MGT 30220 Final: Strategic Management Study Guide Part 1
Strategic Management Study Guide
Introduction to Strategic Management:
• Analysis of Airline Industry:
o As of 2016:
▪ Operating profit/loss has remained STABLE over the years even though
operating revenue and expenses have been increasing
• Profitability is at its highest point yet as a result of low oil prices,
economic growth, and passenger demand
▪ Operating margins were expected to rise for firms in this industry
• What is Strategy According to Michael Porter? What Does Porter Mean When He
Distinguishes between Strategy and Operational Effectiveness?
o Strategy =
▪ the creation of a unique valuable position, involving a different set of
activities
▪ distinct from operational effectiveness, requires trade-offs, and involves
creating fit among activities
▪ Key premises:
• 1. There is more than one valuable position in an industry
• 2. A valuable position will attract imitators
• 3. Trade-offs and fit help to protect against imitators
o 1. Operational Effectiveness is NOT strategy.
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