Strategic Management
Terms
undefined, object
copy deck
- Factors inpacting competitive environment
-
Increase in globalization-peace between world powers, westernization of world, ease of flow of ideas, people, goods, and services
Increase in technological advances- increase in technological change, change in information and communication devices, and increase in importance of ideas - 5 tasks of strategic management
-
1. Develop strategic mission and vision
2. Set objectives
3. Develop strategy to meet objectives (business model)
4. Implement and execute strategy
5. monitor, evaluate, and make changes to model. - Difference between a vision and a mission
-
Mission focuses on current business activities (what we are doing now)
Vision focuses on future business paths (where we are going) - purpose of objectives`
- convert vision into action, prevent coasting by setting concrete benchmarks and performance targets.
- 2 kinds of objectives
-
Strategic- focuses on gaining long term competitive advantage in industry
FInancial- focuses on long term fnancial success
Unless in financial trouble or facing great risk, strategic usually stressed more to maintain momentum. - I/O Model of business
- Industrial Organization model- focuses on the extrenal envirionments of a business in the hopes of finding an attractive environment in which a strategy can be developed and implemented using a firms assets and skills in order to acheive superior returns
- Resource-based model
- Focuses on unique resources or capabilities of a company in order to find an attractive market to achieve superior returns.
- Levels of strategy-making-diverse company
-
Corporate
Business
Functional
Operational - Levels of strategy making-single-company business
-
COrporate/Business
Functional
Operating - corporate strategy should/involves
-
should- seek diversification, boost performace, find strategic fits, and develop investment priorities.
involves- repsonding to industrial changes, crafting competitive strategies, and building competencies and capabilities. - Porters 5 factors
-
Power of suppliers
Power of buyers
Threat of new entrants
Strength of Rivalry
Product substitutes - factors which decrease threat of new entrants
- High barrier of entry due to economies of scale, high capital requirements, product differentiation
- factors increasing power of buyers
- Many firms in market, little differentiation, makeup large portion of sales and revenue.
- factors increasing suppliers power
- controlled by a small number of suppliers, limited resources available, supply crucial to process
- factors increasing threat of substitutes
- Lower cost/higher quality option exsists, little switching cost neccesary
- factors increasing intensity of rivalry
- zero sum game industry, many competitors exist, high exit costs
- environmental segments
-
globalization
economics
politics/law
sociocultural
demographics
technology - Driving forces
-
Those forces that will have a true impact on a market over next 1-3 years
Impact should be analyzed - How should a firm deal with Porter's five forces?
- Firms should creat a strategy which insulates the 5 forces and creates a sustainable competitive advantage
- FIve Key Success Factors (KSF's)
-
1. Specific Strategic Elements
2. Product attributes
3. resources
4. Core Competencies
5. Competitive Capabilities - COmpetitive Advantage Triangle
-
Comeptitive Advantage
Strategic assets and market achievements
Core Competencies
COmpetitive Capabilities
COmapny Resources - Resources (def and two types)
-
What a company has
Intangible-human, reputation, innovation
Tangible- Technology, Financial, Organizational, Physical - Capabilities
-
What a company does
-consists of a company's ability to send resources to accomplish as pecific function and of employees abilities and knowledge - core competencies
-
what a company does that seperates it from other companys. This adds value and creates a competitive advantage.
Resources and capabilities. - 4 criteria for a sustainable comeptitive advantage
-
1. Rare
2. Valuable
3. Costly to imitate- due to history, ambiguous, or complex societal reasons.
4. Nonsubsitutable - Value Chain
- The process that takes a product from raw material to final customer
- Support activities in a value chain
-
1. Firm Infrastructure- activities relating to the entire value chain
2. human relation management- activities relating to company employees
3. technological development- activities which add value to a company's product or processes.
4. Procurement- the activities involved with obtaining a product's imputs. - Outsourcing-definition and three reasons for.
-
Purchasing some value creating activity from an outside supplier
1. Keeps a firm focused on other, more important areas.
2. Allows access to world class capabilities
3. Frees up needed capital.