Chapter 1: Strategic Management and Competitiveness Essay

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The Management of Strategy (Concepts and Cases) Part I: Strategic Management Inputs Chapter 1: Strategic Management and Competitiveness 1 Chapter 1: Strategic Management and Competitiveness Overview: Eight content areas 1. 2. 3. 4. 5. 6. 7. 8. Strategy and Competition The 21st Century Competitive Landscape I/O (Industrial Organization) Model of Above-Average Returns (AAR) Resource-Based Model of AAR Strategic Vision and Mission Stakeholders Strategic Leaders The Strategic Management Process 2 Nature of Competition: Basic concepts  Strategic Competitiveness  Achieved when a firm formulate & implements a value-creating strategy  Strategy  Integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage and achieved above average return Implemented strategy that competitors are unable to duplicate or find too costly to imitate  Competitive Advantage (CA)   Above Average Returns  Returns in excess of what investor expects in comparison to other investments with similar risk 3 Nature of Competition: Basic concepts (Cont’d)  Risk  Investor’s uncertainty about economic gains/losses resulting from a particular investment Returns equal to what investor expects in comparison to other investments with similar risk Full set of commitments, decisions and actions required for a firm to achieve strategic competitiveness and earn above average returns 4  Average Returns   Strategic Management Process (SMP)  21st Century Competitive Landscape      Pace of change is continuous and more rapid Partnerships created by mergers & acquisitions (M&As) Economies of scale Managerial mind-set of flexibility, speed, innovation and integration Hyper-competition –extremely intense rivalry among competing firms,

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