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Chapter 1: Strategic Leadership: Managing the Strategy Making Process for Competitive Advantage. Business Organizations. An organization is a collection of functions or departments working together to bring a product or service to market. Types of Organizations.

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Chapter 1: Strategic Leadership: Managing the Strategy Making Process for Competitive Advantage


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chapter 1 strategic leadership managing the strategy making process for competitive advantage

Chapter 1: Strategic Leadership: Managing the Strategy Making Process for Competitive Advantage

business organizations
Business Organizations
  • An organization is a collection of functions or departments working together to bring a product or service to market.
types of organizations
Types of Organizations
  • Sole Proprietorship – owner/operator.
  • Partnership – the business is owned by two or more people.
  • Corporation – a business entity that issues shares of ownership – can be public or private
strategy
Strategy
  • Defined as a set of actions that are related, used by managers to increase organizational performance
  • Strategic leadership – how to manage an organization’s strategy making process to improve organizational performance
    • Strategy making process – the selection and implementation of a choice of processes designed to advance organizational goals
    • Strategy formulation – the task and process of selecting organizational strategies
    • Strategy implementation – translating the selected strategy into action
      • Designing, delivering, and supporting products
      • Improving the efficiency and effectiveness of an organization
      • Designing an organization’s structure, control systems, and culture
maximizing organizational value
Maximizing Organizational Value
  • Profitability – the ability of an organization to generate financial returns for its investors
    • Return on invested capital – earnings generated from money used to start and operate a business – measured as net income after taxes/(capital and debt)
    • Measures the efficiency and effectiveness of the use of a firm’s capital
    • Profit growth – the increase in an organization’s net profit over time
  • Shareholder Value – the reason why investors purchase shares of a corporation
    • Includes anticipated share price appreciation – an increase in stock price
    • Includes anticipated dividends – funds generated by an organization that are paid to shareholders
competitive advantage
Competitive Advantage
  • A competitive advantage is where an organization obtains greater profitability than the average profitability of other organizations competing for the same set of customers
  • Sustained competitive advantage – when an organization’s strategies allow it to maintain above average profits for a number of years
business model
Business Model

A business model is management’s conception of how a set of strategies can be used in a coherent manner to enable an organization to obtain a competitive advantage, achieve superior profitability, and provide above average profit growth

business model continued
Business Model (Continued)

A business model specifies how a company will:

  • Select its customers
  • Define and differentiate its product offerings
  • Create value for its customers
  • Acquire and keep customers
  • Produce goods and services
  • Deliver goods and services to the market
  • Organize the firm’s activities
  • Configure the organization’s resources
  • Achieve and sustain profitability, and
  • Grow the business over time
types of managers
Types of Managers
  • General Managers – bear overall responsibility for the organization or one of its major self-contained units
  • Functional Managers – supervise a particular task, activity, or operation