Strategic Management &

Strategic Competitiveness
Chapter One

2006 by Nelson, a division of Thomson Canada Limited.

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Strategic
Inputs

Chapter 4
Internal
Environment

Strat. Intent
Strat. Mission

Strategy Formulation
Chapter 5
Bus. - Level
Strategy

Chapter 6
Chapter 7
Competitive Corp. - Level
Dynamics
Strategy

Chapter 9
Chapter 8
Acquisitions & International
Strategy
Restructuring
Strategic
Outcomes

Strategic Actions

Chapter 3
External
Environment

Chapter 2
Above Average
Returns

Chapter 10
Cooperative
Strategies

Chapter
Chapter 11
Strategic
Strategic
Competitiveness
Competitiveness

The Strategic

Management
Process

Strategy Implementation
Chapter 11
Corporate
Governance

Chapter 12
Structure
& Control

Chapter 13 Chapter 14
Strategic Entrepreneurship
Leadership & Innovation

Feedback

2006 by Nelson, a division of Thomson Canada Limited.

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What is Strategy?
An integrated and coordinated set of
commitments & actions designed to
exploit core competencies and gain a
competitive advantage.

2006 by Nelson, a division of Thomson Canada Limited.

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Core Competencies: Resources

and Capabilities
Resources: Inputs into a firms production
process, such as capital equipment, skills of
individual employees, patents, finances, and
talented managers.
Capability: The capacity for a set of resources to
perform a task or an activity in an integrated
manner.
Core competencies are resources and
capabilities that serve as a source of competitive
advantage for a firm over its rivals.
2006 by Nelson, a division of Thomson Canada Limited.

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Core competencies
Manufacturing excellence
Exceptional quality control
Ability to provide better products
Superior design capability
Innovativeness in developing new products
A strong understanding of customer needs and tastes

2006 by Nelson, a division of Thomson Canada Limited.

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What is Strategy?
An integrated and coordinated set of
commitments & actions designed to
exploit core competencies and gain a
competitive advantage.

2006 by Nelson, a division of Thomson Canada Limited.

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Types of Strategy
General Strategy
Corporate Level Strategy
Competitive Strategy/ Business Level Strategy
Functional Strategy
Operating Strategy

2006 by Nelson, a division of Thomson Canada Limited.

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Desired Strategic Outcomes

Strategic Competitiveness
Achieved when a firm successfully formulates
and implements a value-creating strategy.

Sustained Competitive Advantage

Occurs when a firm develops a strategy that
competitors are not simultaneously implementing.
Provides benefits which current and potential
competitors are unable to duplicate.

Above-Average Returns
Returns in excess of what an investor expects to
earn from other investments with similar risk.
2006 by Nelson, a division of Thomson Canada Limited.

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Important definitions
Risk
An investors uncertainty about the economic
gains or losses resulting from a particular
investment.

Average returns

Returns equal to what an investor expects from

other investments with similar amount of risk.

Strategic management process

The full set of commitments decisions and actions
required for a firm to achieve strategic
competitiveness and earn above average returns.
2006 by Nelson, a division of Thomson Canada Limited.

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The Strategic Management Process

The full set of commitments, decisions,

and actions required for a firm to
achieve strategic competitiveness and
earn above-average returns.

2006 by Nelson, a division of Thomson Canada Limited.

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Alternative Models of Superior Returns

Industrial
Organization
Model

O
I

ResourceBased
Model

The External Environment

Resources

An Attractive Industry

Capabilities

Strategy Formulation

Competitive Advantage

Assets and Skills

An Attractive Industry

Strategy Implementation

Strategy Implementation

Superior Returns

Superior Returns

2006 by Nelson, a division of Thomson Canada Limited.

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Valuable
Rare
Costly to imitate
Organized to be
exploited

ResourcesandCapabilities

Four Attributes of Resources and

Capabilities (Competitive Advantage)
Allow the firm to exploit opportunities or
neutralize threats in its external
environment.
Possessed by few, if any, current and
potential competitors.
When other firms cannot obtain them or
must obtain them at a much higher cost.
The firm is organized appropriately to
obtain the full benefits of the resources in
order to realize a competitive advantage.

2006 by Nelson, a division of Thomson Canada Limited.

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Resources and capabilities that

meet these four criteria become a source
of:

Rare
Costly to imitate
Organized to be
exploited

ResourcesandCapabilities

Valuable

CoreCompetencies

2006 by Nelson, a division of Thomson Canada Limited.

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Core Competencies are the basis for

a firms
Competitive
advantage
Strategic
competitiveness

CoreCompetencies

Ability to earn
above-average
returns
2006 by Nelson, a division of Thomson Canada Limited.

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Intended, Emergent and Realized Strategies

2006 by Nelson, a division of Thomson Canada Limited.

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CEOs ranking of business importance

1.

A strong & well thought out strategy

2.

Maximizing customer satisfaction & loyalty

3.

Business leadership, quality products & services

4.

Concern for consistent profits

5.

Strong & consistent profits

2006 by Nelson, a division of Thomson Canada Limited.

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Stakeholders

2006 by Nelson, a division of Thomson Canada Limited.

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Organizational strategists
Top level managers, executives, top
management team, or general managers

2006 by Nelson, a division of Thomson Canada Limited.

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