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GMS. chap 7 notes.doc

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Department
Global Management
Course
GMS200
Professor
Ashley Scarlett
Semester
Winter

Description
Chapter 7: Strategy and Strategic Management STRATEGIC MANAGEMENT Competitive Advantage: Competitive Advantage: is the ability to do something so well that one outperforms competitors Sustainable Competitive Advantage: is the ability to outperform rivals in ways that are difficult or costly to imitate *google formula for competitive advantage* Strategy and Strategic Intent: Strategy: is a comprehensive plan guiding resource allocation to achieve long-term org. goals Strategic Intent: focuses and applied org.’al energies on a unifying and compelling goal Levels of Strategy: 1. Corporate-Level strategy: sets long-term direction for the total enterprise 2. Business-Level strategy: identifies how a division or strategic business unit will complete its product or service do- main 3. Functional strategy: guides activities within one specific area of operations The Strategic Management Process Strategic Management: is the process of formulating and implementing strategies 1. Strategic analysis: is the process of analyzing the org., the environment and the org.’s competitive position and current strategies 2. Strategy formulation: is the process of crafting strategies to guide the allocation of resources (peter drucker 5 q’s) 3. Strategy implementation: is the process o putting strategies into action ESSENTIALS OF STRATEGIC ANALYSIS 1 Analysis of Mission, Values and Objectives: Mission and Stakeholders: Mission: statement expresses the org.’s reason for existence in society Stakeholders: are individuals and groups directly affected by the org. and its strategic accomplishments Strategic Constituencies Analysis: assesses interests of stakeholders and how well the org. is responding to them Core Values: Core Values: are broad beliefs about what is or is not appropriate behavior Organizational Culture: is the predominant value system for the org. as a whole Objectives: Operating Objectives: are specific results that org.’s try to accomplish Typical Operating Objectives of a bus.: • Profitability • Financial health • Cost efficiency • Customer service • Product quality • Market share • Human talent • Innovation • Social responsibility Swot Analysis of Organization and Environment: SWOT Analysis: examines org.al strengths and weaknesses and environmental opportunities and threats Organizational Strengths and Weaknesses • SWOT analysis begins with a systematic evaluation of org.‘s strengths and weaknesses Core Competency: is a special strength that gives an organization a competitive advantage • found in special knowledge or expertise, superior technologies • Org.al weaknesses need to be identified, plans need to be set to eliminate them, or to possibly turn them into strengths. Environmental Opportunities and Threats • SWOT analysis is complete until opportunities and threats in the external environment are also analyzed. • emergence of new competitors, resource scarcities, changing customer tastes, new government regulations etc. Analysis of Rivalry and Industry Attractiveness: Porter's Five Forces Model 1. Industry competition 2. New entrants 3. Substitute products or services 4. Bargaining power of suppliers 5. Bargaining power of customers Industry Attractiveness 2 Unattractive industry: is one in which rivalry among competitors is intense, substantial threats exist in the form of possi- ble new entrants and substitute products, and suppliers and buyers are very powerful in bargaining over such things as prices and quality. Attractive industry: has less existing competition, few threats from new entrants or substitutes, and low bargaining power among suppliers and buyers CORPORATE-LEVEL STRATEGY FORMULATION Grand or Master Strategies: Growth Strategy: inv
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