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Lecture

Week 7

11 Pages
63 Views

Department
Global Management Studies
Course Code
GMS 200
Professor
Robert Hudyma

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Strategic Competitiveness
Competitive Advantage – comes from operating in successful ways that are different to imitate
-Sustainable competitive advantage – is one that is difficult for competitors to imitate
Whats a strategy?
Strategy – is a comprehensive pan guiding resource allocation to achieve long-term organization
goals with sustain competitive advantage
-Focuses on competitive environment and represents a “best guess what must be done
to ensure future success in the face of rivalry, even as conditions change
Strategic Intent – focuses and applies organizational energies on a unifying and compelling goal
-Example: Coca Cola, strategic intent isTo put a Coke within the arms of every
consumer in the world”
Strategic Management
Strategic Management – is the process of formulating and implementing strategies to
accomplish long-term goals and sustain competitive advantage
-The essence of strategic management is looking ahead , understanding the
environment and the organizations, effectively positioning the organization for
competitive advantage in changing times and then achieving them
Strategic Management goals
-Michael Porter argues that the ultimate goal for any business should be profitability
-This creates value for investors in the forms of
Above –average returns – returns the exceed what an investor could earn by investing in
alternative opportunities of equivalent risk
Businesses compete in environments that vary in the following ways.
www.notesolution.com
Monopoly environment – only one player, no competitors
-Creates absolute competitive advantage that delivers sustainable and even excessive
business profits
Oligopoly environment – contain few players who compete against one another
-Sustain long-term competitive advantage within defined market segment
-In the absence of competition within these segments, they can also reap excessive
business profits
Environment of Hyper competition – in which there are at least several players who directly
compete with one another
-Since the competition is direct and intense, any competitive advantage that is realized
is temporary
-Successful strategies are often copied and the firms must continue to find new
strategies that deliver new sources of competitive advantage, even while trying to
defend existing ones.
-In hyper competition there always winner and losers
-Business profits can be attractive but intermittent.
The Strategic Management Process
There are two major responsibilities of the strategic management process:
Strategic Formulation – is the process of creating strategies
-Identify and analyze current:
oMission, Objectives and Strategies
-Analyze internal and external environments
www.notesolution.com
oOrganizational resources and capabilities (strength and weakness)
oIndustry and external environment (Opportunities and Threats)
-Revise mission and objectives and selects new strategies:
oCorporate, Business and Functional
Five strategic questions:
-What is our business mission?
-Who are our customers?
-What do our customers consider “value”?
-What have been our results
-What is our plans?
Strategy Implementation – is the process of putting the strategies in action
-Implement strategies
oCorporate governance, Management systems and practices and Strategic
leadership
-Evaluate Results:
oStrategic control
oRenew strategic management process
Analysis of Mission, Values and Objectives
Mission – is the organizations reason for existence in society
-What are we moving to? What is our dream? What kind of a difference do we want to
take in the world? What do we want to known for?
A good mission statement identifies the domain which the organization intends to operate -
including the customers it intends to serve, the products and/or services it intends to provide, and
the location in which it intends to operate
-The mission statement should also communicate the underlying philosophy that will
www.notesolution.com

