Chapter 6

Chapter 6 - Keeping Firm Competitive How Strategic...

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Unformatted text preview: Keeping Firm Competitive How Strategic Management Fits In “It “It is not the strongest firms that survive, but the most adaptive” -- Samsun Corp FORTUNE FORTUNE 500 --50 --50 years old --1877 --1877 firms have appeared --Only --Only 71 have appeared each year The The World is Flat by Thomas Friedman Speed of Change Competitors Competitors are not Just Just around corner But But anyone around world Bought Bought books off Internet? And And we are just warming up!!!!!! Every Every agribusiness manager goal that wants to stay in business must be: “How do I enhance by firm’s competitive edge today in this today larger, faster moving more competitive market environment?” 1 Strategic Management What What businesses must do to stay in business Strategic Management Flow Chart Maximize Long Run Stock Price Profits by Profitably Satisfying Customer Needs Strategic Management Flow Chart Company’s Financial Performance Financial Performance High profit Product value Customer service 2 Strategic Management Flow Chart Developing a Sustainable Competitive Advantage From Higher Prices or Lower Costs Both Necessary but Not Sufficient Operational Efficiencies Efficiencies (Lowest Cost) Strategic Positioning Positioning (Differentiated Products) Generic Building Blocks of Competitive Advantage Superior Quality Superior Efficiency Competitive Advantage • Low Cost • Differentiation Superior Customer Responsiveness Superior Innovation Source: Hill & Jones, Strategic Management Three Parts of Strategic Plan Mission/Vision Mission/Vision Statement --Values --Values --Purpose --Purpose ---Objectives Strategic Strategic Plan --Threats --Threats and Opportunities (External) --Strengths --Strengths and Weaknesses (Internal) Implementation Implementation Plan 3 Universal Mission Statement “To improve the economic well-being and wellquality of life of all stake-holders” stakeStephen Covey, Principle-Centered Leadership, pg 295-301 Are You First Choice? Investors Investors Do you provide highest return on invested capital? Are You First Choice Customers? Customers? Does Does products offer best value • Totally & completely fill needs 4 Are You First Choice? Employees Employees Obtain Obtain greatest job satisfaction Place Place where values match own values Opportunity Opportunity to realize full potential Make Make customers’ lives better Implementation Value A great strategic plan without flawless execution great Like Like no plan Three Three ways to measure strategic plan’s success if your first choice of : --Employees --Employees --Customers --Customers --Investors --Investors Highest ROIC in Industry Strategic Planning Process Develop Marketing Plan Develop Strategic Assess Internal Environment Assess External Environment Set Purpose & Objectives Define Values 5 Context in Which Competitive Strategy is Formulated Personal Values Of Key Implementers External Company Factors Company Strengths & Weaknesses Competitive Strategy Broader Societal Expectations Internal Company Factors Industry Opportunities & Threats (Economic & Technical) Source: Porter, Competitive Strategy Porter’s Five Forces Model Potential Entrants Threat of New Entrants Bargaining Power Of Buyers Industrial Competitors Suppliers Rivalry among Existing Firms Buyers Bargaining Power of Suppliers Substitutes Threat of Substitute Products or Services Source: Porter, Competitive Strategy 6 ...
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