By: Laura Carr, Ike Huestis, Brad Klingberg, Treanne Turner
SUMMARY OF FOUNDATIONS OF STRATEGIES
Slide 2
THE ROLE OF STRATEGY IN SUCCESS Goals that are simple,
consistent, and long term Profound understanding of the competitive
environment Objective appraisal of resources Effective
implementation
Slide 3
PEST ANALYSIS An environmental scanning framework Provides a
simple yet systematic approach to identifying those factors that
are likely to shape the competitive conditions within an
industry
Slide 4
PEST ANALYSIS Political Licenses Standardization Restrictions
on usage Economic The level of economic activity The rapid take-up
of mobile technologies in developing economies
Slide 5
PEST ANALYSIS Social Health scares Changes in fashion
Technological Improvements
Slide 6
PORTERS FIVE FORCES OF COMPETITION FRAMEWORK
Slide 7
3 sources of horizontal competition Competition from
substitutes Competition from entrants Competition from established
rivals 2 sources of vertical competition The power of suppliers The
power of buyers
Slide 8
Step 1- Identify the key resources and capabilities Step 2-
Appraising resources and capabilities Resources and capabilities
are most important in conferring sustainable advantage Strength and
weaknesses as compared to companies Step 3- Developing strategy
implications Determine key strengths and weakness POINT 3: PUTTING
RESOURCES AND CAPABILITY ANALYSIS TO WORK
Slide 9
Key capabilities Tangible: 511 stores in 44 states Intangible:
Reputation, relationships with brands Ex: UnderArmour and Nike Key
Resources Golf pros Trainers Fisherman Footwear specialist STEP
1
Slide 10
STEP 2
Slide 11
Not enough distributors to keep up with all 511 stores Plan to
build a new 600,000 sq ft distribution center Allow up to 250 more
stores STEP 3
Slide 12
Sustaining Competitive Advantage Identify What companies pose a
threat Incentive What product can be imitated Diagnosis Putting the
product out Resource acquisition Have resources and capabilities to
imitate the strategy of the company POINT 4
Slide 13
Golf Headquarters Golf Galaxy (First and Only Interactive golf
store) On site PGA pros, technicians Academy More Clothes, Footwear
and Workout gear Have footwear specialists and trainers on site
Gander Mountain Provided more fishing, hunting and outdoor
equipment Have expert fisherman and hunters on site Archery experts
on staff DICKS SPORTING GOODS
Slide 14
CH. 5 BUSINESS STRATEGIES IN DIFFERENT INDUSTRY AND SECTORAL
CONTEXTS Summary Classifying industries according to their stage of
development can in itself be an insight exercise because: 1.It acts
as a shortcut in strategy analysis 2.It encourages comparison with
other industries 3.It directs attention to the forces of change and
direction of industry evolution
Slide 15
CH 5. LEARNING OBJECTIVES Recognize the different stages of
industry development Identify the key success factors associated
with industries at different stages Recognize challenges in
strategic decision making Be able to use stakeholder analysis Be
able to use scenarios to explore industry and organizational
futures
Slide 16
HOW DICKS SPORTING ENGAGES IN STRATEGY ANALYSIS Sporting Goods
Retail Industry Rivalry Among Existing FirmsHigh Threat of New
EntrantsModerate Threat of Substitute ProductsHigh Bargaining Power
of BuyersHigh Bargaining Power of SuppliersModerate Five Forces
Model
Slide 17
CH. 6 TECHNOLOGY-BASED INDUSTRIES AND THE MANAGEMENT OF
INNOVATION Summary Despite turbulence and uncertainty, there are
analytical principles that can guide us toward strategies that can
improve odds such as: 1.Evaluating an innovations potential to
generate profit 2.Assessing the relative merits of licensing,
alliances, joint ventures and internal development as alternative
strategies for exploiting an innovation 3.Identifying the factors
that determine the comparative advantages of being a leader or a
follower in innovation
Slide 18
CH 6. LEARNING OBJECTIVES Analyze how technology affects
industry structure and competition Identify the factors that
determine the returns to innovation Formulate strategies for
exploiting innovation and managing technology Design the
organizational conditions needed to implement such strategies
successfully
Slide 19
HOW DICKS SPORTING GOODS MANAGES INNOVATION "DICK'S Sporting
Goods innovates by separating itself from the pack. DICK'S
associates do not talk about accomplishing a task; they discuss it
briefly and almost immediately begin to execute. DICK'S is always
one (or several) steps ahead of the competition. While others are
refining their process for step 8, DICK'S has jumped to step 10 and
is in the process of creating step 11. Open communication and high
intellectual horsepower across departments creates an atmosphere
that fosters this rapid innovation cycle." Director of
Merchandising, Marketing & Management Systems
Slide 20
THE COOPERATION PROBLEM The Agency Problem: When a contracted
agents goals may not be inline with the principals goals. Classic
Example: Managers worried only about their own careers.
Shareholders concerned with creating wealth
Slide 21
HOW IT RELATES TO DICKS Dicks Sporting Goods hires professional
golfers to work in their store. One of their primary job
responsibilities include selling merchandise to customers.
Professional golfers usually love their sport, and may not want to
sell gear to customers that dont need it.
Slide 22
HOW DICKS SOLVE THE PROBLEM Performance Incentives Like most
sales positions, part of their pay comes from commission. Other
forms of incentives can include bonuses for managers or stock
options for executives, as the better their company does the more
their stocks are worth.
Slide 23
DIVERSIFICATION The expansion of an existing firm into another
product line or field of operation. Can be related (Concentric) or
unrelated (Conglomerate). Can be vertical or horizontal
diversification.
Slide 24
HOW IT RELATES TO DICKS Dicks Sporting Goods main focus is
selling sports equipment. However, the company also sells other
concentric merchandise, such as outdoor equipment. This reduces
risk. Also, selling merchandise for many different sports reduces
risk. Lockouts Seasonal sports
