ADMS 1000 Chapter Notes - Chapter 9: Switching Barriers, Bargaining Power, Sunk Costs

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

Document Summary

Chapter 9: responding to the environment: developing business strategy. The analyses, decisions and implementations a firm undertakes to create and sustain its competitive advantage. Strategic management attempts to explain differential performance: external and internal models for explaining competitive advantage. Strategy is defined as the plans made or the action takes in an effort to help an organization/firm obtain its intended purposes. Industry; group of firms with similar resource requirements in raw materials, labor, technology, customers . The airline industry; west jet, air canada. The five-forces model attempts to evaluate the attractiveness of an industry, which helps us make strategic decisions in terms of how to achieve organization goals or to find a position in the industry. Incumbents must create barriers to entry; 5 major sources of entry barriers. Economies of scale: refer to spreading the costs of production over the number of units produced, can provide the incumbents cost advantages to compete with new entrants on the price if necessary.