Lecture 1 Notes
Terms:
- Strategic Competitiveness – The achievement of a successfully formulated and implemented value-creating strategy.
- Sustained/ Sustainable Competitive Advantage – A value-creating strategy that current and potential competitors are not simultaneously implementing or one that competitors are unable to duplicate the benefits.
- Above-Average Returns – Returns that exceed the returns that investors expect to earn from other investments with similar levels of risk.
- Strategic Management Process – The full set of commitments, decisions, and actions required for a firm to systematically achieve strategic competitiveness.
The elements of the strategic management process are dynamic and interrelated in nature. This dynamic nature is illustrated by feed back linkages among the three primary elements: strategic inputs, actions, and outcomes.
- Strategic Inputs – Information gained by scanning the internal and external environments are used to develop the organization's strategic intent and mission.
- Strategic Actions – Are guided by the organization's strategic intent and mission and are represented by strategies that are formulated or developed and subswquently impelemented or put into action.
- Strategic Outcomes – Are desired results, such as strategic competitiveness and above-average returns. These outcomes are the results of successfully formulated and implemented value-creating strategies that other organizations are unable to duplicate.
- Feedback – Helps the organization continuously adjust or revise strategic inputs and actions in order to achieve the desired strategic outcomes.
Other Notes:
One of the challenge of strategic managers is to develop strategies that will result in success not only today, but also tomorrow. With our dynamically changing global environment this is difficult.
Organizations easily copy one another:
- Amazon.com – Barnes & Noble
- Charles Schwab's internet
- Patton in the pharmaceutical industry.
In their book "In Search of Excellence," published in 1982, Peters and Waterman describe a landscape where companies are likened to rafts on a wild river. This has become even more true today. Computing power increases substantially every 18 months and the Internet has brought information into the our homes that we only dreamed about 20 years ago.
Today's competitive landscape (environment) makes it an especially exciting time to graduate and go out into the business world.
- Information Technology – rapidly changing information and communications.
- Global Economy – Making the world smaller.
Industries are becoming boundariless:
- GE is a major government contractor, consumer products, and entertainment
- Cable TV industry – Entertainment as well as information (roadrunner)
- Disney – Theme parks, cable, motion pictures, newspapers.
Companies are globalizing:
- Amway – Japan most profitable
- Home Depot – South American
- Walmart – Mexico and China
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