ADMS 1000 Lecture Notes - Cost Leadership, Starbucks, Second Cup

• School: York University
• Department: Administrative Studies
• Course: ADMS 1000
• Professor: Peter Tsasis

Document Summary

Strategic management is the analysis, decisions, implementation and evaluations a firm undertakes in order to create and sustain its competitive advantage. Industry: a group of firms that share a similar resource requirement. The five forces model (michael porter): systematically assess the industry environment: threats of new entrants: new startups and diversification of existing firms can obtain market share and resources, which will bid, down prices and reduce profitability. Lack of differentiation or switching costs: customer choices are based on price and service. Numerous/equally balanced competitors: when firms are smaller they tend to be more competitive because they target markets with similar resources. High exit barriers: fixed costs, special assets, commitment and social pressures keep firms in business. This model lacks because it does not take in technological change and government regulations, it also lacks on the power of relationships between each force.