Strategic Management
B. Cassiman
Lecture notes and syllabus summary
Academic Year 2025–2026
1
,1) What is Strategy?
2
,1. Important Characteristics
Competitive landscape = the industry context in which the firm competes (rivals, market
structure, profitability levels).
Industry value system = vertical chain of players through which value flows from raw
inputs to end users.
Competitive advantage = a firm has a competitive advantage when it has driven a wider
wedge between willingness to pay and costs than its competitors have achieved.
Product and customer scope = the What and Who dimensions of strategy: which products
to offer, to which customers.
Geographical scope = the Where dimension: which regions the firm operates in.
Activities = the concrete tasks the firm performs to deliver its value proposition.
Resources = the firm’s tangible and intangible stock of assets.
Capabilities = the firm’s ability to deploy resources in activities.
Business model = how the firm captures value from its activities (revenue model + cost
model).
Corporate strategy = strategy for a multi-business firm: which activities are integrated
across business units (group level) vs. kept individual (BU level).
Corporate social responsibility (CSR) = the firm’s obligation / contribution to society
beyond pure profitability strategy is not only profit!
2. Definition
Strategy = The choice of a future for the organization and of a way to reach that future,
understood as the framework that coordinates, unifies and integrates the company's decisions
and actions, positioning a business in an industry so as to generate superior financial returns
over the long run.
Three building blocks:
Choice – strategy is a deliberate selection among options.
Future – strategy is forward-looking, multi-year horizon.
Framework – strategy is a structure that holds many decisions together.
Integrates – strategy unifies different parts of the firm into a coherent whole.
Closing condition: positions a business in an industry so as to generate superior financial
returns over the long run the performance test of any strategy.
3. Strategy statement 3
,A strategy statement has three elements (all required):
1) Objective – the goal / the ends
2) Scope – the domain in four dimensions: What, Who, Where, How.
3) Competitive advantage – how the firm will win (the means)
Example: Ryanair strategy statement:
“The strategy of Ryanair is to achieve the lowest-cost position in the airline industry so that it
can offer the lowest fares to price-conscious European travellers, by means of spartan
service, high capacity utilization, and high-powered incentives.”
o Objective: achieve lowest-cost position in the airline industry.
o Scope:
Who: price-conscious European travellers
Where: European short-haul
What: low-fare air transport
How: spartan service + high capacity utilization + high-powered incentives
o Advantage: cost leadership (lowest fares)
4. Characteristics of a good strategy
A good strategy has three characteristics:
1) Uniqueness: be different from competitors what you do and/or how you combine the
elements of your business.
2) Trade-offs: choose what NOT to do:
Serving one position well means deliberately giving up another.
Productivity frontier = curve of max value deliverable at a given
cost.
y-axis: nonprice buyer value delivered.
x-axis: relative cost position.
Frontier curve = state of best practice.
Shows trade-offs visually. Along the curve: more value =
more cost.
Impossible to be at high value & low cost at the same time.
3) Fit: activities reinforce each other = Coherence (now) + Consistency (over time): 4
, o Coherence = decisions fit together at one point in time.
o Consistency = decisions remain aligned over time.
o Hard because decisions are interdependent:
Internal coordination (between decisions inside the firm):
Decisions must align with each other (fit & trade-offs).
Some are hard to reverse commitment effect (ex. size of investment or
timing of the decision).
External interdependence (with players outside the firm):
Reactions of competitors, suppliers, customers, complementors,…
Especially important when there are few players.
Managing both is what produces fit!
5. Which decisions are strategic?
Strategic decision = a decision is strategic if it is investigated or announced as part of the
optimal strategy.
Why strategy is valuable?
Inside a firm, different decisions are made by different people (ex. Product Dev,
Marketing, Operations,…).
Each person, left alone, picks the option that’s best for their own area.
BUT decisions are often complements they create extra value when they’re aligned
with each other.
Ex.: a premium product only works if marketing positions it premium and operations
delivers premium quality.
Without communication, each person picks locally alignment is lost value left on
the table.
The strategist’s job = announce which decision everyone should align around !
! Strategy is valuable when alignment / coordination is needed ! (if decisions were
independent, strategy would add nothing)
What makes a decision the right one to announce as strategic?
High own value (you want this decision picked anyway).
AND strong “pulling power” on other decisions (other areas will align with it because it
raises their value too).
