Professional Documents
Culture Documents
Chapter 1: Strategic
management & strategic
competitiveness
Dr.Satirenjit Kaur Johl
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Knowledge Objectives
Studying this chapter should provide you with the
strategic management knowledge needed to:
Define strategic competitiveness
competitive advantage, and above-average
returns.
Describe the 21st-century competitive
landscape and explain how globalization
and technological changes shape it.
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Definitions
Strategic Competitiveness
When a firm successfully formulates and implements a
value-creating strategy
Definitions (contd)
Risk
An investors uncertainty about the economic gains
or losses that will result from a particular investment
Average Returns
Returns equal to those an investor expects to earn
from other investments with a similar amount of risk
Above-average Returns
Returns in excess of what an investor expects to earn
from other investments with a similar amount of risk
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The Strategic Management
Process
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Figure 1.1
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Landscape: Hypercompetition
Hypercompetition
A condition of rapidly escalating
competition based on:
Price-quality positioning
Competition to create new know-
how and establish first-mover
advantage
Competition to protect or invade
Hypercompetition established product or
geographic markets
Several factors create
hypercompetitive env & 21st
century competitive landscape:
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global economy & rapid
technological change
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Global Economy
Global Economy
Goods, people, skills, and ideas move
freely across geographic borders
Movement is relatively unfettered by
artificial constraints
Expansion into global arena complicates
a firms competitive environment
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Increased economic
interdependence among countries
as reflected in the flow of goods
and services, financial capital, and
knowledge across country borders
Increased range of opportunities for
companies competing in the 21st-
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century competitive landscape
Technology and Technological
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Changes
Rate of change of technology and speed
at which new technologies become
available
Perpetual innovationhow rapidly and
consistently new, information-intensive
technologies replace older ones
The development of disruptive
technologies that destroy the value of
existing technology and create new
markets
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Technological Change
The Information Age
The ability to effectively and efficiently
access and use information has become
an important source of competitive
advantage
Technology includes personal computers,
cellular phones, artificial intelligence,
virtual reality, massive databases,
electronic networks, internet trade
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Technological change
Telephone 35 years 25% of
all homes in U.S
TV 26 years
Radio 22 years
PC 16 years
Internet 7 years
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Technological Changes
Increasing Knowledge Intensity
Strategic flexibility: set of
capabilities used to respond
to various demands and
opportunities in dynamic and
uncertain competitive
environments
Organizational slack: slack resources
that allow the firm flexibility to
respond to environmental changes
Capacity to learn
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Strategic Intent
Internally focused
The
leveraging of a firms resources,
capabilities and core competencies to
accomplish the firms goals
Existswhen all employees and levels of
a firm are committed to the pursuit of
a specific, significant performance
criterion
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Strategic Mission
Externally focused
A statement of a firms unique purpose and the
scope of its operations in product and market terms
Establishes a firms individuality and is inspiring and
relevant to all stakeholders
Provides general descriptions of the firms intended
products and its markets
Exp: Johnson & Johnson focuses on customers,
stating the organisations primary responsibility is to
the doctors, nurses & patients, mothers & fathers &
all others who use our products & services.
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Strategic Mission
Exp vision: Mc Donalds - To be the world best quick
service restaurant
Mission Mc. Donalds- be the best employer for our
people in each community around the world and
deliver operational excellence to our customers in
each of our restaurant.
Mission: LNP a GE Plastic Company
Is to be recognized by our customers as the leader
in application engineering. We always focus on the
activities customers desire: we are highly motivated
and strive to advance our technical knowledge in the
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technology
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Stakeholders
Individualsand groups who can affect, and
are affected by, the strategic outcomes
achieved and who have enforceable claims
on a firms performance
Claims are enforced by the stakeholders
ability to withhold essential participation
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The Three
Stakeholder
Groups
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Figure 1.4
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Organizational Stakeholders
Employees
Expect a dynamic, stimulating
and rewarding work
environment
Are satisfied by a company that
is growing and actively
developing their skills
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Stakeholder Involvement
Two issues affect the extent of stakeholder
involvement in the firm
How to divide returns
to keep stakeholders
involved?
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Strategic Leaders
People responsible for the design and
execution of strategic management
processes
Decisions they make include
How resources will be developed or
acquired
At what price resources will be obtained
How resources will be used
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Organizational Culture
The complex set of
Ideologies
Symbols
Core values
that are shared throughout the firm,
that influence how the firm conducts
business
Exp PETRONAS share values: loyalty,
professionalism, integrity & cohesiveness
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