Strategic Management and Agile Enterprise

Case Study Group Assignment

“Are You Sure You

Have a Strategy?“
Chalista Putri Romano 29323001 Jan Michael Edward Tinsay 29323109
Fahmi Haidar Z. 29323003 Rifandy Julio Ponggawa 29323123
Mohammad Abghi Firyal Ulhaq 29323011 Inayah Chaerunnisa 29323124
Muhammad Anandito Attaya 29323014 Danyaa Allya Salsabilla 29323141
Reginald Jeremiah Martua 29323017 Abdul Hakim Amiranto 29323096
Tania Meligiatri 29323023 Ajeng Anis Wahdah 29323024
Kania Hana Rahmani 29323101
 Case Overview
The article seeks to define what a strategy
truly entails, addressing the frequent misuse
of the term as a broad, ambiguous concept.
It stresses the necessity for a unified,
comprehensive plan that distinctly outlines
how a business will accomplish its goals.

Where we are reminded repetitively that

without a defined strategy, businesses might
engage in uncoordinated activities that
don't contribute to their overall objectives,
leading to inefficient resource use and
missed opportunities.
Misconception about strategy

Our strategy is to be
the “low cost
provider”
The company's
strategy is to
integrate a set of
regional
acquisitions.
Our strategy intent is
to always be the first
mover.
Our strategy is to Cannot be Elements of strategy
move from defense considered as a
to industrial strategy.
applications.
Putting Strategy in
Place Not every important choice an
executive faces is part of a
company’s strategy
A company’s mission and
objectives are not part of the
strategy but guide it
An objective of reaching a
particular revenue or earnings
target is not a strategy
Choices about internal
organizational arrangements,
such as compensation policies,
information systems, or training
programs are not a strategy but
should reinforce and support it
THE 5 MAJOR ELEMENTS OF STRATEGY
 Arenas
Business should have a capability to identify their arenas of business
operation they were running in. Their ability in scouting potential markets
and potential competitors, will eventually lead their course in carry out a
pre-emptive action of a business problems that might arose later. Their
aptitude in identifying a potential issues would directly assist business to
achieve a goal in becoming market leader in their industry.
 Joint
How to adventure?
Get Aqcuisitions?
There? Licencing?

Vehicle
Vehicle is necessary in expansion modes. Failure to explicitly
consider and articulate the intended expansion vehicles can
result in the hoped-for entry's being seriously delayed,
unnecessarily costly, or totally stalled.

Research shows that companies can develop strong

capabilities in acquisitions and joint ventures. However,
companies that use ad hoc or patchwork approaches without a
coherent strategy are at a disadvantage compared to those with
a cohesive plan.
 Differentiations
A strategy should define arenas, vehicles, but most importantly
the differentiators - how the firm will win in the marketplace

Success in a competitive market requires: Deliberate choices on

unique strengths & Utilizing these strengths to outperform
competitors

Examples: Gilette and Goldman Sachs - Combine differentiators

for overall value

Focus on a few, mutually reinforcing differentiators aligned with

company strengths and market values
 Staging
Staging can be referred to the choreography of your strategic moves, or
the speed and sequence of the strategy major initiatives to take in order
to heighten the likelihood of success. There is no universally superior
staging sequence, but more emphasizing on the strategist judgement
when choosing one. Several factors can affect the decision for staging
such as : Resources available, Urgency, Acheivement of credibility, and
Pursuit of early wins.
 Economic Logic
Once your company has defined 4 clear pillars (Arenas, Vehicles,
Diffrentiators, Staging) for the foundation of its strategy, the last thing it
needs is the financial foundation of your strategy. Economic Logic
explains how your chosen approach will generate profits. It considers
factors such as cost structure, pricing strategies, and value capture
mechanisms to ensure that the strategy.
 5 elements of strategy - IKEA

Arenas Vehicles Differentiators Staging Economic Logic

IKEA follows a swift IKEA's economic

international expansion strategy revolves
IKEA specializes in IKEA distinguishes
IKEA relies on strategy, focusing on around economies of
selling affordable, itself from
organic expansion one region at a time. scale and replication
modern, competitors by
by establishing its They start by opening efficiencies. By
offering reliable
Scandinavian- own stores without one store in each maintaining low
product quality at
style home acquisitions or targeted country, production costs
lower prices (20-
furnishings and joint ventures to followed by robust through simple yet
30% cheaper), a
furniture, targeting ensure complete public relations and mass-producible
welcoming
a young upper- control over the advertising campaigns designs and long-term
shopping
middle-class implementation of to introduce their supplier partnerships,
experience, and
demographic its unique innovative shopping IKEA can offer
immediate product
shopping concept. concept before competitive prices and
globally. availability. expanding with more sustain substantial
stores. profits.
IKEA’s Strategy
 5 elements of strategy - Brake Product International (BP)I

