ADMS 1000 Chapter Notes - Chapter 5: Market Power, Joint Venture, Vertical Integration

• School: York University
• Department: Administrative Studies
• Course: ADMS 1000
• Professor: Peter Modir

Document Summary

Strategic management consists of the analysis, decisions, implementations, and evaluations a firm undertakes to create and sustain its competitive advantages. This ongoing process is critical to firm performance and survival in that an effective process of strategic management can allow a firm to sustain its competitive advantage, which in turn enhances its performance and chances of survival. Strategy is defined as the plans made or the action taken in an effort to help an organization obtain its intended purposes. Michael porter drew upon research from industrial organization economics to propose a powerful, prescriptive model known as the five-forces model, which allows us to systematically assess the industry environment. The five forces include threat of new entrants, bargaining power of suppliers, bargaining power of customers, threats of substitute products or services, and rivalry among existing firms. New entrants take two basic forms: new startups and diversification of existing firms in other industries.