Strategic Management (Exam 1) Ch 3
Competitive intelligence (CI)
3. Realize that the adage "If it's not broke, don't fix it" has been replaced by "Whether it's broke or not, fix it"; in other words, continually strive to improve everything about the firm.
Competitive intelligence (CI)
4. Continually adapt, innovate, improve—especially when the firm is successful. 5. Strive to grow through acquisition whenever possible. 6. Hire and retain the best employees and managers possible. 7. Strive to stay cost-competitive on a global basis.
Industrial Organization (I/O)
An approach to competitive advantage that advocates that external (industry) factors are more important than internal factors for a firm in striving to achieve competitive advantage.
External forces
External forces can be divided into five broad categories: (1) economic forces; (2) social, cultural, demographic, and natural environment forces; (3) political, governmental, and legal forces; (4) technological forces; and (5) competitive forces.
Potential Development of Substitute Products
In many industries, firms are in close competition with producers of substitute products in other industries.
Competitive intelligence (CI)
Seven characteristics describe the most competitive companies: 1. Strive to continually increase market share. 2. Use the vision/mission as a guide for all decisions.
Social, Cultural, Demographic, and Natural Environment Forces
Social, cultural, demographic, and environmental changes impact strategic decisions on virtually all products, services, markets, and customers.
Business analytics
Sometimes called predictive analytics, machine learning, or data mining, this software enables a researcher to assess and use the aggregate experience of an organization, which is a priceless strategic asset for a firm.
chief information officer (CIO)
The CIO is more a manager, managing the firm's relationship with stakeholders
Competitive intelligence (CI)
Various legal and ethical ways to obtain competitive intelligence include the following: • Hire top executives from rival firms. • Reverse engineer rival firms' products. • Use surveys and interviews of customers, suppliers, and distributors.
Potential Entry of New Competitors
Whenever new firms can easily enter a particular industry, the intensity of competitiveness among firms increases.
Bargaining Power of Suppliers
affects the intensity of competition in an industry, especially when there are few suppliers, when there are few good substitute raw materials, or when the cost of switching raw materials is especially high.
Competitive intelligence (CI)
as formally defined by the Society of Competitive Intelligence Professionals (SCIP), is a systematic and ethical process for gathering and analyzing information about the competition's activities and general business trends to further a business's own goals (SCIP website).
Sources of External Information Unpublished sources
include customer surveys, market research, speeches at professional and shareholders' meetings, television programs, interviews, and conversations with stakeholders.
Business analytics
is an MIS technique that involves using software to mine huge volumes of data to help executives make decisions.
Rivalry Among Competing Firms
is usually the most powerful of the five competitive forces. The strategies pursued by one firm can be successful only to the extent that they provide competitive advantage over the strategies pursued by rival firms.
Sources of External Information Published sources
of strategic information include periodicals, journals, reports, government documents, abstracts, books, directories, newspapers, and manuals.
chief technology officer (CTO)
the CTO is more a technician, focusing on technical issues such as data acquisition, data processing, decision-support systems, and software and hardware acquisition.
According to Porter, a Harvard Business School professor,
the nature of competitiveness in a given industry can be viewed as a composite of five forces: 1. Rivalry among competing firms 2. Potential entry of new competitors 3. Potential development of substitute products 4. Bargaining power of suppliers 5. Bargaining power of consumers
Competitive intelligence (CI)
• Conduct drive-by and on-site visits to rival firm operations. • Search online databases. • Contact government agencies for public information about rival firms. • Systematically monitor relevant trade publications, magazines, and newspapers.
