Lecture 6 Strategic Management

Lecture 6 Strategic Management - Lecture6STRATEGICMANAGEMENT

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  1 Lecture 6 – STRATEGIC MANAGEMENT STRATEGIC MANAGEMENT Why are some organizations more successful  than others? How can businesses create and  sustain a competitive advantage?  Chapter 5: (K. p. 169 – 206) Case: Viacom
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  2 What is Strategic Management? The analyses, decisions and  implementations a firm undertakes to create  and sustain its  competitive advantage Why are some firms successful than others? Strategic management attempts to explain  differential performance External and internal models for explaining  competitive advantage
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  3 Analyzing the External Environment Industry structure analysis Group of firms with similar resource requirements  in raw materials, labour, technology, customers… The airline industry; the beer brewing industry… Are Amazon.com and Indigo bookstores in the  same industry?    The Five-Forces model attempts to evaluate  the attractiveness of an industry Based on distorting perfectly competitive  markets to generate monopolistic rents i.e. the less competition, the more profits for firms
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  The Five-Forces Model
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  5 1. Threat of New Entrants Can be new firms or diversifying entrants  Incumbents must create  barriers to entry : Economies of scale Capital requirements Switching costs for buyers Access to distribution channels Cost disadvantages unrelated to scale Intellectual property (patents, trademarks, trade  secrets)
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6 2. Bargaining Power of Suppliers How critical are the inputs provided by  suppliers? Are there many suppliers relative to 
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Lecture 6 Strategic Management - Lecture6STRATEGICMANAGEMENT

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