bps ch 1 strategic management & strategic competitiveness

above average returns

are returns in excess of what an investor expects to earn from other investments with a similar amount of risk

strategic management process

is the full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above average returns.

what is bad about globalization ?

liability of foreignness, and customers expectations are likely to be much higher.

mission

mission specifies the business or businesses in which the firm intends to compete and the customers it intends to serve

resources

physical, human, and organizational capital

how do you build competitive advantage ? based on the resource base model

resources capability core competence

what are the five forces ?

supplies substitutes buyers potential entrants

resource based model

1. resources 2. capability 3. competitive advantage 4. an attractive industry 5. strategy formulation and implementation SUPERIOR RETURNS

4. What does the resource-based model suggest a firm should do to earn above-average returns?

. Above-average returns are earned when the firm uses its valuable, rare, costly-to imitate, and non substitutable resources and capabilities to compete against its rivals in one or more industries.

I/o assumptions

1. external environment imposes pressures that determine strategic choice 2. similarity in relevant resources causes competitors to pursue similar strategies 3.enage in profit maximizing behaviors 4.resource differences are short lived due to resource mobility across firms

what is hyper competition based on ?

1. global econ 2. tech 3. first movers advantage 4. price-quality positioning

the I/o model of above average returns

1. study external environment 2. locate industry with high potential for above average returns 3.identify the strategy need for above average returns in the industry 4. acquire or develop skills and assets needed to implement strategies 5 use firms strengths to implement the strategy

i/o model

1. the external environment 2. an attractive industry 3. strategy formulation 4. assets ans skills 5. strategy implementation SUPERIOR RETURNS

stakeholders

Stakeholders are those who can affect, and are affected by, a firm's strategic outcomes

3,. according to the I/O model, what should a firm do to earn above-average returns?

The logic supporting the I/O model suggests that above-average returns are earned when the firm locates an attractive industry or part of an industry and successfully implements the strategy dictated by that industry's characteristics. .

how do resources become core competencies

VRIN valuable rare costly to imitate nonsubstitutable

competitive advantage

a firm has this when it implements a strategy competitors are unable to duplicate or find too costly to try to imitate.

core competences

a source of competitive advantage

what is strategic competitiveness?

achieved when a firm successfully formulates and implements a value creating strategy

capability

an integrated set of resources

resources based model

assumes that each organization is a collection of unique resources and capabilities. INSIDE OUT MODEL

why is strategy relevant ?

because you want to obtain competitive advantage

porters five forces model

can be useful to tell you whether an industry is GOOD to enter or BAD assumption: assumes that all firms are within an industry are the same

operational effectiveness

doing the same thing as others but better. NOTE; this is not a strategy

what is good about globalization

increase interdependence among countries when considering goods/services and even knowledge

i/o model

industrial organization model of above average returns explains the external environments dominant influences on a firms strategic actions

I/o model

industry organization model focus on outside approach. looks at what is going on within an industry

what is strategy?

is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage, if its easily reversible its not that good of a strategy based on what a firm WILL DO AND WILL NOT DO by implementing a good strategy you hope to achieve competitive advantage

vision

is and enduring word picture of what the firm wants to be and expects to achieve in the future

what is todays competitive markets look like

the global economy globalization raid tech change important of knowledge and people

what is the global competitive landscape?

traditional way of doing business changed. you need speed, flexibility, and innovation.