Lecture 1 .pptx - Globalization The global economy Rapid...

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Unformatted text preview: Globalization The global economy Rapid technological change Today’s competitive markets Increasing importance of knowledge and people Formulation and implementation of a superior valuecreating strategy Commitments and actions to achieve above-average performance and returns What the firm will do Competitive advantage What the firm will not do Increasing Increasing The Global Competitive Landscape • Market volatility and instability due to the rapid pace of change in markets • Blurring of market boundaries • Globalized flow of financial capital • Need for flexibility, speed, innovation, and integration in the use of technology • Strategic and operational complexity of global-scale competition • Rising product quality standards Decreasing Decreasing • Traditional time for adapting to change • Traditional sources of competitive advantage • Traditional managerial mindset Hypercompetition Global economy Use of price-quality positioning to build market presence Strategic options in hypercompetitive environments Creation of new know-how and use of first-mover advantage Technology Protection or invasion of established geographic or product markets Competitive Success Factors Technology and Technological Changes Increasing rate of technology diffusion and the emergence of disruptive technologies Technology trends impacting the global competitive environment The information age: Internet and the global proliferation of low-cost computing power Increasing knowledge intensity as an intangible source of competitive advantage Diversification Product differentiation Barriers to market entry Economies of scale Industry concentration The firm’s strategic choices Market frictions The Industry Organization (I/O) Model of Above-Average Returns Five Forces Model of Competition Substitutes Substitutes Suppliers Suppliers Industry Industry rivalry rivalry Potential Potential entrants entrants Buyers Buyers The Resource-Based Model of Above-Average Returns e g a t n a v d a e v i t i t e p m o Core c g n i competence d l Capability i A source of Bu Resources An integrated set of resources Physical, human, and organizational capital (tangible and intangible) competitive advantage Resources As Core Competencies Costly to imitate Rare How resources become core competencies Nonsubstitutable Valuable The Resource-Based Model of Above-Average Returns Strategic Decision Making Industry organization (I/O) model Competitive strategy decision Resource-based model Stakeholders Can affect development of the firm’s vision and mission Primary stakeholders (individuals, groups and organizations) Are affected by the strategic outcomes achieved by the firm Can have enforceable claims on the firm’s performance Are influential when in control of critical or valued resources Classification of Stakeholders Categories of stakeholders Capital market stakeholders Product market stakeholders Organizational stakeholders Capital Market Stakeholders Preservation of investment Influence Conflicting expectations of shareholders and lenders Enhanced wealth Risk/return Product Market Stakeholders Types of product market stakeholders Suppliers Customers Host communities Unions Organizational Stakeholders Responsibilities of strategic leaders for development and effective use of the firm’s human capital Education and skills of employees Organizational culture and ethical work environment Strategic goals and global standards International assignments ...
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  • Spring '08
  • brown

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