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Chapter 7 Strategy & Strategic Management.docx

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Global Management Studies
GMS 200
Rodney Umrah

Chapter 7 Strategy and Strategic Management Strategic Management - Competitiveness is the ability and performance of an organization in the marketplace compared to other organizations that offer similar goods or services. Strategy - Action plan to achieve the mission - Functional areas have strategies - Strategies exploit opportunities and strengths, neutralize threats, and avoid weaknesses o Strategy development can lead companies to achieve a competitive advantage o Competitive advantage is the ability to do something so well that you outperform the competitors - A firm achieves competitive advantage when an attractive number of buyers are drawn to purchase its products or services rather than those of competitors. Typical sources of competitive advantage: - Cost & Qaulity o Operating efficiency can lead to lower cost o Ensure consistent quality and high performance - Knowledge & speed o Innovation o Speed of delivery - Barriers to Entry o Market stronghold that’s protected from entry by others ( telecommunications) - Financial resources o Investments that competitors cannot match Levels of Strategy - Corporate strategy o Company wide action plan to compete across markets and industries - Business strategy o Strategy for a single strategic business unit (SBU) - Functional strategy o Activities within one specific functional area Strategic Management Process - Whats the company’s present situation? o Industry conditions? Competitive pressures? The companys current market standing? Competitive strengths? Competitive weakneses? - What should the companys future direction be and what performance targets should we set? Discussion question: Can an organization have a good strategy and still fail to achieve competitive advantage? Essentials of strategic analysis Druckers strategic questions for strategy formulation??? Finish from chapter Stakeholders Core values o Strong core values Operating objectives Analysis of objectives Swot Analysis Porters Model of Five Strategic Forces Affecting Competition - Industry competition o The intensity of rivalry among firms and their competitive behavior - New entrants o The threat of new competitors entering the market - Substitute products or services o The threat of substitute products or services - Bargaining power of suppliers o The ability of resource suppliers to influence the cost of products or services - Bargaining power of customers o The ability of customers to influence the price they will pay for products or
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