BPol and Strat

when a firm successfully formulates and implements a value-creating strategy

an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage

when a firm implements a strategy competitors are unable to duplicate or find too costly to try to imitate

returns in excess of what an investor expects to earn from other investments with a similar amount of risk

an investor's uncertainty about the economic gains or losses that will result from a particular investment

the full set of commitments, decisions, and actions required for a firm (rational approach) to achieve strategic competitiveness and earn above-average returns

1. Strategic inputs - vision and mission after assessment of resources, capabilities, and competencies
2. strategic action - formulation and implementation of strategy
3. strategic outcomes - success results in strategic competitiveness and above average returns

a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment

Industrial Organization - to explain the dominant influence of the external environment on a firm's strategic actions and performance

1. Study the external environment, especially the industry environment
2. Locate an industry with high potential for above-average returns
3. Identify the strategy called for
4. Develop or acquire assets and skills needed to implement the strategy
5. Use the firm's strengths to implement the strategy

inputs into a firm's production process

the capacity for a set of resources to perform a task or an activity in an integrative manner

exist when resources have been purposely integrated to achieve a specific task or set or tasks

resources and capabilities that serve as a source of competitive advantage for a firm over its rivals

A firm's unique (internal) resources & capabilities, in combination, are the basis for firm strategy and above average returns

1. Identify the firm's resources, study SW compared to those of competitors
2. Determine the firm's capabilities. What do the capabilities allow the firm to do better than its competitors?
3. Determine the potential of the firm's resources and capabilities in terms of a competitive advantage.
4. Locate an attractive industry
5. Select a strategy that best allows the firm to utilize its resources and capabilities relative to opportunities in the external environment.

a picture of what the firm wants to be and, in broad terms, what it wants to ultimately achieve

specifies the business or businesses in which the firm intends to compete and the customers it tends to serve

valuable, rare, costly to imitate, and nonsubstitutable

the individuals and groups who can affect the vision and mission of the firm, are affected by the strategic outcomes achieved, and have enforceable claims on a firm's performance

Capital Market: shareholders, major suppliers of capital (e.g. banks). Expect returns commiserate with risk accepted by investments, higher the dependency relationship, the more direct and significant firm's response.

Product Market: Primary customers, suppliers, host communities, unions

Organizational: employees, managers, nonmanagers

people located in different parts of the firm using the strategic management process to help the firm reach its vision and mission

the complex set of ideologies, symbols, and core values that are shared throughout the firm and that influence how the firm conducts business

the total profits earned in an industry at all points along the value chain

extremely intense rivalry among competing firms, characterized by escalating/increasingly aggressive competitive moves and assumptions of market stability replaced with nothing of instability and change

global economy
- increased economic interdependence among countries as reflected in the flow of goods and services, financial capital, and knowledge across country borders

and technology
- technology diffusion (perpetual innovation)
-disruptive technology
- the information age
- increasing knowledge intensity

1. External environment imposes pressures and constraints that determine the strategies resulting in above-average returns
2. most firms compete within a particular industry/segment
3. resources for implementing strategies are highly mobile across firms
4. organizational decision makers are rational and committed to acting in the firm's best interests, as shown by their profit-maximizing behaviors

Industry Analysis

Supplier power, buyer power, competitive rivalry, product substitutes and potential entrants (barriers to entry)

composed of dimensions in the broader society that influences and industry and the firms within it

demographic, economic, political/legal, sociocultural, technological,, global, physical environment

the set of factors that directly influences a firm and its competitive actions and competitive responses (porters 5)

condition in the general environment that, if exploited, helps a company achieve strategic competitiveness

a condition in the general environment that may hinder a company's efforts to achieve strategic competitiveness

scanning: identifying early signals of environmental changes and trends
monitoring: detecting meaning through ongoing observations of environmental changes and trends
forecasting: developing projections of anticipated outcomes based on monitored changes and trends
assessing: determining the timing and importance of environmental changes and trends for firms strategies and their management

concerned with a population's size, age structure, geographic distribution, ethnic mix, and income distribution

refers to the nature and direction of the economy in which a firm competes or may compete

