17 Apr 2012
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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
MISSION
Employees – we respect the
individuality of each employee
Communities – we are committed to
being caring and supportive corporate
citizens
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