Lecture #7 Notes.docx

6 Pages
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Department
Global Management Studies
Course Code
GMS 200
Professor
Bamidele Adekunle

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Description
Lecture #7 – Foundations of Strategic Competitiveness March 11, 2014 Basic Concepts of Strategy:  Competitive advantage.  Sustainable competitive advantage.  Strategy.  Strategy intent.  Strategic management. Environments and Competitive Advantage:  Monopoly: • Only one player and no competition. • Creates absolute competitive advantage.  Oligopoly: • Few players not directly competing against each other. • Long-term competitive advantage in defined market segment.  Hyper-Competition: • Several players directly competing against each other. • Any competitive advantage is only temporary. Strategy Formulation:  The process of creating strategy.  Involves assessing existing strategies, organizations, and environments to develop new strategies and strategic plans capable of delivering future competitive advantage. Strategic Question for Strategic Formulation:  What is our business mission?  Who are our customers?  What do our customers consider value?  What have been our results?  What is our plan? Strategic Management Process (for the steps, refer to textbook):  Strategy Implementation: Lecture #7 – Foundations of Strategic Competitiveness March 11, 2014 • The process of allocating resources and putting strategies into action. • All organizational and management systems must be mobilized to support and reinforce the accomplishment of strategies.  Essential Tasks for Strategy Implementation: • Identify organizational mission and objectives. • Assess current performance vis-a-vis mission and objectives. • Create strategic plans to accomplish purpose and objectives. • Implement the strategic plans. • Evaluate results; change strategic plans and/or implementation processes as necessary.  Analysis of Mission: • The reason for an organization’s existence. • Good mission statements identify: customers, products and/or services, location, underlying philosophy. • An important test of the mission is how well it serves the organization’s stakeholders.  Analysis of values.  Organizational culture.  Analysis of objectives.  Strengths, Weaknesses, Opportunities, Threats (SWOT Analysis).  Assessment of Macro Environment: • Technology. • Government. • Social structure and population demographics. • Global economy. • Natural environment.  Analysis of industry environment: • Resource suppliers. • Competitors. Lecture #7 – Foundations of Strategic Competitiveness March 11, 2014 • Customers. *****Porter’s model of five strategic forces affecting industry competition (refer to textbook) ***** Strategies Used by Organizations:  Strategic forces to be examined in conducting an industry analysis: • Industry competitors. • New entrants. • Suppliers. • Buyers. • Substitutes.  Growth and diversification strategies: • Growth strategies seek an increase in size and the expansion of current operations. • Concentration strategy is an example of a growth strategy. • Related diversification, unrelated diversification, and vertical integration are examples of diversification strategies.  Restructuring and Divestiture Strategies: • Re-adjusting operations when an organization is in trouble. • Retrenchment – correcting weaknesses by making changes to current operations (liquidation, restructuring, downsizing and rightsizing, restructuring through divestiture).  Global strategies:
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