PART 1: STRATEGIC MANAGEMENT INPUTS CHAPTER 1:

Transcript:PART 1: STRATEGIC MANAGEMENT INPUTS CHAPTER 1::
PART 1: STRATEGIC MANAGEMENT INPUTS CHAPTER 1: Strategic Management & Strategic Competitiveness THE STRATEGIC MANAGEMENT PROCESS FIGURE 1.1 The Strategic Management Process KNOWLEDGE OBJECTIVES KNOWLEDGE OBJECTIVES IMPORTANT DEFINITIONS ● STRATEGIC COMPETITIVENESS - achieved when a firm successfully formulates and implements a value-creating strategy ● STRATEGY - an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage ● COMPETITIVE ADVANTAGE - when a firm implements a strategy that creates superior value for customers; competitors are unable to duplicate it or find too costly to imitate it IMPORTANT DEFINITIONS ● RISK - an investor’s uncertainty about the economic gains or losses that will result from a particular investment ● ABOVE-AVERAGE RETURNS - returns in excess of what an investor expects to earn from other investments with a similar amount of risk ● AVERAGE RETURNS - returns equal to those an investor expects to earn from other investments with a similar amount of risk INABILITY TO EARN AVERAGE RETURNS resulted first in decline and, eventually, failure ●Enjoyed considerable success early on ●Tried to enrich its traditional approach with more marketing and more attractive stores, demonstrating a lack of market understanding ● Declining book sales for large chain store retailers ● Should have been entrepreneurial, innovative, and market-oriented BORDERS - OPENING CASE - FAILURE EXAMPLE OPENING CASE ONCE A “GIANT,” BORDERS BECAME A “WEAKLING” ON ITS KNEES THE STRATEGIC MANAGEMENT PROCESS ■ FIRST: External environment and internal organization are analyzed to determine resources, capabilities, and core competencies—the sources of “strategic inputs.” ■ NEXT: Vision and mission are developed; strategies are formulated. ■ THEN: Strategies are implemented with the goal of achieving strategic competitiveness and above-average returns. ■ DYNAMIC PROCESS: Continuously changing markets and industry conditions must match evolving strategic inputs. THE STRATEGIC MANAGEMENT PROCESS Rational: the approach firms use to achieve strategic competitiveness and earn above-average returns FORMULATION and IMPLEMENTATION: the two types of strategic actions that must be simultaneously integrated to successfully employ the strategic management process THE STRATEGIC MANAGEMENT PROCESS The text is divided into three parts. THE COMPETITIVE LANDSCAPE ■ GLOBALIZATION - emergence of a global economy ■ TECHNOLOGY - rapid technological changes ■ INDUSTRY BOUNDARIES BLURRING ■ EXAMPLES - computer networks and telecommunications have blurred the boundaries of the entertainment industry ■ MSNBC is co-owned by NBC Universal and Microsoft ■ General Electric owns 49 percent of NBC Universal and Comcast