Strategic Management In Action. Fifth Edition Mary Coulter. Chapter 2 The Context of Managing Strategically. Group 4 Rachel Rose Yao Hai Ryan Martin Matt Porter. Section 2.1. Learning Outcomes Understanding Competitive Advantage Understanding the Three Perspectives The I/O View
Does it add value?
Is it hard to duplicate and substitute?
ORGANIZATIONAL RESOURCES AS COMPETITIVE ADVANTAGE
Can the firm exploit it?
Is it rare?
-Drivers of the New Business Environment -Information Revolution -Technology -Globalization
-The New Business Environment
-Implications -Continual Change -Reduced need for physical assets -Vanishing distance and compressed time -Vulnerability
-Critical Success Factors -Ability to embrace change -Creativity and innovation capabilities -Being a world-class organization
The amount of information being created, captured, and replicated in a digital format is growing at a rate of 57% a year.
This Information is Available to- Anyone- Anywhere- Anytime
This Instant availability of information has radically changed the nature of the business environment.
-Information (Knowledge) has always been used to produce goods and services. It has helped organizations to be more efficient and effective.
-However, there has been a shift in the way we look at information now. -It is the essential resource of production, not simply as a means to an end.
-To have a competitive advantage, organizations must not reply on traditional factors of production.-It must now look at how information and knowledge can be exploited.
-What is technology?
-It is using equipment, materials, knowledge, and experience to perform tasks.
-Technology significantly changes the nature of competition and affects how organizations do their work in three areas.-Innovation-Bottom-Up Capability-Organizational Performance
-Innovation -Turning a creative product or process that can be used or sold. -More than just creativity alone: -Developing -Making -Marketing something that can generate a revenue.
-Bottom-Up or “Mass Collaboration Capability” -Shifting power from institutions to individuals.Ex. -American Idol -eBay
-Organizational Performance -Understanding that technology is only a tool, not a replacement for understanding the economics of business. -This allows organizations to be the best at what they do.Ex. -Wal-Mart, McDonald’s, Starbucks.
-The days of consuming only domestic products are gone.-More than ever, organizations must strategically manage global issues.-The products we consume now are provided by a foreign company or by a domestic company that does business globally.-Globalization influences strategic management in two ways: -Global Marketplace -Global competitors
-Global Marketplace -The whole world is a potential marketplace. -Potential marketplace range from small villages in China and India to urban areas like Moscow or Mexico City -This global marketplace provides significant opportunities for organizations to market their goods and services. -As global markets open up:
-Global competitors-Looking for a sustainable advantage. -Have their own unique set of experiences and resources. -Making it much more difficult to understand their strategic approach. -However, by partnering together with competitors, you can avoid the treat, and still be able to achieve the intended competitive advantage in the global market.
Change Agents – oversee and initiate change efforts
Ex. Big change in information transfer with Twitter
Creativity – ability to combine ideas in a unique way or to make unusual associations between ideas
2. Elaborate on the purpose of the company
3.Includes a brief summary of what the company does
4. Specify Broad goals
To refresh the world...
To inspire moments of optimism and happiness…
To create value and make a difference.