Chapter notes 1-5 (final)

Chapter notes 1-5 (final) - Chapter 1: Strategic Management...

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Chapter 1: Strategic Management and Strategic Competitiveness Firms use the strategic management process to achieve strategic competitiveness and earn-above average returns. Strategic competitiveness : is achieved when a firm successfully formulates and implements a value-creating strategy Strategy : is an integrated and coordinated set of commitments and actions design to exploit core competencies and gain a competitive advantage Competitive advantage : happens when the firm implements strategy competitors are unable to duplicate or find too costly to try to imitate Strategic management process : is the full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average return. The 21 st -Century Competitive Landscape The fundamental nature of competition is different in the 21 st -century competitive landscape. As a result, those making strategic decisions must adopt a different mind-set, one that allows them to learn how to compete in highly turbulent and chaotic environments that produce disorder and a great deal of uncertainty. The global economy: one in which goods and services, people, skills, and ideas move freely across geographic borders The globalization of industries and their markets and rapid and significant changes are two primary factors contributing to the turbulence of the 21st-century competitive landscape: The March of Globalization o Globalization : the increasing economic interdependence among countries and their organizations as reflected in the flow of goods and services, financial capital, and knowledge across country borders Technology and Technological Changes o Technology diffusion and disruptive technologies Perpetual innovation : how rapidly and consistently new, information- intensive technologies, replace older ones (shorter product cycle) Disruptive technologies : technologies that destroy the value of an existing technology and create new markets (i.e. IPod, Amazon.con) o The information age o Increasing knowledge (information, intelligence, expertise) intensity Strategic flexibility is a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment
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The I/O Model of Above-Average Returns The core assumption of this model is that the firm’s external environment has more of an influence on the choice of strategies than do the firm’s internal resources, capabilities, and core competencies. Thus, the I/O model is used to understand the effects an industry’s characteristics can have on a firm when deciding what strategy or strategies to use to compete against rivals. Resource-Based Model of Above-Average Returns The core assumption of this model is that the firm’s unique resources, capabilities, and core competencies have more of an influence on selecting and using strategies than does the firm’s external environment. Resources
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This note was uploaded on 04/17/2008 for the course MGCR 423 taught by Professor Okhmatovskiy during the Winter '08 term at McGill.

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Chapter notes 1-5 (final) - Chapter 1: Strategic Management...

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