Arenas Vehicles Differentiators Staging Economic Logic

early sign of continued commit

BPI were committed ment to the major global auto
to organic internal manufacturers, a critical first
development. step was to establish the joint
BPI executives ven tures with brake
committed to manufacturers in Asia.
executives decided
expanding beyond to enter into The company management committed to
their current strategic alliances
was already a promptly establish alliances BPI's economic logic
market scope of with the leading
technology with a select group of manu hinged on securing
North American producers
leader facturers of other suspension premium prices from its
and European car components, and to experiment customers,
plants by adding BPI planned to
with one pilot customer.
initiate equity joint
Asia
ventures with brake he executives planned to
companies in China, launch the full versions of the
Korea, and sys tems-integration and
Singapore. global-reach concepts,
complete with aggressive
marketing.
BPI’s Strategy
Both BPI and IKEA illustrate the
importance of a coherent, integrated
strategy where all elements reinforce
each other. While IKEA's strategy focuses
on providing affordable, stylish furniture
through a unique retail experience and
efficient supply chain, BPI's strategy
emphasizes technological leadership,
global reach, and systems integration to
meet the evolving needs of the
automobile industry.
Testing the quality of our strategy
Environmental Fit:
Question: Does your strategy align with the key success factors in your industry and the
broader economic and social environment?

Importance: Ensures that the strategy is relevant and responsive to external conditions,
maximizing the potential for success.

Resource Exploitation:
Question: Does the strategy effectively leverage your organization's unique resources and
capabilities to create a competitive advantage?

Importance: Utilizes the strengths of the organization to differentiate itself from

competitors and create value.

Sustainability:
Question: Are the competitive differentiators sustainable over time against competitors’
actions and industry changes?

Importance: Ensures long-term competitive advantage and prevents easy replication by

competitors.
Testing the quality of our strategy
Internal Consistency:
Question: Do all the elements of the strategy (arenas, vehicles, differentiators, staging, economic logic) fit
together cohesively and reinforce each other?

Importance: Avoids internal contradictions and ensures that all parts of the strategy work towards the same
goals, creating a stronger overall plan.

Resource Availability:
Question: Does your organization have the necessary resources (financial, human, technological) to
implement the strategy effectively?

Importance: Feasibility is critical; a strategy that cannot be implemented due to resource constraints is
ineffective.

Implementation:
Question: Has the implementation of our strategy worked in other cases that might have similarities? what
are the possibilities of either failing or succeeding ?

Importance: By asking whether the strategy is aligned with core capabilities and if the necessary resources
are available, organizations can confirm that their strategic plan is realistic and achievable, preventing
resource shortages and misalignments.
To be Noted about Strategy
A static strategy is not necessary
Strategy can change and be modified over time.
A strategy doesn't require a business to become rigid.
To maintain a variety of alternatives through partnerships, outsourcing, leased
assets, toehold investment, and technology in unpredictable situations, the
strategy should be designed with desirable flexibility.
Strategy doesn't deal only with an unknowable
Business strategies now have a shorter suitable lifespan—between two and three
years, as opposed to five to ten years. Nonetheless, the approach focuses more
on evaluating the present than it does on projecting the future.

Strategy is not primarily about planning, it is about intentional, informed, and

integrated choices.
 Conclusion
Strategy is not defined by grand declarations, it is different from mission and objectives. The
strategy consists of an integrated set of choices that will help the organization achieve its
objectives.

There are five major elements of strategy

Arenas: identify the arenas of business operation
Vehicles: the means to reach the particular arena of business
Differentiators: how to win the marketplace
Staging: the speed and sequence of actions to increase chances of success
Economic Logic: financial foundation on how to generate profits

By implementing the five elements of strategy, both IKEA and BPI managed to increase sales
growth and have a successful turnaround.

It is important to test the quality of the strategy using six criteria of evaluation (environmental fit,
resource exploitation, sustainability, internal consistency, resource availability, and
implementation)
Thank You!