Exam2 - Book Notes2 - 1. 2. 3. 4. 5. 6. 7. How does a firm...

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How does a firm choose a competitive strategy why it faces uncertainties about the future? Industry structure – Not static, and firms in many industries face considerable uncertainty about how it will change in the future Sources of uncertainty are numerous and originate both: o Within the industry o In the industry’s broader environment Uncertainty is not often addressed well in competitive strategy formulation Scenario – An internally consistent view of what the future might turn out to be o By constructing multiple ones, a firm can systematically explore the possible consequences of uncertainty for its choice of strategies Macroscenarios – Macroeconomic and macropolitical factors; too general to be sufficient for developing strategy in a particular industry Scenario – Powerful device for taking account of uncertainty in making strategic choices; allow a firm to move away from dangerous, single-point forecasts of the future in instances when the future cannot be predicted Scenario – Helps encourage managers to make their implicit assumptions about the future explicit, and to think beyond the confines of existing conventional wisdom Industry scenarios – The appropriate unit for analysis of scenarios in competitive strategy o Allows a firm to translate uncertainty into its strategic implications for a particular industry; explicitly include competitor behavior, a key
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This note was uploaded on 09/08/2011 for the course MAN 4720 taught by Professor Staff during the Spring '08 term at University of Central Florida.

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Exam2 - Book Notes2 - 1. 2. 3. 4. 5. 6. 7. How does a firm...

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