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Lecture 7

GMS 200 Lecture Notes - Lecture 7: Incrementalism, Retail, Swot Analysis

Global Management Studies
Course Code
GMS 200
Shavin Malhotra

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GMS chapter 7
Competitive Advantage - The ability to do something so well that one outperforms competitors
Sources of Competitive Advantage:
- Cost and Quality
- Knowledge and Speed
- Barriers to Entry
- Financial Resources
Sustainable Competitive Advantage- The ability to outperform rivals in ways that are difficult or costly to imitate
Strategic Management- Process of formulating and implementing strategies
Strategic Analysis - Analyzing the organization, environment, competitive position and current strategies
Strategy Formulation- Crafting strategies to guide the allocation of resources
Strategy Implementation- Putting strategies into action
Stakeholders- Individuals and groups directly affected by the organization and its strategic accomplishments
Strategic Constituencies- assesses interests of stakeholders and how well the organization responds to them
SWOT Analysis- Examines organization's Strengths and Weaknesses (internal), and, Opportunities and Threats (external)
Monopoly- one player within the industry (ideal)
Oligopoly- few competitors (realistic)
Hyper-Competition - several direct competitors (realistic)
Porter's Five Force Model:
1. Industry Competition- Rivalry among firms in the industry and how they behave competitively toward one another
2. New Entrants- The threat of new competitors entering the market, based on the presence/absence of entry barriers
3. Substitute products/services- The threat of substitute products/services, based on the consumer's expectations from sellers
4. Supplier power- The influence resource suppliers have on the price of products/services
5. Buyer power- The influence customers have on the price that they will pay for the products/services
Corporate-Level Strategies
Grand or Master Strategies:
Growth- expansion of operations
Stability- maintains current operations. No substantial changes
Renewal- tries to solve problems and overcome weaknesses that hurt performances
Liquidation- operations cease and assets are sold to pay creditors
Combination- pursues growth, stability, and/or retrenchment in some combination
Growth and Diversification Strategies:
Concentration- is growth within the same business area
Diversification- growth by acquisition/investment in new and different business areas
Vertical Integration- Growth by acquiring suppliers or distributors
Restructuring Strategies:
Restructuring- Changes the mix or reduces the scale of operations
Turnaround- Strategy tries to fix specific performance problems
Downsizing- Strategy decreases the size of operations
Divestiture- Sells off parts of the organization to refocus attention on core business areas
Global Strategies:
Globalization Strategy- Adopts standardized products and advertising for worldwide use
Multi-domestic Strategy- Customizes products and advertising to best fit local needs
Transnational Strategy- Seeks efficiencies of global operations with attention to local markets
Strategic Alliance- Organizations join together in partnership to pursue an area of mutual interest
Co-opetition- Working with rivals on projects of mutual benefit
E-business Strategies:
E-business strategy- Uses the Internet to gain competitive advantage
B2B strategy- Uses IT and web portals to link organizations vertically in supply chains
B2C strategy- Uses IT and web portals to link businesses with customers
Strategic Portfolio Planning:
Portfolio planning- approach seeks the best mix of investments among alternative business opportunities
Boston Consulting Group (BCG) Matrix - analyzes opportunities according to market growth rate and market share
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