Ch01MBA - Chapter 1: Strategic Management and Strategic...

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1 Chapter 1: Strategic Management and Strategic Competitiveness Overview: Eight Topics Nature of Competition I/O Model of Above-Average Returns (AAR) Resource-Based Model of AAR Strategic Vision and Mission Stakeholders Strategic Leaders The Strategic Management Process What is Performance?
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2 Nature of Competition: Basic concepts Strategy Integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage Competitive Advantage (CA) When a firm implements a strategy that competitors are unable to duplicate or find too costly to imitate Strategic Competitiveness Achieved when a firm successfully formulates & implements a value-creating strategy
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3 Nature of Competition: Basic concepts Above Average Returns Returns in excess of what investor expects in comparison to other investments with similar risk 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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4 The Strategic Management Process
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5 Industrial Organizational (I/O) Model of Above-Average Returns (AAR) Explains the external environment’s dominant influence on a firm's strategic actions and performance Characteristics of and conditions present in the external environment determine the appropriateness of strategies that are formulated and implemented in order for a firm to earn above-average returns. The choice of industry in which to compete has more influence on firm performance than the decisions made by managers inside the firm.
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6 Industrial Organizational (I/O) Model of Above-Average Returns (AAR) 4 Underlying Assumptions External environment imposes pressures and constraints that determine the strategies resulting in AAR Most firms that compete within a particular industry: Control similar strategically relevant resources Pursue similar strategies in light of those resources Resources for implementing strategies are h ighly mobile across firms Therefore any resource differences between firms will be short-lived Organizational decision makers are rational and committed to acting in the firm's best interests, as shown by their profit-maximizing behaviors
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7 Industrial Organizational (I/O) Model of Above- Average Returns (AAR)
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8 Industrial Organizational (I/O) Model of
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This note was uploaded on 07/31/2011 for the course MAN 6782 taught by Professor Marlin during the Spring '11 term at University of South Florida.

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Ch01MBA - Chapter 1: Strategic Management and Strategic...

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