the arena in which organizations and interest groups compete for attention, resources, and a voice in overseeing the body of laws and regulations guiding the interactions among nations

concerned with society's attitudes and cultural values

includes the institutions and activities involved with creating new knowledge and translating that knowledge into new outputs, products, processes, and materials

relevant new global markets, existing markets that are changing, important international political events, and critical cultural and institutional characteristics of global markets

a group of firms producing products that are close substitutes

a set of firms that emphasize similar strategic dimensions and use a similar strategy

the set of data and information the firm gathers to better understand and better anticipate competitors' objectives, strategies, assumptions and capabilities

the network of companies that sell complementary goods or services or are compatible with the focal firm's own product or service

how companies gather and interpret information about their
competitors

analysis focuses on predicting competitors’ actions, responses and intentions

-what drives competitors
-what the competitor is doing and can do
-what the competitor believes about the industry
-what the competitor's capabilities are

...energy stuff. :|

potential and actual changes in the physical environment and business practices that are intended to positively respond to and deal with those changes (e.g. global warming, energy consumption, and sustainability)

the ability to study an internal organization in ways that are not dependent on the assumptions of a single country, culture, or context

measured by a product's performance characteristics and by its attributes for which customers are willing to pay

assets that can be seen and quantified

assets that are rooted deeply in the firm's history and have accumulated over time

allow the firm to exploit opportunities or neutralize threats in its external environment

capabilities that few, if any competitors possess

capabilities that other firms cannot easily develop

capabilities that do not have strategic equivalents

allows the firm to understand the parts of its operation that create value and those that do not

are involved with a product's physical creation, its sale and distribution to buyers, and its service after the sale

e.g. service, marketing & sales, outbound logistics, operations, inbound logistics

provide the assistance necessary for the primary activities to take place

e.g. firm infrastructure, HRM, technological development, procurement (supply chain)

the purchase of value-creating activity from an external supplier

an integrated and coordinated set o f commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets

process used to cluster people with similar needs into individual and identifiable groups

an integrated set of actions taken to produce goods or services with features that are acceptable to customers at the lowest cost, relative to competitors

an integrated set of actions taken to produce goods or services (at an acceptable cost) that customers perceive as being different in ways that are important to them

an integrated set of actions taken to produce goods or services that serve the needs of a particular competitive segment

involves engaging in primary and support activities that allow a firm to simultaneously pursue low cost and differentiation

a managerial innovation that emphasizes an organization's total commitment to the customer and to continuous improvement of every process through the use of data-driven, problem-solving approaches based on empowerment of employee groups and teams

firms operating in the same market, offering similar products, and targeting similar customers

the ongoing set of competitive actions and competitive responses that occur among firms as they maneuver for an advantageous market position

the set of competitive actions and competitive responses the firm takes to build or defend its competitive advantages and to improve its market position

occurs when firms compete against each other in several product or geographic markets

refer to all competitive behaviors, i.e. the total set of actions and responses taken by all firms competing within a market

concerned with the number of markets with which the firm and a competitor are jointly involved and the degree of importance of the individual markets to each

the extent to which the firm's tangible and intangible resources are comparable to a competitor's in terms of both type and amount

a strategic or tactical action the firm takes to build or defend its competitive advantages or improve its market position

a strategic or tactical action the firm takes to counter the effects of a competitor's competitive action

a market-based move that involves a significant commitment of organizational resources and is difficult to implement or reverse

a market-based move that is taken to fine-tune a strategy; it involves fewer resources and is relatively easy to implement and reverse

a firm that takes an initial competitive action in order to build or defend its competitive advantages or to improve its market position

a firm that responds to the first mover's competitive action, typically through imitation

a firm that responds to a competitive action a significant amount of time after the first mover's action and second mover's response

exists when the firm's goods or services meet or exceed customer's expectations

those in which a firm's competitive advantages are shielded from imitation commonly for long periods of time where imitation is costly (e.g pharmaceutical)

markets in which the firm's capabilities that contribute to competitive advantages aren't shielded from imitation and where imitation is often rapid and inexpensive (e.g. PC market)

markets in which the firm's competitive advantages are moderately shielded from imitation and where imitation is moderately costly (e.g. snacks)