CAPSTONE:Power Points:Chapter 1

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Contents

Slide 1 - Chapter 1: Strategic Management: Concepts and Cases 9e

Chapter 1 - Strategic Management: Concepts and Cases 9e

Slide 2 - Chapter 1: Strategic Management and Strategic Competitiveness

Overview: Eight content areas

1. Nature of Competition
2. The Competitive Landscape
3. I/O Model of Above-Average Returns (AAR)
4. Resource-Based Model of AAR
5. Vision and Mission
6. Stakeholders
7. Strategic Leaders
8. The Strategic Management Process

Slide 3 - Nature of Competition: McDonald’s

McDonald’s creates value for customers through:

Business-level strategies
Product Innovation
Upgrading existing restaurants
Listened to customers – value menu, healthier items, more convenience
Purchasing European property for future ______________
Corporate-level strategies
___________ of its interests in other restaurants

Slide 4 - Nature of Competition: Basic concepts

Strategic Competitiveness

Achieved when a firm formulate & implements a _____-creating strategy

Strategy

Integrated and coordinated set of commitments and actions designed to exploit ________ competencies and gain a competitive advantage

Competitive Advantage (CA)

Implemented strategy that competitors are unable to _______________ or find too costly to imitate

Above Average Returns

Returns in excess of what investor expects in comparison to other investments with _________ risk

Slide 5 - Nature of Competition: Basic concepts (Cont’d)

Risk

Investor’s _____________ about economic gains/losses resulting from a particular investment

Average Returns

Returns equal to what investor expects in comparison to other investments with similar risk

Strategic Management Process (SMP)

Full set of commitments, decisions and actions required for a firm to achieve strategic __________________ and earn above average returns

Slide 6 - The Strategic Management Process

Thestrategicmanagementprocess.jpg

Slide 7 - Chapter 1: Strategic Management and Strategic Competitiveness

Overview: Eight content areas

1. Nature of Competition
2. The Competitive Landscape
3. I/O Model of Above-Average Returns (AAR)
4. Resource-Based Model of AAR
5. Strategic Vision and Mission
6. Stakeholders
7. Strategic Leaders
8. The Strategic Management Process

Slide 8 - The Competitive Landscape

Introduction: The Competitive Landscape (CL)

Pace of change is rapid
Industry boundaries are _______________
Financial capital is more scarce and markets are increasingly volatile
Other CL characteristics: Economies of scale, advertising budgets not as effective as before, change in managerial mind-set from “traditional” to more flexible and _______________

Slide 9 - The Competitive Landscape (Cont’d)

Introduction: The Competitive Landscape (CL)

_____________________ – extremely intense rivalry among competing firms, characterized by
Escalating & increasingly aggressive competitive moves
Assumptions of market stability replaced with notion of _________________ and change
Two primary drivers of the competitive landscape:
The global economy
_______________________

Slide 10 - The Competitive Landscape (Cont’d)

The Global Economy

Goods, services, people, skills and ideas move freely across geographic borders
Europe, through the European Union (EU) is the world’s ________________ single market
EU vs U.S. GDP: 35% higher
Emerging major competitive forces: China & India
In summary: globalization increased economic ____________________ among countries as reflected in the flow of goods and services, financial capital, and knowledge across country borders

Slide 11 - The Competitive Landscape (Cont’d)

Technology and Technological Changes

3 categories:
1. Technology _______________ & disruptive technologies
2. The ____________________ age
3. Increasing knowledge ____________________

Slide 12 - The Competitive Landscape (Cont’d)

Technology and Technology Changes (Cont’d)

Technology ______________
Perpetual innovation: describes how new information-intensive technologies are replacing older forms
______________ to ______________ may be primary competitive advantage
12 – 18 month timeframe to gather info re: competitor R&D
Disruptive technologies
Technologies that
___________________ value of existing technology
Create new markets

Slide 13 - The Competitive Landscape (Cont’d)

Technology and Technology Changes (Cont’d)

The information age
Dramatic changes over last several years
Major technological developments effect how information is used and disseminated
__________________ provides infrastructure for information anytime, anywhere
Increasing knowledge _______________
Defined as information, intelligence & expertise and is the basis of technology and its application
Gained through experience, observations and inferences
Strategic _________________ – set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment

Slide 14 - Chapter 1: Strategic Management and Strategic Competitiveness

Overview: Eight content areas

1. Nature of Competition
2. The Competitive Landscape
3. I/O Model of Above-Average Returns (AAR)
4. Resource-Based Model of AAR
5. Strategic Vision and Mission
6. Stakeholders
7. Strategic Leaders
8. The Strategic Management Process

Slide 15 - Industrial Organizational (I/O) Model of Above-Average Returns (AAR)

Industrialorganizationiomodelofaboveaveragereturns.jpg

Slide 16 - Industrial Organizational (I/O) Model of Above-Average Returns (AAR)

Basic Premise – to explain the dominant influence of the ______________ environment on a firm's strategic actions and performance

Slide 17 - Industrial Organizational (I/O) Model of Above-Average Returns (AAR)

