BM22 Strategic Management · Module 1
The firm and its environment
Erasmus RSM
Strategy in one sentence
Long-term direction of an organisation (internal + external). Mintzberg: a pattern in a stream of decisions.
Strategy statement (Collis and Rukstad, ~35 words)
| Part | Check |
|---|---|
| Objective | measurable + time-bound (not mission or values) |
| Scope | customers/offering, geography, vertical; also what you do not do |
| Competitive advantage | value proposition + internal alignment (unique activities) |
On the exam: recognise the objective in running text.
Levels of strategy
- Corporate: scope and portfolio (vertical, horizontal, geographic)
- Business: competing in a market, competitive advantage
- Functional: R&D, IT, marketing
Rumelt
Bad: fluff, not facing the challenge, goals = strategy, dog's dinner. Good: diagnosis + guiding policy + coherent actions.
Strategy development
| Concept | Meaning |
|---|---|
| Intended | the plan |
| Deliberate | plan that works |
| Unrealized | plan that does not work |
| Emergent | arises bottom-up, through learning |
| Realized | deliberate + emergent |
Rational-analytic = prescriptive (how it should go). Mintzberg = descriptive (how it really goes). Examples: Ikea, Slack.
PESTEL (macro, non-market)
Political - Economic - Social - Technological - Ecological - Legal (also STEEP, SEPTEMBER)
Aim: opportunities and threats, key drivers for change (greatest impact). Not a fill-in matrix.
PESTEL = non-market, macro level. Five Forces = market, industry level.
Forecasting
Single-point, range, alternative futures. Megatrends, inflexion points, weak signals. Predicts.
Scenario analysis (does not predict)
- Scope (industry, region, years)
- Key drivers: impact, uncertain, mutually independent
- 2x2 matrix, 4 scenarios with name and story
- Impact and robustness of the strategy
- Monitor (early warning indicators)
Pitfalls: dependent drivers, jumping straight to the company, calculating probabilities, ghost scenarios.
Exam tips
- Full sentences, English technical terms, show the argument.
- Form: 3 sub-questions (15 points): name, choose and justify, compare.
- Word limit is hard: 20 / 40 / 75 / 150.
Mnemonics
- PESTEL = Political, Economic, Social, Technological, Ecological, Legal (law).
- OSA = Objective, Scope, Advantage.
- Realized = D + E (Deliberate plus Emergent).
Key terms (never translate)
strategystrategy statementobjectivescopecompetitive advantagevalue propositioninternal alignmentlevels of strategycorporate levelbusiness levelfunctional strategiesthree horizonspurposevisionmissionintended strategydeliberate strategyunrealized strategyemergent strategyrealized strategyrational-analyticPESTELnon-marketkey drivers for changeforecastingsingle-point forecastrange forecastalternative futuresmegatrendsinflexion pointsweak signalsscenario analysisghost scenariosearly warning indicatorsFive Forces