Introduction to Strategic Management

Introduction to Strategic Management - Introduction to...

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Introduction to Strategic Management MANA 5336
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What is Strategy? Strategy is the overall plan for deploying resources to establish a favorable position. Tactic is a scheme for a specific maneuver.
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Characteristics of strategic decisions… Important Involve a significant commitment of resources Not easily reversible
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Basic Framework The firm Resources & Capabilities Structures & Systems External Environment Competitors Customers Suppliers etc Strategy
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Definitions Strategic Management Process The full set of commitments, decisions, and actions required for a firm to create value and earn above-average returns Value Creation What is achieved when a firm successfully formulates and implements a strategy that other companies are unable to duplicate or find too costly to imitate.
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Definitions Returns that are in excess of what an investor expects to earn from other investments with a similar amount of risk Above-Average Returns Returns that are equal to those an investor expects to earn from other investments with a similar amount of risk Average Returns
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Definitions Risk An investor’s uncertainty about the economic gains or losses that will result from a particular investment
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Fundamental nature of competition is changing Competitive Landscape Hypercompetitive environments Dynamics of strategic maneuvering among global and innovative combatants Price-quality positioning, new know-how, first mover Protect or invade established product or geographic markets
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Fundamental nature of competition is changing Hypercompetitive environments Competitive Landscape Emergence of global economy Goods, services, people, skills, and ideas move freely across geographic borders Spread of economic innovations around the world Political and cultural adjustments are required
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Hypercompetitive environments Competitive Landscape Emergence of global economy Rapid technological change Increasing rate of technological change and diffusion The information age Increasing knowledge intensity Fundamental nature of competition is changing
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Strategic Flexibility A set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment It involves coping with uncertainty and the accompanying risks
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Strategic Flexibility Strategic Flexibility Strategic flexibility flexibility Strategic Strategic reorientation reorientation Capacity to Capacity to learn learn Organizational Organizational slack slack
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Strategy dictated by the Strategy dictated by the external environment of external environment of the firm (what the firm (what opportunities exist in opportunities exist in these environments?) these environments?) t Firm develops internal Firm develops internal skills required by external skills required by external
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Introduction to Strategic Management - Introduction to...

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