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Description
Strategic Competitiveness Competitive Advantage – comes from operating in successful ways that are different to imitate - Sustainable competitive advantage – is one that is difficult for competitors to imitate What’s a strategy? Strategy – is a comprehensive pan guiding resource allocation to achieve long-term organization goals with sustain competitive advantage - Focuses on competitive environment and represents a “best guess” what must be done to ensure future success in the face of rivalry, even as conditions change Strategic Intent – focuses and applies organizational energies on a unifying and compelling goal - Example: Coca Cola, strategic intent is “To put a Coke within the arms of every consumer in the world” Strategic Management Strategic Management – is the process of formulating and implementing strategies to accomplish long-term goals and sustain competitive advantage - The essence of strategic management is looking ahead , understanding the environment and the organizations, effectively positioning the organization for competitive advantage in changing times and then achieving them Strategic Management goals - Michael Porter argues that the ultimate goal for any business should be profitability - This creates value for investors in the forms of Above –average returns – returns the exceed what an investor could earn by investing in alternative opportunities of equivalent risk Businesses compete in environments that vary in the following ways. www.notesolution.com Monopoly environment – only one player, no competitors - Creates absolute competitive advantage that delivers sustainable and even excessive business profits Oligopoly environment – contain few players who compete against one another - Sustain long-term competitive advantage within defined market segment - In the absence of competition within these segments, they can also reap excessive business profits Environment of Hyper competition – in which there are at least several players who directly compete with one another - Since the competition is direct and intense, any competitive advantage that is realized is temporary - Successful strategies are often copied and the firms must continue to find new strategies that deliver new sources of competitive advantage, even while trying to defend existing ones. - In hyper competition there always winner and losers - Business profits can be attractive but intermittent. The Strategic Management Process There are two major responsibilities of the strategic management process: Strategic Formulation – is the process of creating strategies - Identify and analyze current: o Mission, Objectives and Strategies - Analyze internal and external environments www.notesolution.com o Organizational resources and capabilities (strength and weakness) o Industry and external environment (Opportunities and Threats) - Revise mission and objectives and selects new strategies: o Corporate, Business and Functional Five strategic questions: - What is our business mission? - Who are our customers? - What do our customers consider “value”? - What have been our results - What is our plans? Strategy Implementation – is the process of putting the strategies in action - Implement strategies o Corporate governance, Management systems and practices and Strategic leadership - Evaluate Results: o Strategic control o Renew strategic management process Analysis of Mission, Values and Objectives Mission – is the organizations reason for existence in society - What are we moving to? What is our dream? What kind of a difference do we want to take in the world? What do we want to known for? A good mission statement identifies the domain which the organization intends to operate - including the customers it intends to serve, the products and/or services it intends to provide, and the location in which it intends to operate - The mission statement should also communicate the underlying philosophy that will www.notesolution.com guide employees in these operates Stakeholders – are individuals and groups of people who are directly affected by the organization and its accomplishments - Include, customers, supplies, shareholders, employees and communities - In the strategic management process, the stakeholders test can be done as a strategic constituencies analysis Core Values Organizational Culture – is the system of shared beliefs and values that guides behaviour in organizations - Strong core values help organizations build institutional identity - Shared values help guide the behaviour of organizations members in meaningful and consistent ways Objectives Operating Objectives – are specific results that organizations try to accomplish - Are short-term targets against which actual performance results can be measured as indicated of process and continuous improvements According to Peter Drucker, the operating objectives of a business might include the following: - Profitability – producing at a net profit on business - Market Share – gaining and holding a specific market share - Human Talent – recruiting and maintaining a high-quality workforce - Financial Health – acquiring capital; earning positive returns - Cost efficiency – using resources well to operate at low cost - Product Quality – producing high-quality good or service - Innovation – developing new products and/or processes - Social Responsibility – making a positive contribution to society www.notesolution.com Analysis of organizational resources and capabilities SWOT analysis – examines organizational strengths and weakness and environment opportunities and threats Internal Organizations - What are our strengths? o Manufacturing efficiency, skilled workforce, good market share, strong financial and superior reputation - What are our weaknesses? o Outdated facilitates, inadequate research and development, obsolete technologies, weak management, past planning failures, new government regulations, changing customer taste External Organizations - What are our opportunities? o Possible new markets, strong economy, weak market rivals, emerging technologies and growth of existing market - What are our threats? o New competitors, shortage of weakness, change market tastes, new regulations and substitute products Core competency – is a special strength that gives an organization strength that gives an organization competitive advantage - They are capabilities that virtue of being rare, costly to imitate, and non- substitutable , become viable sources of competitive advantage - Can be found in special knowledge or expertise, superior technologies, efficient manufacturing technologies, or unique product distribution systems, among many other possibilities www.notesolution.com Analysis of Industry and Environment - Can be found among Marcoenvironment factors such as technology, government, social structures, population demographics, the global economy and the natural environment - They also include the industry environment of resource suppliers, competitors and customers 1) Industry competit
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