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Lecture 7

GMS 200 Lecture Notes - Lecture 7: Strategic Management, Competitive Advantage, Customer Relationship Management


Department
Global Management Studies
Course Code
GMS 200
Professor
Horatio Morgan
Lecture
7

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Chapter 7 Strategy and Strategic Management
Strategy in a World of Globally Competitive Business
What enables some firms to achieve and sustain above-average profitability while others struggle?
What do e ko aout iig ad losig opaies?
Do the winners always have:
More money?
Sometimes with money, we chase ideas
Better employees?
Can be skilled employees working towards a bad product
Better technology?
What sepaates the ies fo the loses?
The winners most likely have a more effective strategy
what is strategy?
Strategy to understand strategy, you have to understand the notion of competitive
advantage
Competitive advantage
It is operating with an attribute or combination of attributes that allows it to outperform
its competitors
“oethig that you hae is uiue, aluale that opetitos do’t hae
The key sources of competitive advantage are:
Cost and quality where strategy drives an emphasis on operating efficiency and product or service
quality
Maybe you have a connection to a cheaper source?
Provide 2 companies the same budget, but one company would be superior to the other
Knowledge and speed where strategy drives an emphasis on innovation and speed of delivery to
market for new ideas
Speed can kill in the in example of Note 7 (rushed to the market and caused explosions)
Barriers to entry where strategy drives an emphasis on creating a market stronghold that is
protected from entry by others
Financial resources where strategy drives an emphasis on investments or loss absorption that
opetitos a’t ath
Not a leading competitive advantage
Everyone can have access to extra money
Technology where strategy drives an emphasis on using technology to gain operating efficiencies,
market exposure, or customer loyalty
Competitive advantage for small businesses:
Owner himself/herself is the key source (knowledge, connections)
Sustainable Competitive Advantage
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Competitive advantage will enable the company to generate above-average profits if the source of
the advantage is:
Too difficult or costly for competitors to imitate
Basics of Competition
Firms basically compete against their rivals by either:
Offering the same products at below-average prices
Offering different products at above-average prices
Bringing everything together strategy is:
A comprehensive plan of action that identifies the long-term direction for an organization and
guides esoue utilizatio to aoplish a ogaizatio’s goals ith sustaiale opetitie
advantage
Strategy at different levels
Corporate strategy
In what industries should we compete?
Which competitor should we acquire?
merge
Business strategy
How will we compete for customers in industry A (i.e. grocery)?
What bundle of products or services should we offer?
Strategic Management Process
The major responsibilities of the strategic management process include:
A. Strategy formulation
B. Strategy implementation
C. Strategy design
D. A and B
E. B and C
As part of the strategic management process, strategy formulations involves ____.
A. Identifying and analyzing the existing mission, objectives, and strategies
B. Analyzing the industry and external environment as well as organization resources and
capabilities
C. Revising the mission and objectives and selecting new strategies
D. All of the above
E. None of the above
As part of the strategic management process, strategic implementation involves ____.
A. Corporate governance, management systems and practices, and strategic leadership
B. Exercising strategic control
C. Review of the strategic management process
D. B and C
E. A, B, and C
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