1、PowerPoint slides by:R.Dennis MiddlemistColorado State University-Strategic Management and Strategic Competitiveness-12Knowledge Objectives Studying this chapter should provide you with the strategic management knowledge needed to:Define strategic competitiveness competitive advantage,and above-aver
2、age returns.Describe the 21st-century competitive landscape and explain how globalization and technological changes shape it.Use the industrial organization(I/O)model to explain how firms can earn above-average returns.-13Knowledge Objectives(contd)Studying this chapter should provide you with the s
3、trategic management knowledge needed to:Use the resource-based model to explain how firms can earn above-average returns.Describe strategic intent and strategic mission and discuss their value.Define stakeholders and describe their ability to influence organizations.Describe the work of strategic le
4、aders.Explain the strategic management process.-14Definitions Strategic CompetitivenessWhen a firm successfully formulates and implements a value-creating strategy Sustainable Competitive AdvantageWhen competitors are unable to duplicate a companys value-creating strategy Strategic Management Proces
5、sThe full set of commitments,decisions,and actions required for a firm to achieve strategic competitiveness and earn above-average returns-15Definitions(contd)RiskAn investors uncertainty about the economic gains or losses that will result from a particular investment Average ReturnsReturns equal to
6、 those an investor expects to earn from other investments with a similar amount of risk Above-average ReturnsReturns in excess of what an investor expects to earn from other investments with a similar amount of risk-16The Strategic Management ProcessCopyright 2004 South-Western.All rights reserved.-
7、17Current Competitive Landscape A Perilous Business WorldInvestments required to compete on a global scale are enormousConsequences of failure are severe Important Elements of SuccessDeveloping strategyImplementing strategy-18Competitive LandscapeStrategic maneuvering among global and innovative com
8、batants-19Competitive Landscape:HypercompetitionHypercompetitionA condition of rapidly escalatingcompetition based on Price-quality positioning Competition to create new know-how and establish first-mover advantage Competition to protect or invade established product or geographic markets-110Global
9、Economy Global EconomyGoods,people,skills,and ideas move freely across geographic bordersMovement is relatively unfettered by artificial constraintsExpansion into global arena complicates a firms competitive environment-111Global Economy(contd)GlobalizationIncreased economic interdependence among co
10、untries as reflected in the flow of goods and services,financial capital,and knowledge across country bordersIncreased range of opportunities for companies competing in the 21st-century competitive landscape-112Country Competitiveness Rankings(Population over 20 Million)Country20022003United States1
11、2Australia23Canada32Malaysia46Germany54Taiwan67United Kingdom75France89Spain98Thailand1010Japan1111China1212Brazil130China140Korea1510Country20022003Colombia1620Italy1714South Africa1816India190India2017Brazil2115Philippines2218Romania230Mexico2419Turkey2523Russia2621Poland2722Indonesia2825Argentina
12、2926Venezuela3024SOURCE:From World Competitiveness Yearbook 2003,IMD,Switzerland.http:/www.imd.ch.wcy.esummary,April.Reprinted by permission.-113Technology and Technological Changes Rate of change of technology and speed at which new technologies become availablePerpetual innovationhow rapidly and c
13、onsistently new,information-intensive technologies replace older onesThe development of disruptive technologies that destroy the value of existing technology and create new markets-114Technological Change The Information AgeThe ability to effectively and efficiently access and use information has be
14、come an important source of competitive advantageTechnology includes personal computers,cellular phones,artificial intelligence,virtual reality,massive databases,electronic networks,internet trade-115Technological Changes Increasing Knowledge IntensityStrategic flexibility:set of capabilities used t
15、o respond to various demands and opportunities in dynamic and uncertain competitive environmentsOrganizational slack:slack resources that allow the firm flexibility to respond to environmental changesCapacity to learn-116I/O Model of Above-Average Returns The industry in which a firm competes has a
16、stronger influence on the firms performance than do the choices managers make inside their organizationsIndustry properties include veconomies of scalevbarriers to market entryvdiversificationvproduct differentiationvdegree of concentration of firms in the industry-117Four Assumptions of the I/O Mod
17、elExternal environment imposes pressures and constraints that determine strategies leading to above-average returns12Most firms competing in an industry control similar strategically relevant resources and pursue similar strategiesResources used to implement strategies are highly mobile across firms
18、34Organizational decision makers are assumed to be rational and committed to acting in the firms best interests(profit-maximizing)-118I/O Model of Above-Average ReturnsExternal EnvironmentsGeneralEnvironment-119The I/O Model ofAbove-Average ReturnsThe External Environment-120An Attractive IndustryTh
19、e External EnvironmentThe I/O Model ofAbove-Average Returns-121The I/O Model ofAbove-Average ReturnsThe External EnvironmentAn Attractive IndustryStrategy Formulation-122Assets and SkillsThe I/O Model ofAbove-Average ReturnsThe External EnvironmentAn Attractive IndustryStrategy Formulation-123Strate
