Introduction Flashcards
The full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns
Strategic Management Process
is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage
Strategy
Achieved when a firm implements a strategy that creates superior value for customers and
that competitors are unable to duplicate or find it too costly to try to imitate.
Competitive Advantage
Achieved when a firm successfully formulates and implements a value-creating strategy
Strategic Competitiveness
Occurs when a firm develops a strategy that competitors are not simultaneously implementing
Provides benefits which current and potential competitors are unable to duplicate
Above-Average Returns
An investor’s uncertainty about the economic gains or losses that will result from a particular investment
Risk
Returns that are equal to those an investor expects to earn from other investments with a similar amount of risk
Average Returns
Dynamics of strategic maneuvering among global
and innovative combatants
Price-quality positioning, new
know-how, first mover
Protect or invade established product or geographic markets
Hyper competitive environments
Goods, services, people, skills, and ideas move freely across geographic borders.
Spread of economic innovations around the world.
Political and cultural adjustments are required.
Emergence of global economy
Increasing rate of technological change and diffusion
The information age
Increasing knowledge intensity
Rapid technological change
describes competition that is excessive such that it creates inherent instability and necessitates constant disruptive change for firms in the competitive landscape
Hyper Competition
Technology diffusion and disruptive technologies
The information age,
Increasing knowledge intensity.
Technology and Technological Changes
is one in which goods, services, people, skills, and ideas move freely across geographic Borders.
Global Economy
is the increasing economic interdependence among countries and their organizations as reflected in the flow of goods and services, financial capital, and knowledge across country borders
Globalization
A set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment
It involves coping with uncertainty and the accompanying risks
Strategic Flexibility
3 parts that comprises Strategic Flexibility
Organizational Slack
Strategic Reorientation
Capacity to learn
Give the 2 Alternative Models of Superior Returns
Industrial Organization Model
Resourced-based Model
Capacity of an integrated set of resources to integratively perform a task or activity
Capability
4 Attributes of Resources and Capabilities
Competitive Advantage
Valuable
Rare
Costly to Imitate
Nonsubstitutable
allow the firm to exploit opportunities or neutralize threats in its external environment
Valuable
possessed by few, if any, current and potential competitors
Rare
when other firms cannot obtain them or must obtain them at a much higher cost
Costly to Imitate
the firm is organized appropriately to obtain the full benefits of the resources in order to realize a competitive advantage
Nonsubstitutable
Resources and Capabilities that meet the 4 criteria become source of:
Core Competencies
Core Competencies are the basis for a firms:
Competitive Advantage
Strategic Competitiveness
Ability to Earn Above Average Returns
The key purpose of vision and mission statements:
is to inform stakeholders of what the firm is, what it seeks to accomplish, and who its seeks to serve.
is a picture of what the firm wants to be and, in broad terms, what it wants to
ultimately achieve.
Vision
points the firm in the direction of where it would like to be in the years to come
Vision
It specifies the businesses in which the firm intends to compete and the customers it intends to serve.
Mission
is more concrete than its vision
Mission
Together, the vision and mission provide the foundation that
the firm needs to choose and implement one or more strategies.
3 kinds of Stakeholders
Capital Market Stakeholder
Product Market Stakeholder
Organizational Stakeholder
Who are the Capital Market Stakeholder
Shareholders Major suppliers of capital Banks Private lenders Venture capitalists
Who are the Product Market Stakeholder
Primary customers
Suppliers
Host communities
Unions
Who are the Organizational Stakeholder
Employees
Managers
Nonmanagers
