ADMS 1000 Chapter Notes - Chapter 5: Strategic Management, Sunk Costs, Bargaining Power

• School: York University
• Department: Administrative Studies
• Course: ADMS 1000
• Professor: Len Karakowsky

Document Summary

Strategic management includes external (5-forces) and internal (vrio) models for explaining differential firm performance. Business (3 generic) and corporate-level (diversification) strategies. The analyses, decisions and implementations a firm undertakes to create and sustain its competitive advantage. Why are some firms successful than others: strategic management attempts to explain differential performance. External and internal models for explaining competitive advantage. External environment (industry) porter"s 5 forces model. Overall, the five-forces model provides managers with an assessment of the industry structure to help get some sense of industry attractiveness: threats of new entrants (how existing companies defend) Existing industries must create barriers to entry: Economies of scale: new entrants = lower prices. Existing companies need to produce more to decrease price = threat decreased. Capital requirements: start-up capital increase = decrease threats. Access to distribution channels: defer entry b/c: existing company control dist. Cost disadvantages unrelated to scale: not related to econ factors (patents, trademarks, trade secrets, bargaining power of suppliers.