Further insights: 5
B. Cassiman
Lecture notes and syllabus summary
Academic Year 2025–2026
1
,1) What is Strategy?
2
,1. Important Characteristics
Competitive landscape = the industry context in which the firm competes (rivals, market
structure, profitability levels).
Industry value system = vertical chain of players through which value flows from raw
inputs to end users.
Competitive advantage = a firm has a competitive advantage when it has driven a wider
wedge between willingness to pay and costs than its competitors have achieved.
Product and customer scope = the What and Who dimensions of strategy: which products
to offer, to which customers.
Geographical scope = the Where dimension: which regions the firm operates in.
Activities = the concrete tasks the firm performs to deliver its value proposition.
Resources = the firm’s tangible and intangible stock of assets.
Capabilities = the firm’s ability to deploy resources in activities.
Business model = how the firm captures value from its activities (revenue model + cost
model).
Corporate strategy = strategy for a multi-business firm: which activities are integrated
across business units (group level) vs. kept individual (BU level).
Corporate social responsibility (CSR) = the firm’s obligation / contribution to society
beyond pure profitability strategy is not only profit!
2. Definition
Strategy = The choice of a future for the organization and of a way to reach that future,
understood as the framework that coordinates, unifies and integrates the company's decisions
and actions, positioning a business in an industry so as to generate superior financial returns
over the long run.
Three building blocks:
Choice – strategy is a deliberate selection among options.
Future – strategy is forward-looking, multi-year horizon.
Framework – strategy is a structure that holds many decisions together.
Integrates – strategy unifies different parts of the firm into a coherent whole.
Closing condition: positions a business in an industry so as to generate superior financial
returns over the long run the performance test of any strategy.
3. Strategy statement 3
,A strategy statement has three elements (all required):
1) Objective – the goal / the ends
2) Scope – the domain in four dimensions: What, Who, Where, How.
3) Competitive advantage – how the firm will win (the means)
Example: Ryanair strategy statement:
“The strategy of Ryanair is to achieve the lowest-cost position in the airline industry so that it
can offer the lowest fares to price-conscious European travellers, by means of spartan
service, high capacity utilization, and high-powered incentives.”
o Objective: achieve lowest-cost position in the airline industry.
o Scope:
Who: price-conscious European travellers
Where: European short-haul
What: low-fare air transport
How: spartan service + high capacity utilization + high-powered incentives
o Advantage: cost leadership (lowest fares)
4. Characteristics of a good strategy
A good strategy has three characteristics:
1) Uniqueness: be different from competitors what you do and/or how you combine the
elements of your business.
2) Trade-offs: choose what NOT to do:
Serving one position well means deliberately giving up another.
Productivity frontier = curve of max value deliverable at a given
cost.
y-axis: nonprice buyer value delivered.
x-axis: relative cost position.
Frontier curve = state of best practice.
Shows trade-offs visually. Along the curve: more value =
more cost.
Impossible to be at high value & low cost at the same time.
3) Fit: activities reinforce each other = Coherence (now) + Consistency (over time): 4
, o Coherence = decisions fit together at one point in time.
o Consistency = decisions remain aligned over time.
o Hard because decisions are interdependent:
Internal coordination (between decisions inside the firm):
Decisions must align with each other (fit & trade-offs).
Some are hard to reverse commitment effect (ex. size of investment or
timing of the decision).
External interdependence (with players outside the firm):
Reactions of competitors, suppliers, customers, complementors,…
Especially important when there are few players.
Managing both is what produces fit!
5. Which decisions are strategic?
Strategic decision = a decision is strategic if it is investigated or announced as part of the
optimal strategy.
Why strategy is valuable?
Inside a firm, different decisions are made by different people (ex. Product Dev,
Marketing, Operations,…).
Each person, left alone, picks the option that’s best for their own area.
BUT decisions are often complements they create extra value when they’re aligned
with each other.
Ex.: a premium product only works if marketing positions it premium and operations
delivers premium quality.
Without communication, each person picks locally alignment is lost value left on
the table.
The strategist’s job = announce which decision everyone should align around !
! Strategy is valuable when alignment / coordination is needed ! (if decisions were
independent, strategy would add nothing)
What makes a decision the right one to announce as strategic?
High own value (you want this decision picked anyway).
AND strong “pulling power” on other decisions (other areas will align with it because it
raises their value too).
Further insights: 5