Underlying Assumptions

External environment imposes pressures and ________ that determine the strategies resulting in AAR
Most firms compete within a particular industry/segment
Control _________ strategically relevant resources
Pursue _________ strategies in light of those resources
Resources for implementing strategies are highly mobile across firms
Therefore any resource differences between firms will be short-lived
Organizational decision makers are rational and committed to acting in the firm's best interests, as shown by their profit-______________ behaviors

Slide 18 - Industrial Organizational (I/O) Model of Above-Average Returns (AAR)

Five-Forces Model (Michael Porter)

The 5 Forces includes
Suppliers, _______________, competitive rivalry, product substitutes and potential entrants
Reinforces the importance of ______________ theory
Analytical tool previously lacking in the field of strategy
Determines the nature/level of competition and profit potential in an industry
Suggests an industry’s profitability is an ________________ between these 5 forces

Slide 19 - The Resource-Based Model of AAR

Theresourcebasedmodelofaar.jpg

Slide 20 - The Resource-Based Model of AAR (Cont’d)

Basic Premise - a firm's _____________ [internal] resources & capabilities, in combination, are the basis for firm _______________ and AAR

Each firm’s performance difference across time emerges (vs industry’s structural characteristics)
Combined uniqueness should define the firms’ strategic actions
Resources are tangible and ______________

Slide 21 - The Resource-Based Model of AAR (Cont’d)

Resources

Inputs into a firm's production process
Includes capital equipment, employee ______________, patents, high-quality managers, financial condition, etc.
Basis for competitive advantage: When resources are valuable, rare, costly to imitate and ______________
Internal/firm-specific resources can be classified into three categories:
Physical
Things you can touch/feel = tangible
Human
People / employees
_______________________ capital
Relative to the firm itself

Slide 22 - The Resource-Based Model of AAR (Cont’d)

Capability

Capacity for a set of resources to perform a _______ or activity in an integrative manner

Core Competency

A firm’s resources and capabilities that serve as sources of competitive ______________ over its rival

Summary

A firm has superior performance because of
Unique resources and capabilities, and the combination makes them different, and _____________, than their competition – driving the competitive advantage

Slide 23 - Chapter 1: Strategic Management and Strategic Competitiveness

Overview: Eight content areas

1. Nature of Competition
2. The Competitive Landscape
3. I/O Model of Above-Average Returns (AAR)
4. Resource-Based Model of AAR
5. Vision and Mission
6. Stakeholders
7. Strategic Leaders
8. The Strategic Management Process

Slide 24 - Vision and Mission

Vision

Picture of what the firm wants to be and, in broad terms, what it ultimately wants to ____________
An effective vision statement is the responsibility of the leader who should work with others to form it
__________________ for the mission

Mission

Specifics business(es) in which firm intends to compete and customers it intends to serve
More ________________ than the vision

Slide 25 - Stakeholders

Basic Premise – a firm can effectively manage stakeholder ________________ to create a competitive advantage and outperform its competitors
Stakeholders are both individuals and groups
They can affect, and are affected by, the strategic outcomes/performance a firm achieves
Firms are not ________________ dependent on all stakeholders

Slide 26 - The Three Stakeholder Groups

Thethreestakholdergroups.jpg

Slide 27 - Stakeholders (Cont’d)

Classifications of Stakeholders

Capital Market
Expect returns _________________ with risk accepted by investments
Higher the dependency relationship, the more direct and significant firm’s response
Product Market
Customers, suppliers, ______________ communities, unions
Organizational
The employees

Slide 28 - Chapter 1: Strategic Management and Strategic Competitiveness

Overview: Eight content areas

1. Nature of Competition
2. The Competitive Landscape
3. I/O Model of Above-Average Returns (AAR)
4. Resource-Based Model of AAR
5. Strategic Vision and Mission
6. Stakeholders
7. Strategic Leaders
8. The Strategic Management Process

Slide 29 - Strategic Leaders

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

Decisive and committed to nurturing those around them
Organizational ___________________ emerges from & sustained by leaders
Complex set of ideologies, symbols and core values shared throughout the firm
Affects leaders/their work which in-turn shapes culture
Influences how the firm conducts __________________

Slide 30 - Strategic Leaders (Cont’d)

The Work of Effective Strategic Leaders

Hard work, thorough analysis, desire for accomplishment, tenacity
Must be able to “think seriously and deeply…about the purposes of the organizations they head or functions they perform, about strategies, tactics,…..and people…and about the important questions … they need to ask.”

Predicting Outcomes: Profit Pools (PP)

Anticipates their decisions relative to the PP
PP entails the total profits earned in an industry at all points along the value ____________

Slide 31 - Strategic Management Process

Rational approach used by firms to achieve _____________ competitiveness and earn above-average returns (AAR)

Figure 1.1 (Diagram of chapter relationships)

Part 1: Strategic Mgmt Inputs
Part 2: Strategic Actions: Strategy Formulation
Part 3: Strategic Actions: Strategy Implementation
Part 4: Cases
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