Chapter One - Strategic Management and Strategic Competitiveness

Stakeholders

can affect the firm's vision and mission, are effected by strategic outcomes achieved, and have enforceable claims on the firm's performace

Strategic flexibility

a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment

Competitive advantage

the unique set of features of a company and its products that are perceived by the target market as significant and superior to the competition

Vision

Future oriented picture of what the firm wants to be and achiee

Strategic Process

1. External/Internal Analysis 2. Develop Strategy 3. Implement strategy at a business/corporate level

Resource Based Model of Above-Average Returns

1. Identify the firm's resources. Study its strengths and weaknesses compared to competitors 2. Determine the firm's capabilities. 3. Determine the potential of firm's resources and capabilities in terms of competitive advantage. 4. Locate an attractive industry 5. Select a strategy that best allow the firm to utilize its resources and capabilities in terms of a competitive advantage.

I/O Model of Above-Average Returns

1. study the external environment(general, industry, competitor), especially the industry environment 2. locate an industry with high potential for above average returns. 3. identify the strategy called for by the attractive industry to earn above average returns. 4. develop or acquire assets and skills needed to implement the strategy. 5.use the firms strengths to implement the strategy.

Mission

Answers the questions: What is the purpose of the firm? What value will the firm create? For whom will value be created?

Strategic Management Process

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

Strategic Competiveness

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

Above average returns

returns in excess of what is expected in comparison to another with similar risk

Risk

uncertainty about a particular investment