Lecture #7 – Foundations of Strategic Competitiveness March 11, 2014
Basic Concepts of Strategy:
Sustainable competitive advantage.
Environments and Competitive Advantage:
• Only one player and no competition.
• Creates absolute competitive advantage.
• Few players not directly competing against each other.
• Long-term competitive advantage in defined market segment.
• Several players directly competing against each other.
• Any competitive advantage is only temporary.
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
Analysis of Mission:
• The reason for an organization’s existence.
• Good mission statements identify: customers, products and/or services, location,
• An important test of the mission is how well it serves the organization’s
Analysis of values.
Analysis of objectives.
Strengths, Weaknesses, Opportunities, Threats (SWOT Analysis).
Assessment of Macro Environment:
• 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
*****Porter’s model of five strategic forces affecting industry competition (refer to
Strategies Used by Organizations:
Strategic forces to be examined in conducting an industry analysis:
• Industry competitors.
• New entrants.
Growth and diversification strategies:
• Growth strategies seek an increase in size and the expansion of current
• 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