20、gy ImplementationThe I/O Model ofAbove-Average ReturnsThe External EnvironmentAn Attractive IndustryStrategy FormulationAssets and Skills-124Superior ReturnsThe I/O Model ofAbove-Average ReturnsThe External EnvironmentAn Attractive IndustryStrategy FormulationAssets and SkillsStrategy Implementation
21、-125Five Forces Model of Competition An industrys profitability results from interaction amongSuppliersBuyersCompetitive rivalry among firms currently in the industryProduct substitutesPotential entrants to the industry-126Five Forces Model of Competition(contd)Firms earn above average returns byPro
22、ducing standardized products or servicesManufacturing differentiated products for which customers are willing to pay a price premium-127Resource-Based Model of Above-Average Returns Each organization is a collection of unique resources and capabilities that provides the basis for its strategy and th
23、at is the primary source of its returns Capabilities evolve and must be managed dynamically-128Resource-Based Model of Above-Average Returns(contd)Differences in firms performances are due primarily to their unique resources and capabilities rather than structural characteristics of the industry Fir
24、ms acquire different resources and develop unique capabilities-129Resource-Based Model of Above-Average Returns(contd)-130Resources and Capabilities ResourcesInputs into a firms production processvCapital equipmentvSkills of individual employeesvPatentsvFinancesvTalented managers CapabilitiesCapacit
25、y of a set of resources to perform in an integrative mannerA capability should not bevSo simple that it is highly imitablevSo complex that it defies internal steering and control-131The Resource-Based Model of Above-Average ReturnsResources-132The Resource-Based Model of Above-Average ReturnsCapabil
26、ityResources-133The Resource-Based Model of Above-Average ReturnsCompetitive AdvantageCapabilityResources-134The Resource-Based Model of Above-Average ReturnsAn Attractive IndustryCompetitive AdvantageCapabilityResources-135The Resource-Based Model of Above-Average ReturnsStrategy ImplementationAn A
27、ttractive IndustryCompetitive AdvantageCapabilityResources-136The Resource-Based Model of Above-Average ReturnsSuperior ReturnsStrategy ImplementationAn Attractive IndustryCompetitive AdvantageCapabilityResources-137Key Criteria of Resources and CapabilitiesValuableResources and capabilities are val
28、uable when they allow a firm to take advantage of opportunities or neutralize threats in external environment RareResources and capabilities are rare when possessed by few,if any,current and potential competitors-138Key Criteria of Resources and Capabilities Costly to ImitateResources and capabiliti
29、es are costly to imitate when other firms either cannot obtain them or are at a cost disadvantage in obtaining them NonsubstitutableResources and capabilities are nonsubstitutable when they have no structural equivalents-139Core Competencies When the four key criteria of resources and capabilities a
30、re met,they become core competencies Core competencies serve as a source of competitive advantage Managerial competencies are especially important-140How Resources and Capabilities Provide Competitive Advantage-141Resources and Capabilities,Core Competencies,and Outcomes-142Strategic Intent Internal
31、ly focused The leveraging of a firms resources,capabilities and core competencies to accomplish the firms goals Exists when all employees and levels of a firm are committed to the pursuit of a specific,significant performance criterion-143Strategic Mission Externally focused A statement of a firms u
32、nique purpose and the scope of its operations in product and market termsEstablishes a firms individuality and is inspiring and relevant to all stakeholdersProvides general descriptions of the firms intended products and its markets-144Stakeholders Individuals and groups who can affect,and are affec
33、ted by,the strategic outcomes achieved and who have enforceable claims on a firms performance Claims are enforced by the stakeholders ability to withhold essential participation-145The Three Stakeholder Groups-146Capital Market Stakeholders Shareholders and lenders expect the firm to preserve and en
34、hance the wealth they have entrusted to it Returns should be commensurate with the degree of risk to the shareholder-147Product Market Stakeholders CustomersDemand reliable products at low prices SuppliersSeek loyal customers willing to pay highest sustainable prices for goods and services Host comm
35、unitiesWant companies willing to be long-term employers and providers of tax revenues while minimizing demands on public support services Union officialsWant secure jobs and desirable working conditions-148Organizational Stakeholders Employees Expect a dynamic,stimulating and rewarding work environm
36、entAre satisfied by a company that is growing and actively developing their skills-149Stakeholder Involvement Two issues affect the extent of stakeholder involvement in the firmCapital MarketProduct MarketOrganizational-150Strategic Leaders People responsible for the design and execution of strategi
37、c management processes Decisions they make includeHow resources will be developed or acquiredAt what price resources will be obtainedHow resources will be used-151Organizational Culture The complex set ofIdeologiesSymbolsCore valuesthat are shared throughout the firm,that influence how the firm cond
38、ucts business-152Mapping an Industrys Profit Pools Define the pools boundaries Estimate the pools overall size Estimate the size of the value-chain activity in the pool Reconcile the calculations-153Strategic Management Process Study the external and internal environments Identify marketplace opportunities and threats Determine how to use core competencies Use strategic intent to leverage resources,capabilities and core competencies and win competitive battles Integrate formulation and implementation of strategies Seek feedback to improve strategies
