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- You can generalize it: organizations of any type and any size need strategic thinkers
- It is where everything comes together
- It makes you a better leader: the ability to influence others is based on competence and confidence as well as character.
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| Why is strategy a dynamic process? |
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- The pace of technological change
- We live in a global environment (Globalization)
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| Two aspects of technological change |
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- Nature of change
- Speed of change
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| Contrasting perspectives on strategy |
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Definition
- Collection of market activities perspective (Michael Porter) - The industrial/organizational model
- Collection of resources perspective - the resource based view
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| Successful companies are six times more likely to have ________ leaders |
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| Base your decisions on analysis for an ______ decision |
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Definition
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| Develop resources within company to establish ________ _____________ |
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Term
| 3 categories of Stakeholders |
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Definition
- Those who own the firm (capital market stakeholders) - ex. Bill Ackman (J.C. Penny)
- Those who do business with the firm (product market stakeholders)
- Those who work for the organization (organizational stakeholders)
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Term
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Definition
- Economic
- Physical
- Sociocultural (societal attitudes and cultural values)
- Global
- Technological
- Political/Legal (legislative action, trade policies, and coporate governance)
- Demographic
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| The set of factors that directly influences a firm and its competitive actions and responses |
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| External Environment Analysis |
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Definition
- Scanning
- Monitoring
- Forecasting
- Assessing
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Definition
- Population size
- Age structure
- Geographic distribution
- Ethnic mix
- Income distribution
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| The nature and direction of the economy in which a firm competes or may compete. |
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Definition
- Economies of Scale
- Product differentiation
- Capital requirements
- Switching Costs
- Access to distribution channels
- Cost disadvantages independent of scale
- Government Policy
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Term
| Porter's Five Forces Model |
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Definition
- Threats of new entrants
- Bargaining power of suppliers
- Bargaining power of buyers
- Threat of substitute products
- Intensity of competition
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Term
| Two missing concepts to Porter's Five Forces Model: |
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Definition
- Compliments to a product
- Strategic groups or industry
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Term
| What barriers protect your business? |
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Definition
- Economies of scale
- Brand Loyalty
- Switching Costs
- Capital Requirements
- Proprietary Knowledge
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Term
| To be successful, firms need to base their strategy on a deep understanding of their ________ and ________ |
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Definition
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Term
| Firms need to know how to develop and maintain __________ __________ over their direct competition. |
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Definition
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Term
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Definition
- using or building resources and capabilities to develop a value-creating strategy that your competition cannot match.
- Should be measurable: increasing marketshare, above average profitability, etc.
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Term
| The value of a SWOT analysis |
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Definition
- What are your resources and capabilities?
- Are they getting better or worse over time? (Compare to yourself)
- Are they world class or not? (Compare to others)
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Term
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Definition
- workforce
- facilities
- technology
- organization structure
- financial resources
- doctrine/training
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Definition
- Cohesion and trust in workforce
- leadership
- corporate culture
- reputation (Brand identity)
- innovation/knowledge
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Definition
- resources/capabilities that enable a firm to establish and sustain a competitive advantage
- If a competitor has a core competency, you can either build it or buy it.
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Term
| Four signals of Core Competencies |
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Definition
- Valuable (resources that exploit)
- Rare
- Hard to imitate (historically unique, socially complex, causally ambiguous)
- Hard to substitute
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Term
| Types of Business level strategies |
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Definition
- Cost leadership
- Differentiation
- Focused cost leadership
- Focused differentiation
- Integrated cost leadership/differentiation
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Term
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Definition
| A managerial process that emphasizes an organization's commitment to the custome and to continuous improvement of all processes through problem-solving approaches based on empowerment of employees. |
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Term
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Definition
- Every firm has a business-level strategy (whether they know it or not)
- Rule #1: Never lose money
- Rule #2: Never forget Rule #1
- Developing a business-level startegy depends on knowing your customer
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Term
| Three Questions to ask when developing a Business-level strategy |
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Definition
- Who are they?
- What do they want?
- How to provide it?
- Based on these questions....How am I providing value? (Low cost v. differentiation) and Who am I providing value to? (Mass v. Focus)
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Term
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Definition
- a strategy that produces goods or services with features that are acceptable to customers at the lowest cost relative to that of competitors.
- Cost means the total cost to the customers of doing business with you.
- Cost= price +reliability + probability of damages + ease of doing business
- Use value chain analysis (compare cost by activity, identify cost of drivers, identify linkages, and identify opportunities for reducing costs)
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| Structure for cost leadership strategy |
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Definition
- The ability to maintain the strategy depends on effectiveness and efficiency.
- Operations is main functions
- Large centralized staff
- Job roles are highly structured
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- A strategy where a firm attempts to increase the perceived value of a good or service related to the perceived value of the goods and services of other items.
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| Stock price X Market Share |
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