Textbook Notes (363,212)
Canada (158,271)
GMS 200 (566)

GMS200 CH 7.docx

3 Pages
Unlock Document

Ryerson University
Global Management Studies
GMS 200
Bamidele Adekunle

CH. 7 – Strategy and Strategic Management Strategic Management Competitive Advantage: is the ability to do something so well that one outperforms competitors. Typical sources of competitive advantage include: cost and quality, knowledge and speed, barriers to entry, and financial resources. However the ultimate goal is creating sustainable competitive advantage: the ability to outperform rivals in ways that are difficult or costly to imitate. Strategy and Strategic Intent: A strategy is a comprehensive action plan that identifies the long-term direction for an organization and guides resource utilization to achieve sustainable competitive advantage. A strategy helps ensure that resources are used with consistent strategic intent, which focuses and applies organizational energies on a unifying and compelling goal. Levels of Strategy Corporate-Level Strategy: A corporate strategy sets long-term direction for the total enterprise. Business-Level Strategy: a business strategy identifies how a division or strategic business unit will compete in its product or service domain. Functional Strategy: A functional strategy guides activities within one specific area of operations. The Strategic Management Process: Strategic management is the process of formulating and implementing strategies to accomplish long-term goals and sustain competitive advantage. It begins with strategic analysis: the process of analyzing the organization, the environment, and the organization’s competitive position and current strategies. Next is strategy formulation: the process of crafting strategies to guide the allocation of resources. And finally, strategy implementation: the process of putting strategies into action. Essentials of Strategic Analysis Analysis of Mission, Values, and Objectives A mission statement expresses the organization’s reason for existence in society. Mission and Stakeholders: Stakeholders are individuals and groups directly affected by the organization and its strategic accomplishments. Strategic constituencies’ analysis assesses interest of stakeholders and how well the organization is responding to them. Core Values: Are broad beliefs about what is or is not appropriate behaviour. Personal values of a founder/leader can become part of the organizational culture, which is the predominant value system for the organization as a whole. Objectives: operating objectives are specific results that organizations try to accomplish; some typical ones include: profitability, financial health, cost efficiency, customer service, product quality, market share, human talent, innovation and social responsibility. SWOT Analysis of Organization and Environment SWOT analysis examines organizational strengths and weaknesses and environmental opportunities and threats (Strengths, Weaknesses, Opportunities, and Threats). Organizational Strengths and Weaknesses: assessing strengths helps identify core competencies—a special strength that gives an organization a competitive advantage. In assessing weaknesses, it helps to identify things that inhibit performance and hold the organization back from fully accomplishing its objectives. Environmental Opportunities and Threats: some external opportunities can be new markets, strong economy, weaknesses in competitors and emerging technology and threats can be new competitors, resource scarcities, changing customer tastes, new gov’t regulations and a weak economy. Analysis of Rivalry and Industry Attractiveness Porter’s Five Forces Model: 1) Industry competition: the intensity of rivalry among firm in the industry and the ways they behave competitively toward one another 2) New entrants: the threat of new competitors entering the market, based on the presence or absence of barriers to entry 3) Substitute products or services: the threat of substitute products or services, based on the ability of consumers to find what they want from other sellers 4) Bargaining power of suppliers: the ability of resource suppliers to influence the price that one has to pay for their products or services 5) Bargaining power of customers: the ability of customers to influence the price they will pay for the firm’s products/services. Industry Attractiveness: The five competitive forces establish the industry’s attractiveness or potential tp generate long-term returns. The less attractive the structure, the harder it is to make good strategic choices and realize a sustained competitive advantage relative to rivals. An unattractive industry is one in which rivalry among competitors is intense, substantial threats exist in the form of possible new entrants and substitute products, and suppliers and buyer are very powerful in bargaining over such things as prices and quality. An attractive industry has less existing competition, few threats from new entrants or substitutes, and low bargaining power among suppliers and buyers. Corporate-Level Strategy Formulation CEO + Senior management team focus on this and its goal is to plot the overall direction of the organization in the competitive setting of its industry. Grand or Master Strategies Growth Strategy: involves expansion of the organization’s current operations in such things like total sales, market shares, and operating locations. Stability Strategy maintains current operations without substantial changes. Renewal Strategy (also called retrenchment or defensive strategy): tries to solve problems and overcome weaknesses that are hurting performance. The most extreme form of retrenchment is liquidation, where business operations cease and assets are sold to pay creditors. Combination Strategy: pursu
More Less

Related notes for GMS 200

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.