lecture note - RSM100 An Introduction to Business and...

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RSM100 An Introduction to Business and Management John M. Oesch Rotman School, University of Toronto
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RSM 100 Strategy Jan 6, 2010 What is Strategy? Congruence
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Competitive Advantage differentiating characteristic provides economic benefit not easily duplicated
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Traditional Sources of Competitive Advantage 1. product or process technology 2. protected markets (regulation) 3. financial resources 4. economies of scale 5. management of work force
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A CONGRUENCE MODEL A general model of a business; a framework for thinking about the business as a total system. The business is a dynamic and open social system. For any business to be effective, its subparts must be consistently structured and managed. FIT -- CONGRUENCE
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A CONGRUENCE MODEL Inputs ENVIRONMENT : RESOURCES : HISTORY:
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A CONGRUENCE MODEL Strategy How the organization will configure its resources against demands, constraints, and opportunities presented by the environment within the context of history.
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A CONGRUENCE MODEL Transformation Process FORMAL ORGANIZATION: INFORMAL ORGANIZATION:
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A CONGRUENCE MODEL Transformation Process TASK: INDIVIDUAL:
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A CONGRUENCE MODEL Outputs ORGANIZATION: GROUP: INDIVIDUAL:
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Congruence take-aways 1. Org as system; elements of the system must fit together. Fit refers to strength of 2. Strategy, structure, and people must be closely linked. 3. System must maintain a favourable balance of input and output transactions with the environment. 4. Org’s must change with environment. 5. People will perceive both constraints and opportunities created by organizations; must manage these!
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Business Strategy is… A set of choices A set of plans A set of actions All of the above
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Strategy is A set of choices What is the purpose, mission of our company How can we derive competitive advantage?
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Purpose/mission What do we want to accomplish? LT, Intermediate, ST goals What business are we in? selling watches Who are our customers? Timex vs. Rolex
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Competitive Advantage Porter’s five competitive forces model: Rivalry among competitors Substitute products Potential new entrants Bargaining power of suppliers Bargaining power of buyers
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Porter’s Five Forces Model NEW ENTRANTS BUYERS SUBSTITUTES INDUSTRY COMPETITORS SUPPLIERS
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Rivalry Competitors trying to win (cutthroat, intense, moderate, weak) Intense when: Lots of firms Demand has steadied (mature market) High storage costs High fixed costs Customers can switch easily
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New Entrants Could affect supply Threat depends on barriers to entry High set-up costs Economies of scale Regulatory advantage Installed customer or technology base
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Affects demand, hurts prices (eg. digital cameras)
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This note was uploaded on 03/03/2011 for the course COMMERCE 100 taught by Professor Josh during the Spring '10 term at University of Toronto.

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lecture note - RSM100 An Introduction to Business and...

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