Strategic Management and Strategic Competitiveness

Mission

A *mission* specifies the businesses in which the firm intends to compete and the customers it intends to serve.

Strategy

A *strategy* is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.

Above-average returns

*Above-average returns* are returns in excess of what an investor expects to earn from other investments with a similar amount of risk.

Average returns

*Average returns* are returns equal to those an investor expects to earn from other investments with a similar amount of risk.

Core competencies

*Core competencies* are capabilities that serve as a source of competitive advantage for a firm over its rivals.

Hypercompetition

*Hypercompetition* describes competition that is excessive such that it creates inherent instability and necessitates constant disruptive change for firms in the competitive landscape.

Organizational culture

*Organizational culture* refers to the complex set of ideologies, symbols, and core values that are shared throughout the firm and that influence how the firm conducts business.

Resources

*Resources* are inputs into a firm's production process, such as capital equipment, the skills of individual employees, patents, finances, and talented managers.

Risk

*Risk* is an investor's uncertainty about the economic gains or losses that will result from a particular investment.

Stakeholders

*Stakeholders* are the individuals, groups, and organizations that can affect the firm's vision and mission, are affected by the strategic outcomes achieved, and have enforceable claims on the firm's performance.

Strategic competitiveness

*Strategic competitiveness* is achieved when a firm successfully formulates and implements a value creating strategy.

Strategic flexibility

*Strategic flexibility* is a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment.

Strategic leaders

*Strategic leaders* are people located in different areas and levels of the firm using the strategic management process to select strategic actions that help the firm achieve its vision and fulfill its mission.

Vision

*Vision* is a picture of what the firm wants to be and, in broad terms, what it wants to ultimately achieve.

Capability

A *capability* is the capacity for a set of resources to perform a task or an activity in an integrative manner.

Global economy

A *global economy* is one in which goods, services, people, skills, and ideas move freely across geographic borders.

Competitive advantage

A firm has a *competitive advantage* when it 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.

Strategic management process

The *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.