Chapter 9 – Strategic Management
Key Study Questions for Chapter 9
1.What are the foundations of strategic competitiveness?
2.What is the strategic management process?
3.What types of strategies are used by organizations?
4.How are strategies formulated?
5.What are current issues in strategy implementation?
Study Question 1: What are the foundations of strategic competitiveness?
•Basic concepts of strategy:
oCompetitive advantage — operating with an attribute or set of attributes that
allows an organization to outperform its rivals.
oSustainable competitive advantage — one that is difficult for competitors to
oStrategy — a comprehensive action plan that identifies long-term direction
for an organization and guides resource utilization to accomplish
organizational goals with sustainable competitive advantage.
oStrategic intent — focusing all organizational energies on a unifying and
oStrategic management — the process of formulating and implementing
strategies to accomplish long-term goals and sustain competitive advantage.
•Goal of strategic management is to create above-average returns for investors.
oReturns exceeding those for alternative opportunities at equivalent risk.
oEarning above-average returns depends in part on the organization’s
•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.
Study Question 2: What is the strategic management process?
oThe process of creating strategy.
oInvolves assessing existing strategies, organization, and environment to
develop new strategies and strategic plans capable of delivering future