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Contents

An introduction to the game of business...............................................................1

Strategic interdependence...........................................................................1

Path dependence.......................................................................................... 1

Successful companies looks backwards and forwards..................................1

Organizational architecture..........................................................................1

Value today-----------------Ambi----------Expolartion.............................1

Experience curve : S curve...........................................................................1

What is strategy?................................................................................................... 2
Value Net............................................................................................................ 3
Co-locating......................................................................................................... 3
Monopoly & competing against yourself................................................................3
An Overview of Strategy: The six forces: COORS...................................................4
COORS success factors_ Which are sustainable?................................................4
Cola Wars............................................................................................................... 4

An introduction to the game of business


1. Strategic interdependence

2. Path dependence
3. Successful companies looks backwards and forwards
4. Organizational architecture
o Incentives and contracts are the devices used to reward
appropriate managerial behaviour
o Structure & processes are the manner in which decisions are
made and work is performed within the organization
o Culture & beliefs refers to the norms and value systems that are
shared among the employees of an organisation
o People are not just employees of the organization, but also the
strategy used to recruit, compensate and retain those individuals
and the type of people they are in terms of their skills, values and
orientation.

Value today-----------------Ambi----------Expolartion
Experience curve : S curve

Reinventing at the right time (timing and direction) is challenging. Therefore


managers have to create the future like chefs. To do that overdependence on
numbers have to minimize.

What is strategy?
It is an art and a science and it is important to learn how to think strategically
which ensure creating value today and tomorrow. Doing nothing and exit are the
two extreme of strategy and rest of the options are in between these two.
The environment is seemingly change than ever before. Sharing economy for
instance, change the competitive landscape of businesses. Media, banking are
exemplified the re-designing of businesses due to appearance of google and

smart phones.
Human capital is important as a supply of labour which shows the value of Sachi
& Sachi depended on several key people than the inbuilt processes and the
systems of the company. A successful CEO is a person who does not need to the
company, if so, what would be the remuneration for CEO?
Strategic decisions are related with choices and it is irreversible, important and
have to commit significant commitment of resources. Ex: pricing is a tactical
decision not strategic.

Corporate sustainability, corporate philanthropy and


triple bottom line reporting
This is questionable due to some reasons.
1.
2.
3.
4.

Green washing
Hard to measure the impact
What is the role of the government?
CEOs duty is maximize value as higher value ensure the payments to
stakeholders which ensures higher returns for the residual owners.
(Common stock)
Ex:
(Value added statement)

Value Net

Example

1 .Intel invested in video streaming as it indirectly boost the demand for


processers.
2. Airlines as competitors are competing for passengers while bargained for
health insurance as an industry to reduce the costs. Therefore, there is no any
eternal friend or foe.
3. Citi Bank had the first ATM network and restricted the usage to other bankers.
One year later rest of the banks introduced a network which prohibits Citi Bank
leading to loss of competitive landscape.

Co-locating
-

Restaurants in the same street attract the customers but limit the
business for the moment.
Complementors make the market while competitor divide the market.

Added value= competitive advantage


Nintendo reduces the supply to boost the demand for other products.
Similarly Apple, restaurants, night clubs do the same. This gives free
advertising while reducing the added value (power) of retailers.

Monopoly & competing against yourself


When Nintendo had 16 bit upgraded versions Sega entered the market due to
1. Incumbent inertia (organisational hubris)
2. Cannibalisation of existing 8 bit market
3. Ex-ante probability of the probability of success
So, true objective should be not just capture the highest market share but to
capture the maximum value. In summary any business school teaches how to
increase customers willingness to pay while reducing cost. The generic strategies
are fall in between these two extremes namely, differentiation, low cost and
focus strategies.

An Overview of Strategy: The six forces: COORS


Coors was founded by two engineers which had operational excellence but they
failed to capture the maximum value by increasing the willingness to pay.
Further, systematic mistakes can be observed.
Virginia has negative NPV and can be treated as a strategic initiative which gives
more value by altering other players behaviour. This is an example of real
option.
A real option itself, is the right but not the obligation to undertake certain
business initiatives, such as deferring, abandoning, expanding, staging, or contracting a
capital investment project.

COORS success factors_ Which are sustainable?

Cola Wars
What brings Coke to current situation?

Competitive landscape in cola industry


Product differentiation and not competing over prices. (scale of economies
in marketing)
Taking control over bottling which enables to manage complex product
portfolio.
Cumulative brand equity
Sophisticated distribution channels

Where to from here?


Competitive landscape in bottled water market is different from Cola market. As
such it would be difficult to replicate same competitive advantage even though
they had a well-developed bottling infrastructure.