Student Version

Chapter 1
Strategic Management and
Strategic Competitiveness

PART 1 STRATEGIC MANAGEMENT INPUTS

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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. by Charlie Cook
 Twenty-First Century Competition

Rapid
Globalization technological
change

Increasing
The global importance of
economy Todays knowledge
Competitive and people
Markets

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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 12
 Strategic Competitiveness

Formulation and
implementation of
a superior value-
creating strategy

Commitments and actions to achieve

above-average performance and returns

What the firm Competitive What the firm

will do advantage will not do

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 Hypercompetition

Strategic options in
Global
hypercompetitive Technology
economy
environments

Use of Protection or
Creation of new
price-quality invasion of
know-how and
positioning to established
use of first-mover
build market geographic or
advantage
presence product markets

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 Competitive Success Factors

Are market/ Make effective

customer-needs use of valuable
oriented competencies

Have an Offer new

entrepreneurial/ and innovative
opportunistic Top products and
mindset services
Corporate
Performers

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Technology and Technological Changes

Increasing rate of technology

diffusion and the emergence
of disruptive technologies

Technology trends
The information age: Internet
impacting the
and the global proliferation of
global competitive low-cost computing power
environment

Increasing knowledge intensity

as an intangible source of
competitive advantage

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 The Industry Organization (I/O) Model
of Above-Average Returns

Product
Diversification
differentiation

Barriers to Industry
market entry concentration

The Firms
Economies Market
of scale Strategic frictions
Choices

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 Five Forces Model of Competition

Substitutes

Industry
Suppliers Buyers
Rivalry

Potential
Entrants

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 The Resource-Based Model
of Above-Average Returns

Core
Capability competence
An integrated A source of
set of resources competitive
Resources advantage
Physical, human, and
organizational capital
(tangible and intangible)
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 Resources As Core Competencies

Costly to imitate

How resources
Rare become core Valuable
competencies

Nonsubstitutable

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 Strategic Decision Making

Industry Organization Resource-Based

(I/O) Model Model

Competitive
Strategy
Decision

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 Stakeholders

Can affect development of the

firms vision and mission

Primary Are affected by the strategic

stakeholders outcomes achieved by the firm
(individuals,
groups, and
Can have enforceable claims
organizations)
on the firms performance

Are influential when in control

of critical or valued resources

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 Classification of Stakeholders

Categories of
stakeholders

Capital Market Product Market Organizational

Stakeholders Stakeholders Stakeholders

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 Capital Market Stakeholders

Preservation
of investment

Conflicting
expectations of
Influence Risk/return
shareholders
and lenders

Enhanced wealth

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 Product Market Stakeholders

Types of product
market stakeholders

Host
Suppliers Customers Unions
communities

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 Organizational Stakeholders

Responsibilities of strategic leaders for development

and effective use of the firms human capital

Organizational
Education Strategic goals
culture and International
and skills of and global
ethical work assignments
employees standards
environment

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