MGTA05H3 Chapter Notes - Chapter I: Switching Barriers, Strategic Management, Cost Leadership
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MGTA05H3 Full Course Notes
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Document Summary
Strategic management consists of the analysis, decisions, implementations and evaluations a firm undertakes in order to create and sustain its competitive advantages. Strategy is defined as the plans made or the actions taken, in an effort to help an organization/firm obtain its intended purposes. Industry is defined as a group of organizations/firms that share similar resource requirements. Allows us to systematically assess the industry environment. Thrust of the model is that relationships between these five forces and the firms determine attractiveness of industry environment, which help up to make strategic decisions. Five forces include: threats of new entrants, bargaining power of suppliers, bargaining power of customers, threats of substitute products or services, rivalry among existing firms. New entrants can take two basic forms: new start-ups, diversification of existing firms in other industries. New entrants will pose threats to incumbents by bringing new capacity and desire to gain market share.
