Chapter 7 gms.docx

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Chapter 7: Strategy and Strategic Management
GMS Notes
Competitive advantage the ability to do something so well that one outperforms competitors
- typical sources of competitive advantage include cost and quality, knowledge and
speed, barriers to entry and financial resources
Sustainable competitive advantage ability to outperform rivals in ways that are difficult or costly to imitate
Strategy a comprehensive plan guiding resource allocation to achieve long term organization goals
Strategic intent focuses and applies organizational energies on a unifying and compelling goal
There are three levels of strategy: corporate, business and functional
Corporate strategy sets long term direction for the total enterprise (ex. growth and diversification strategies,
restructuring strategies, global strategies, e-business strategies, cooperative strategies)
Business strategy identifies how a division or strategic business unit will compete in its domain
Functional strategy guides activities within one specific area of operations (supports business strategies)
Strategic management process of creating and implementing strategies
Strategic Analysis process of analyzing the organization, the environment, and the organization’s
competitive position and current strategies
Strategy formulation the process of creating strategies to guide the allocation of resources
Strategy implementation process of putting strategies into action
Mission statement expression of the organization’s reason for existence in society
Stakeholders individuals and groups directly affected by the organization and its strategic accomplishments
Strategic constituencies analysis assesses interests of stakeholders and how well the organization is
responding to them
Employees we respect the
individuality of each employee
Communities we are committed to
being caring and supportive corporate
Shareholders we are dedicated to
performing in a manner that will
enhance returns on investments
Customers we are committed to
providing superior value in our
products and services
Suppliers we think of our suppliers
as partners who share our goal
External stakeholders as strategic
constituencies in an organization’s
mission statement
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