Ch1 - The Management of Strategy (Concepts and Cases) Part...

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1 The Management of Strategy (Concepts and Cases) Part I: Strategic Management Inputs Chapter 1: What is Strategic Management
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2 Chapter 1: What is Strategic Management Overview: Eight content areas Nature of Competition The 21 st Century Competitive Landscape I/O Model of Above-Average Returns (AAR) Resource-Based Model of AAR Strategic Vision and Mission Stakeholders Strategic Leaders The Strategic Management Process
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3 Nature of Competition: Boeing vs. Airbus Boeing Historically a global leader in airplane manufacturing Regained supremacy in 2006: more 787 super jumbo orders vs. Airbus’s more efficient A-380 Changed strategy and design Different production process Smaller plane (787 Dreamliner) Airbus EU Government owned and subsidized Responded to customer demands with more efficient A-380 aircraft
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4 Nature of Competition: Basic concepts Strategic Competitiveness Achieved when a firm formulate & implements a value-creating strategy Strategy Integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage Competitive Advantage (CA) Implemented strategy that competitors are unable to duplicate or find too costly to imitate Above Average Returns Returns in excess of what investor expects in comparison to other investments with similar risk
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5 Nature of Competition: Basic concepts (Cont’d) Risk Investor’s uncertainty about economic gains/losses resulting from a particular investment Average Returns Returns equal to what investor expects in comparison to other investments with similar risk Strategic Management Process (SMP) Full set of commitments, decisions and actions required for a firm to achieve strategic competitiveness and earn above average returns
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6 The Strategic Management Process
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7 Chapter 1: What is Strategic Management Overview: Eight content areas Nature of Competition The 21 st Century Competitive Landscape I/O Model of Above-Average Returns (AAR) Resource-Based Model of AAR Strategic Vision and Mission Stakeholders Strategic Leaders The Strategic Management Process
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8 21 st Century Competitive Landscape Introduction: The Competitive Landscape (CL) Pace of change is rapid Other CL characteristics: Economies of scale, advertising budgets not as effective as before, change in managerial mind-set from “traditional” to more flexible and innovative
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9 21 st Century Competitive Landscape (Cont’d) Introduction: The Competitive Landscape (CL) Hypercompetition – extremely intense rivalry among competing firms, characterized by
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Ch1 - The Management of Strategy (Concepts and Cases) Part...

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