Topic2.StrategyRevisited

Topic2.StrategyRevisited - STRATEGY REVISITED INTERNATIONAL...

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28/04/12’ 1’ STRATEGY REVISITED INTERNATIONAL STRATEGIC MANAGEMENT Thinking Strategically Three strategic questions Where are we now? Where do we want to be? How will we get there? 2 “If you don’t know where you are going, any road will take you there.” Lewis Carroll, Author of Alice in Wonderland UPF - International Strategic Management 2012
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28/04/12’ 2’ Crafting a Strategy Respond to changing external conditions Achieve desired objectives (strategic & financial, social, professional) Grow the business ü Create a competitive advantage against competitors & sustain the competitive edge ü Retain above average-returns 3 UPF - International Strategic Management 2012 Crafting a Strategy Competitive advantage? A firm has a competitive advantage if it is able to create more economic value than rival firms 4 The difference between the perceived benefits gained by a customer that purchases a firm’s products or services and the full economic cost of these products and services UPF - International Strategic Management 2012
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28/04/12’ 3’ Crafting a Strategy 5 If you have the same strategy as your competitors… If the strategy is different but is easily copied… If the strategy is different and is hard to copy Your strategy is useless It provides only a temporary advantage It is strong and sustainable UPF - International Strategic Management 2012 6 If you have the same strategy as your competitors… If the strategy is different but is easily copied… If the strategy is different and is hard to copy COMPETITIVE PARITY TEMPORARY COMPETITIVE ADVANTAGE SUSTAINABLE COMPETITIVE ADVANTAGE UPF - International Strategic Management 2012
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28/04/12’ 4’ Crafting a Strategy A firm possesses a sustainable competitive advantage when it has value creating processes and positions that cannot be duplicated or imitated by other firms and that lead to the consistent production of above average returns! 7 UPF - International Strategic Management 2012 Above-average return? Understanding how to exploit a competitive advantage is important for firms to earn above-average returns 8 ü Returns in excess of what an investor expects to earn from other investments with a similar amount of risks ü Often measured as ROA, ROE UPF - International Strategic Management 2012
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28/04/12’ 5’ Crafting a Strategy 9 UPF - International Strategic Management 2012 Competitive Disadvantage?? Q: How do you upgrade a Yugo car? A: Put in an engine. Q: What goes on pages 4-5 of the Yugo user's manual? A: The train & bus schedule. Q: How do you double the value of a Yugo? A: Half fill it with gasoline! Q: How do you make a Yugo look good? A: Park it between two Cadillacs! Q: What do you call a Yugo with brakes? A: Customized. Q: I can see you've got a new car - a Yugo!
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Topic2.StrategyRevisited - STRATEGY REVISITED INTERNATIONAL...

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