and doesn’t guarantee sustainable advantage. Strategy is about choosing a distinctive position with a tailored system of activities and trade‑offs, so that not all best practices can be combined without ruining the logic. -
Strategic Positioning Types (Variety-, Needs-, Access-based)
Variety-based positioning focuses on a narrow set of products or services; needs-based focuses on serving most needs of a particular customer segment; access-based focuses on serving similar needs, but reaching customers in a distinct way (e.g., location). These three archetypes clarify how a firm can be “different” beyond just being cheaper or better. -
Red Queen Effect
The Red Queen effect describes a situation where firms rapidly imitate each other’s practices, so everyone “runs faster” but relative positions stay the same. It highlights how pure operational improvements without differentiated strategy can lead to costly arms races with little net value creation.
Environment and industry analysis
-
VUCA
VUCA characterizes environments as Volatile, Uncertain, Complex, and Ambiguous, emphasizing frequent change, limited predictability, many interdependencies, and unclear signals. It underscores why rigid, purely rational planning is insufficient and why learning and adaptation matter. -
PESTEL Framework
PESTEL structures macro-environment analysis into Political, Economic, Social, Technological, Ecological, and Legal factors. It helps explain how external forces shape industry conditions, revenues, and costs, even though firms can barely influence them directly. -
Porter’s Five Forces
The Five Forces framework analyzes industry attractiveness via the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and rivalry among existing competitors. It links the strength of these forces to profitability potential and helps identify where to defend or reshape the industry. -
Porter’s Generic Strategies
Porter’s generic strategies distinguish cost leadership, differentiation, and focus (cost or differentiation in a narrow segment) as basic ways to achieve competitive advantage. Being “stuck in the middle” means lacking a clear choice, which typically leads to weak competitive positions. -
Price Elasticity and Cross-Price Elasticity
Price elasticity measures how demand for a product changes when its own price changes, indicating whether it is elastic, inelastic, or unit elastic. Cross-price elasticity measures how the demand for one product reacts to price changes in another, revealing whether goods are substitutes or complements. -
Search, Experience, and Credence (Trust) Qualities
This framework categorizes product/service attributes into search qualities (assessable before purchase), experience qualities (only after use), and credence qualities (hard to judge even after use). It explains when differentiation relies more on brand, reputation, and signals rather than easily observable features. -
Industry Definition via Substitution and Cross-Price Elasticity
Qualitatively, industries are defined by substitution (whether one product’s pricing affects another), similar customer groups, and geographic scope. Quantitatively, cross‑price elasticity is used to test whether products are close substitutes and thus part of the same industry.
Internal analysis, resources, and costs
-
VRIN / VRIO Model
The VRIN/VRIO framework tests whether resources and capabilities are Valuable, Rare, (hard to) Imitate, non‑substitutable/transferable, and whether the Organization is set up to exploit them. Only resources that meet these criteria can form the basis of a sustained competitive advantage rather than a temporary one. -
Value Chain
The value chain decomposes a firm into primary and support activities that together create value for customers (and incur costs). It helps identify where differentiation or cost advantages arise and how activity choices must fit the chosen competitive strategy (e.g., cost leadership vs differentiation). -
Law of Experience (Experience Curve)
The law of experience states that unit costs decline by a roughly constant percentage each time cumulative output doubles, due to learning, process improvements, and scale effects. It underpins strategies that emphasize early volume growth and long-term cost leadership. -
Cost Management Instruments (ABC, Target Costing, Zero-Based Budgeting, etc.)
This toolbox includes Activity-Based Costing, Target Costing, Zero-Based Budgeting, Overhead Value Analysis, Life Cycle Costing, and Cost Benchmarking. Together, they provide systematic ways to understand cost drivers, design products and processes to meet target costs, and continuously improve cost structures. -
SWOT Analysis (SIM Variant)
SWOT classifies internal Strengths and Weaknesses and external Opportunities and Threats, but in your course it specifically focuses on their interaction, not just listing them separately. The aim is to derive a small set of key strategic issues at the intersection of O/T and S/W, integrating MBV (outside‑in) and RBV (inside‑out).
