BUSINESS STRATEGY

Asst.Prof. Panita Surachaikulwattana

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 Asst.Prof. Panita Surachaikulwattana
• Education

• BA (first-class honor), Chulalongkorn University

• MSc in Management, Lancaster University, UK

• PhD in Organization and Management, Imperial College London, UK

• Professional experience

• อาจาร%ประ(า ภาค+ชาพา.ชยศาสต3 คณะพา.ชยศาสต3และการ8ญ: ;ฬาลงกร>

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• Research fellow, Research Institute for Policy Evaluation and Design (RIPED)

• Visiting professor, Imperial College London (supported by British Academy

research grants)

• Co-lecturer in the Designing Your Life course, Stanford University

• Research interests

• Innovation (Business, Social, and Managerial Innovation), Diffusion and

Translation Processes และ Organizational Design

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Course evaluation
See the course syllabus.

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 Today’s overview

• What is strategy? Why do we need to have strategy?

• What is good strategy? What is bad strategy?

• How can we formulate strategy? What do we need to know in order to

make good strategy?

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What is strategy?

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 What is strategy?
the plan the company take

• The set of goal-directed actions a firm takes to gain and sustain

superior performance relative to competitors - competitive
advantage. indicator
,
measurement: market share
,
sale
,
revenue
to evaluate that
your company

brand reputation have

,
eargin competitive advantage

• To achieve superior performance, companies compete for resources.

Think about start-ups, social networks, charities, existing companies.

• How?
strategy is an answer to the "How" question

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focus on innovation system ,
not only making product

goal

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 Our mission is to ensure that artificial general intelligence benefits all of humanity.

Our goal is to develop and deploy AI technologies that are safe, ethical, and beneficial for all.
strategy

Ethical Education &

R&D Collaboration Open source
governance advocacy

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A good strategy vs.
a bad strategy

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Best practices!!
thing recommended today
company east do

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 What is strategy?

Is the following a strategy??

Benchmarking, outsourcing, partnering, change management,

digital marketing, TQM and operation management
everyone does the same thing

Operational effectiveness…..

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What Strategy Is: Gaining and Sustaining
Competitive Advantage
for analyze industry level

ANALYSIS:
for analyze Macro love

external analysis : Swet

,
live force
,
pesic

jinic : vi

• Diagnosis of the competitive advantage

internal strategy : core competency ,
resource
·
capability

analyze what is in the environment what is strength what is weakness what is opportunity what is threats
going on , , , ,

FORMULATION:
• Guiding policy to address the competitive challenge
business level strategy : for single product , single business whil, strategic position (differentiation ,
cost Lendership ,
blue occan Blue Ocean คือ พื้นที่ทางธุรกิจที่เน้นการแข่งขันในการสร้างความต้องการ (Demand) ใหม่ขึ้นมา ผ่านการสร้างสินค้าใหม่ หรือสร้าง
มูลค่าเพิ่มให้กับสินค้าที่มีอยู่แล้ว ซึ่งถือเป็นตลาดที่มีการแข่งขันไม่สูงมาก และมีคู่แข่งน้อย แต่การใช้กลยุทธ์นี้จะต้องอาศัยความรอบคอบ
ในการสำรวจตลาด และเรียนรู้พฤติกรรมของลูกค้า เพื่อให้สามารถตอบสนองความต้องการของลูกค้าได้ตรงกลุ่มด้วยเช่นกัน

corperate level : direction for whole operation diversification ,

geography ,
value chairs
, merged a acquisition

IMPLEMENTATION:
• Set of coherent actions to implement the firm’s guiding policy
: culture structure
organizational design org , org

activities such as marketing operation

business ,

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 [Best practices] are not strategy.
They are necessary but not
sufficient

Strategy us about making [clear]

strategic positions,
and about the fit among firms’
activities that align with
the chosen strategic position.
Michael E. Porter

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 Case 1: Tesla’s Secret Strategy

