Inputs Strategic Strategic Outcomes Chapter 2 The Strategic Management Process External Environment Strategic Intent Strategic Mission Chapter 3 Internal Environment Strategy Formulation Strategy Implementation Chapter 4 Chapter 5 Chapter 6 Chapter 10 Chapter 11 Business-Level Competitive Corporate-Level Corporate Structure Strategy Dynamics Strategy Governance & Control Actions Strategic Chapter 8 Chapter 7 Chapter 9 Chapter 12 Chapter 13 Entrepreneurship & Innovation International Acquisitions & Cooperative Strategic Strategy Restructuring Strategies Leadership Strategic Competitiveness Above Average Feedback Returns
Chapter One: Key Themes Challenge of Strategic Management Changing Competitive Landscape Two Models of Superior Profitability Industrial Organization Model Resource-Based Model Key Stakeholder Groups
Challenge of Strategic Management Only 2 of the top 25 U.S. corporations in 1900 are still competitive today! In a recent year, almost 150,000 U.S. businesses failed or filed for bankruptcy Competitive success is transient...unless care is taken to preserve competitive position
New Competitive Landscape Fundamental nature of competition is changing The pace of change is relentless.... and increasing Rapid technological changes Rapid technology diffusions Traditional industry boundaries are blurring...such as Dramatic changes in information and communication technologies Computers Increasing importance of knowledge Telecommunications
New Competitive Landscape The global economy is changing Traditional sources of competitive advantage no longer guarantee success People, goods, services and ideas move freely across geographic boundaries New keys to success include: New opportunities emerge in multiple global markets Flexibility Innovation Markets and industries become more internationalized Speed Integration
Alternative Model of Superior Returns Industrial Organization Model 1 Resource-Based Model 2
I/O Model of Superior Returns The Industrial Organization Model suggests that above-average returns for any firm are largely determined by characteristics outside the firm. The I/O model largely focuses on industry structure or attractiveness of the external environment rather than internal characteristics of the firm.
Resource-Based Model of Superior Returns The Resource-Based Model suggests that above-average returns for any firm are largely determined by characteristics inside the firm. The Resource-Based view focuses on developing or obtaining valuable resources and capabilities which are difficult or impossible for rivals to imitate.
Strategic Intent Winning competitive battles through deciding how to leverage internal resources, capabilities, and core competencies. Strategic Mission An application of strategic intent in terms of products to be offered and markets to be served.
Stock market/Investors Debt suppliers/Banks Primary Customers Suppliers Groups who are affected by a firm’s performance and who have claims on its performance Stakeholders The firm must maintain performance at an adequate level in order to maintain the participation of key stakeholders Capital Market Firm Product Market Organizational Employees Managers Non-Managers