International business and global strategy
-
CAGE Distance Framework
CAGE analyzes “distance” between countries along Cultural, Administrative, Geographic, and Economic dimensions. It helps managers understand why some foreign markets are effectively “farther” than others and guides choices on entry mode and value chain configuration. -
Bartlett & Ghoshal’s Integration–Responsiveness Matrix
This matrix maps pressures for global integration versus local responsiveness and identifies four archetypal strategies: global, transnational, international, and multinational. It explains why firms must balance efficiency gains from standardization with the need to adapt to local markets. -
Ghemawat’s AAA Triangle
The AAA Triangle distinguishes three broad global strategies: Adaptation (tailoring to local differences), Aggregation (exploiting similarities via regional/global scale), and Arbitrage (exploiting cross‑country differences such as costs or taxes). A clear global strategy typically emphasizes one or two “As” while managing trade‑offs among them. -
Dunning’s OLI Paradigm (Eclectic Framework)
OLI explains when firms use foreign direct investment (equity modes) rather than exporting or licensing by requiring Ownership, Location, and Internalization advantages to hold simultaneously. If these conditions are weak, non‑equity modes like exporting, licensing, or franchising are more likely. -
Typology of Global, Transnational, International, and Multinational Strategies
This typology classifies firms based on their degree of global integration and local adaptation: global (high integration, low adaptation), transnational (high both), international (low both), and multinational (low integration, high adaptation). It clarifies how different configuration choices align with industry conditions and CAGE distances.
Views of the firm and success
-
Production View, Managerial View, and Stakeholder View of the Firm
The production view sees the firm mainly as a transformer of inputs to outputs, focusing on suppliers and customers in relatively simple environments. The managerial and stakeholder views broaden this to emphasize separation of ownership and control, complex multi-stakeholder coalitions, and the need to manage a web of relationships in turbulent contexts. -
Institution-Based View and Resource-Based View of International Success
The institution-based view focuses on how formal and informal “rules of the game” (laws, regulations, norms, culture) shape firm behavior and performance, especially via liabilities of outsidership. Combined with the resource-based view, it argues that success abroad depends on both favorable institutions and strong firm-specific advantages that compensate for distance and outsidership. -
Shareholder Approach vs. Stakeholder Approach (Objective Systems)
The shareholder approach defines success as maximizing discounted future cash flows for owners (shareholder value) and treats other stakeholder interests largely instrumentally. The stakeholder approach aims to maximize net benefits for all stakeholder groups (stakeholder value), but requires interpersonal benefit–cost comparisons and explicit value judgements, making it harder to operationalize. -
Corporate Social Responsibility (CSR) and Triple Bottom Line (TBL)
CSR is a management concept where firms align strategy and operations with societal and environmental expectations of multiple stakeholders, not only shareholders. The Triple Bottom Line operationalizes this by measuring success across people, planet, and profit, fitting naturally with a stakeholder-oriented view of the firm.
Decision-making, objectives, and governance
-
Aspiration Level Theory (Cyert & March)
Aspiration Level Theory proposes that firms satisfice rather than maximize, aiming to reach aspiration levels shaped by own past performance, peers’ performance, and unexpected events. Falling below aspirations triggers problemistic search and potential strategic change, while doing better tends to stabilize current strategies. -
Organizational Slack (Cyert & March)
Organizational slack is the cushion of resources above the minimum needed to keep the stakeholder coalition together (e.g., extra budgets, generous wages, perks). It acts as a buffer and stabilizer, absorbing shocks and enabling adaptation, but also risks inefficiency if it becomes excessive. -
Noorderhaven’s Models of Strategic Decision Making
Noorderhaven contrasts synoptical planning models (design school, strategic planning school) that see strategy as a rational, top‑down process with incremental and political models (disjointed incrementalism, garbage can, logical incrementalism) that stress bounded rationality, fragmentation, and emergent patterns. The interpretative approach adds a layer where shared paradigms, culture, and mental models shape how managers perceive problems and options. -
Principal–Agent Theory
Principal–Agent theory analyzes conflicts that arise when owners (principals) delegate decision authority to managers (agents) who have different interests and better information. It focuses on agency costs (monitoring, bonding, residual loss) and the governance mechanisms (boards, incentives, reporting, control systems) designed to align managers with owner objectives.