Tesla's Secret Strategy end of 2018, it had sold more than 250,000 of the Model
S worldwide.
Hoping for an even broader customer appeal, Tesla also
TESLA INC., an American manufacturer of all-electric introduced the Model X, a crossover between an SUV and a
cars-boasted a market capitalization 1 of some $60 billion family van with futuristic falcon-wing doors for convenient
(in early 2019), an appreciation of more than 1,400 per- access to second- and third-row seating. The $100,000 start-
cent over its initial public offering price in 2010. How can ing sticker price of the Model X is quite steep, thus limiting
a California startup achieve a market valuation that ex- its mass-market appeal. Technical difficulties with its innova-
ceeds that of GM, one of the largest car manufacturers in tive doors delayed its launch until the fall of 2015. By the
the world, making some 10 million vehicles a year? The end of 2018, however, Tesla had sold more than 100,000 of
answer: Tesla's secret strategy. In a summer 2006 blog en- the Model X globally.
try on Tesla's website, Elon Tesla also completed Step
Musk, Tesla's co-founder 3 of its master plan. In 2016,
and CEO, explained the the electric car maker un-
startup's master plan: 2 veiled the Model 3, an all-
1. Build sports car. electric compact luxury
sedan, with a starting price
2. Use that money to build
,I of $35,000. Many want-to-be
an affordable car.
Tesla owners stood in line
3. Use that money to build overnight, eagerly waiting for
an even more affordable Tesla stores to open so they
car. could put down their $1,000
deposits to secure a spot on
4. While doing above, also
the waiting list for the Model
provide zero-emission
3-a car they had not even
electric power genera-
seen, let alone taken for a test
tion options.
The Tesla Roadster 2 set new records for a vehicle to be driven
drive. As a result of this con-
5. Don't tell anyone. 2 on public roads: It goes from 0-60 mph in 1.9 seconds and from sumer enthusiasm, Tesla re-
Let's see if Tesla stuck to 0-100 mph in 4.2 seconds, with top speeds of well above 250 ceived more than 500,000
mph. The base price of this newest Tesla, scheduled to launch
its strategy. In 2008, Tesla in- preorders before the first de-
in 2020, is $200,000.
troduced its first car: the livery, and thus $500 million
KYDPL KYODO/AP Images
Roadster, a $110,000 sports in interest-free loans. Despite
coupe with faster acceleration than a Porsche or a Ferrari. initial difficulties in scaling up production, deliveries of the
Tesla's first vehicle served as a prototype to demonstrate Model 3 began in the fall of 2017. By the end of 2018, Tesla
that electric vehicles can be more than mere golf carts. Tesla had delivered more than 100,000 of the Model 3 globally. To
thus successfully completed Step 1 of the master plan. meet the strong demand for the lower priced Model 3, Tesla
In Step 2, after selling some 2,500 Roadsters, Tesla hopes to increase its annual production to 1 million vehicles
discontinued its production in .J2012 to focus on its next by 2020.
car: the Model S, a four-door family sedan, with an initial In the spring of 2019, Tesla launched the Model Y, a
base price of $73,500. The line appeals to a somewhat compact SUV that is a smaller and much lower priced ver-
larger market and thus allows for larger production runs to sion of the Model X. Elon Musk plans to start deliveries of
drive down unit costs. The Model S received an outstand- the new Model Y between the fall of 2020 and spring 2021,
ing market reception. It was awarded not only the 2013 with the entry version starting at $39,000 (and 230 miles
Motor Trend Car of the Year, but also received the highest range) and the high-end performance version starting at
score of any car ever tested by Consumer Reports $60,000 (and 280 miles range).
(99/100). Tesla manufactures the Model Sin the Fremont, Step 4 of Musk's master plan for Tesla aims to provide
California, factory that it purchased from Toyota. By the zero-emission electric power generation options. To achieve
this goal, Tesla acquired SolarCity, a solar energy company, Step 5: "Don't tell anyone"-a humorous statement added by
for more than $2 billion in the fall of 2016. This successful in- Elon Musk-thus the ChapterCase title "Tesla's Secret Strategy." 3
tegration of Tesla and SolarCity, which resulted in the first
fully integrated clean-tech energy company that combines so- NOTE: By summer 2019, Tesla's market cap stood at about
lar power, power storage, and transportation, marks the com- $45 billion.
pletion of Step 4 in Tesla's master plan. Part II of this ChapterCase appears in Section 1.4.

Source: Rothaermel, F. T. 2021. Strategic Management (5th edition): 5 - 6. New York: McGraw-
Hill Education.

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Read and discuss the case of Tesla

• Is it a good strategy? Why?

• What is Tesla’s strategy?

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So, good strategy is…

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 Examples of bad strategy,
or what strategy is not…
▪ Grandiose statements innrtsorn
▪ Failure to face competitive challenges · urries
ur

▪ Operational effectiveness, competitive benchmarking, or other tactical

tools

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 What Is Competitive Advantage?
Competitive Advantage:
• Superior performance relative to other competitors in the same industry or the
industry average
✓ Key terms here – Superior and Relative

An interesting question is how a firm can achieve sustainable competitive

advantage.

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Strategic Analysis:
External Analysis

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Exhibit 1.1 Effects Determining Superior Firm
Performance

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Five Forces Model
mini : Kniusmenweinman

dinsmoros vos civ

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 Five Forces Model
• Industry Rivalry - the intensity with which companies within the same
industry compete for market share and profitability.

• Threat of new entrants - the risk of potential competitors entering the

industry.

• Threat of substitutes - the idea that products or services available from

outside the given industry will come close to meeting the needs of current
customers.

• Bargaining power of buyers - the pressure an industry’s customers can put

on the producers’ margins by demanding a lower price or higher product
quality.

• Bargaining power of suppliers - the pressures that industry suppliers can

exert on an industry’s profit potential.

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 Threat of new entrants
Entry barriers
• Economies of scale More produc ,
lower cost per whil

• Network effects higher number of user

,
the more valuable the platters is

• Customer switching costs

• Capital requirements
• Government policy

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From analysis to summary…

• Is this market/industry attractive? Can a firm still

achieve competitive advantage?

• Can we do anything with the forces?

• Do we need to create a new strategy in the near

future?

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 Exercise

• Select one industry and analyze the possible impact of its

environment by using the five forces model.

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 Five Forces Analysis
Five Forces Current situation Near future

Competitive rivalry (details) High/low/medium

Threat of new
(details) High/low/medium
entry

Threat of
(details) High/low/medium
substitution

Buyer power (details) High/low/medium

Supplier power (details) High/low/medium

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 Five Forces Analysis
Low = 1 - 3
Current situation Near future Medium = 4 - 7
Five Forces High = 8 - 10
Weighted Weighted
Impact Impact
average average
evaluation evaluation
(1-10) (1-10)

Competitive High/low/
(details)
rivalry medium

Threat of new High/low/

(details)
entry medium

Threat of High/low/
(details)
substitution medium

High/low/
Buyer power (details)
medium

High/low/
Supplier power (details)
medium

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 Take-Away Concepts

• Strategy (definition and its role)

• Strategic AFI (analysis, formulation, implementation)
• Define competitive advantage, and sustainable competitive advantage.
• Differentiate the role of firm effects and industry effects in determining
firm performance.
• Strategic analysis using the five force model

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