1 - Strategic Management & Strategic Competitiveness Flashcards
strategy
integrated + coordinated set of commitments/actions designed to:
- exploit core competencies
- gain a competitive advantage
above average returns (AAR)
returns in excess of what investor expects in comparison to other investments with similar risk
strategic management process (SMP)
full set of commitments/actions required for a firm to achieve:
- above average returns (AAR)
- strategic competitiveness (when firm creates value creating strategy)
competitive landscape (CL)
- VUCA (volatile, uncertain, complex, ambiguous)
- BANI (brittle, anxious, nonlinear, incomprehensible)
- industry boundaries = blurred
- scarce financial capital
- hyper-competition
- economies of scale, advertising not so effective, SDG goals, more managerial flexibility
- main drivers: technology, global economy + financial crisis
impact of global economy on CL
globalization increased economic interdependence among countries
- as reflected in the flow of goods/services, financial capital + knowledge across country borders
impact of technology on CL
technology diffusion:
- speed to market may be primary CA
- perpetual innovation = shorten product life cycles
- quicker R&D
disruptive technology that:
- destroy value of current tech
- create new markets
from information age to digital revolution (AI, IT, big data…)
- firms that can’t keep up are at a disadvantage
increasing knowledge (allow for strategic flexibility)
industrial organizational model of AAR
explains dominant influence of the external environment on firm’s actions + performance:
- study external environment
- find attractive industry (using 5 Forces)
- strategy formulation
- develop assets + skills
- strategy implementation
- superior returns
resource based model of AAR
(unique) internal resources/capabilities are the basis of strategy + ability to generate AAR
- identify resources (physical, human, organizational capital)
- determine firm’s capabilities
- determine CA
- find attractive industry
- strategy formulation + implementation
- superior returns
vision vs mission
vision: foundation for mission
- picture of where they want to be in the future (broad)
mission: more concrete
- specifies businesses it intends to compete + customers it intends to serve
stakeholders
can affect (or are affected by) by performance of a firm
- capital market: shareholders + banks…
- product market: customers + suppliers + communities…
- organizational: employees
strategic leaders
use the strategic management process (SMP) to help the firm reach its vision + mission
- form + sustain organizational culture
they must be:
- grounded in ethical intentions + behaviors
- thorough in their analyses
- brutally + consistently honest
- collaborative with others to select + implement strategies
strategic flexibility
capabilities used to respond to demands + opportunities existing in uncertain competitive environments
