BUS 4385: Strategic Management 2023 with complete solution

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 A firm has this when it implements a strategy that creates superior value for customers and competitors are unable to duplicate or find too costly to try to imitate. Above Average Returns Returns in excess of what an investor expects to earn from other investments with a similar amount of risk. Risk An investor's uncertainty about the economic gains or losses that will result from a particular investment. Strategic Management Process Full set of commitment, decisions, and actions required for a firm to achieve strategic competitiveness and earn above average returns. Strategic Flexibility Set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment. I/O Model of Above-Average Returns Industrial Organization: Explains the external environment's dominant influence on a firm's strategic actions. This model specifies that the industry or segment where the firm chooses to compete has a stronger influence on performance than do the choices managers make inside their organizations. 1. The External Environment - study the external environment, especially the industry 2. An Attractive Industry - locate an industry with high potential for above-average returns 3. Strategy Formulation - identify the strategy called for byu the attractive industry to earn above average returns 4. Assets and Skills - develop or acquire assets and skills needed to implement the strategy 5. Strategy Implementation - use the firm's strength's (developed from step 4) to implement the strategy. 6. Superior Returns Resource-Based Model of Above-Average Returns Assumes each organization is a collection of unique resources and capabilities. The uniqueness is a basis of a firm's strategy and its ability to earn above average returns. 1. Resources - identify the firm's resources. Study its strengths and weaknesses compare to competitors 2. Capability - Determine the firm's capabilities. What do the capabilities allow the firm to do better than its competitors? 3. Competitive Advantage - Determine the potential of the firm's resources and capabilities in terms of competitive advantage. 4. An attractive Industry - Locate an attractive industry 5. Strategy Formulation and Implementation 6. Superior Returns Resources Inputs into a firm's production process, such as capital equipment, the skills of employees, patents, finances, and talented managers Capability the capacity for a set of resources to perform a task or an activity in an integrative manner Core Competencies Capabilities that serve as a source of competitive advantage for a firm over its rivals Vision A picture of what the firm wants to be and, in broad terms, what it wants to ultimately achieve -Stretches and challenges people -reflect the firm's values and aspirations -intended to capture the heart and mind of its employees and stakeholders -enduring -short and concise Mission Specifies the business in which the firm intends to compete and the customers it intends to serve -more concrete -deals more directly with product markets and customers Stakeholders The individuals, groups, and organization