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Chapter 7

chapter 7 GMS.docx

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Department
Global Management Studies
Course
GMS 200
Professor
Shavin Malhotra
Semester
Summer

Description
Strategic management GMS chapter 7 Competitive advantageCompetitive advantages are when firms operate with a combination of attributes that allow it to perform better than their competitors It is also the ability to utilize resources well so that organizations perform better than the competition Sources of of competitive advantageCost and qualitystrategy places importance on operating efficiency and product or service qualityKnowledge and speedstrategy emphasizes the importance of innovation and speed of delivery to market for new ideasBarriers to entrystrategy that places importance on creating a market stronghold that is protected from entry by othersFinancial resourcesstrategies that place importance on investments or loss absorption that rivals in the industry are not able to compete against Back to competitive advantageAs competitors will eventually be able to copy a firms competitive advantage companies should focus on establishing sustainable competitive advantages which are those that are difficult or costly to copy or replicate Strategy and strategic intentStrategies are what help firms obtain competitive advantagesStrategies are a comprehensive action plan that identifies the long term direction for an organization and guides resource utilization to achieve sustainable competitive advantageStrategies are a best guess concerning what must be done in order to benefit from it in the future in the face of rivalry and changing conditionsA strategy that helps make sure that resources are used with consistent strategic intent which is where all energies are directed toward accomplishing a long term target or goal Levels of strategy Corporate level strategyThe level of corporate strategy directs the organization as a whole toward sustainable competitive advantage It descripes the scope of operations by answering the strategyic questionIn what industries and markets should we compete The purpose of corporate level strategy is to set direction and guide resource allocations for the whole entire enterpriseIn large complex organizations corporate strategy identifies how the company plans to compete across multiple industries and markets Business level strategyThis is the strategy for a single business unit or product lineThe selection of strategy at the business level involves asking the questionhow are we going to compete for customers in the industry and marketUsual business strategy decisions include choices about product and service mix facilities locations and new technologies Functional strategyDetermines how organizational resources will be used to put into effect the companys strategy this focuses on a specific functional areaThe strategic question that must be answered when deciding which functional strategy to use is How can we best utilize resources within a function to implement our business strategy Answers to this question involve the selection of management practices in each function that will improve operating efficiency product or service quality customer service or innovativeness The strategic management processStrategic management is the process of creating and putting into action strategies to accomplish long term goals and sustain competitive advantageThe strategic management process begins with strategic analysis where during this step we examine the organization its environment its competitive positioning and its current strategies and evaluate us based on what we discoveredStrategy formulation is the next step where we create a new or revised strategy with the goal of sustainable competitive advantageThe last step is strategy implementation where we use resources to put strategies into action and then evaluating results Analysis of mission values and objectivesThe strategic management process starts with the review and clarification of mission values and objectives This set the foundation for assessing the organizations resources and capabilities and the competitive opportunities and threats in its external environment Mission and stakeholdersThe mission of a company is the reason why it exists A clear idea of the mission from the perspective of managers help them keep organizations focused and use resources with strategic intent A clear idea in respects to the mission help managers gather support and respect from a companys stakeholders
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