9ed Hitt Et All_Strategic Management and Strategic Competitiveness_Ch1_Week2

8/19/2019 9ed Hitt Et All_Strategic Management and Strategic Competitiveness_Ch1_Week2

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Authored by:

Marta Szabo White. Ph.D

Georgia State University

PART 1:

STRATEGICMANAGEMEN

T INPUTS

CHAPTER 1:STRATEGICMANAGEMENT &

STRATEGICCOMPETITIVENESS


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THE STRATEGICMANAGEMENT

PROCESS

FIGURE 1.1

TheStrategic

ManagementPrce!!


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KNOWLEDGEOBJECTIVES

" #e$ne !trategic cm%etitiene!!' !trateg('cm%etitie a)antage' a*e+aerage ret,rn!'an) the !trategic management %rce!!.

" #e!cri*e the cm%etitie -an)!ca%e an)

e%-ain h/ g-*a-i0atin an) techn-gica-change! !ha%e it.

" U!e the in),!tria- rgani0atin I2O3 m)e- t

e%-ain h/ $rm! can earn a*e+aerageret,rn!.

" U!e the re!,rce+*a!e) m)e- t e%-ain h/$rm! can earn a*e+aerage ret,rn!.


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KNOWLEDGEOBJECTIVES

" #e!cri*e i!in an) mi!!in an) )i!c,!! theira-,e.

" #e$ne !ta4eh-)er! an) )e!cri*e their a*i-it(

t in5,ence rgani0atin!.

" #e!cri*e the /r4 6 !trategic -ea)er!.

" E%-ain the !trategic management %rce!!.


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IMPORTANTDEFINITIONS

● STRATEGIC COMPETITIVENESS - achiee) /hen a $rm !,cce!!6,--(6rm,-ate! an) im%-ement! a a-,e+creating!trateg(

● STRATEGY - an integrate) an)cr)inate) !et 6 cmmitment! an)actin! )e!igne) t e%-it crecm%etencie! an) gain a cm%etitie

a)antage

● COMPETITIVE ADVANTAGE - /hena $rm im%-ement! a !trateg( that create!

!,%erir a-,e 6r c,!tmer!7 cm%etitr!


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IMPORTANTDEFINITIONS

● RISK - an ine!tr8! ,ncertaint(a*,t the ecnmic gain! r -!!e! that/i-- re!,-t 6rm a %artic,-ar ine!tment

● ABOVE-AVERAGE RETURNS - ret,rn! in ece!! 6 /hat an ine!tre%ect! t earn 6rm ther ine!tment!/ith a !imi-ar am,nt 6 ri!4

● AVERAGE RETURNS - ret,rn!e9,a- t th!e an ine!tr e%ect! t earn6rm ther ine!tment! /ith a !imi-aram,nt 6 ri!4


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INABILITY TO EARN AVERAGERETURNS re!,-te) $r!t in )ec-ine an)'

eent,a--(' 6ai-,re

"En(e) cn!i)era*-e !,cce!! ear-( n

"Trie) t enrich it! tra)itina- a%%rach /ithmre mar4eting an) mre attractie !tre!')emn!trating a -ac4 6 mar4et ,n)er!tan)ing" #ec-ining *4 !a-e! 6r -arge chain !treretai-er!" Sh,-) hae *een entre%rene,ria-'

;OR#ERS + OPENING CASE +FAI


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THE STRATEGICMANAGEMENT PROCESS

FIRST: Eterna- enirnment an) interna-rgani0atin are ana-(0e) t )etermine re!,rce!'ca%a*i-itie!' an) cre cm%etencie!>the !,rce! 6?!trategic in%,t!.@

NE!T: Vi!in an) mi!!in are )ee-%e)7!trategie! are 6rm,-ate).

THEN: Strategie! are im%-emente) /iththe ga- 6 achieing !trategic cm%etitiene!! an)a*e+aerage ret,rn!.

DYNAMIC PROCESS:Cntin,,!-( changing mar4et! an) in),!tr(cn)itin! m,!t match e-ing !trategic in%,t!.


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R"#$%&"': the a%%rach $rm! ,!e tachiee !trategic cm%etitiene!! an) earna*e+aerage ret,rn!

FORMULATION "&(IMPLEMENTATION:the t/ t(%e! 6 !trategic actin! that m,!t*e !im,-tane,!-( integrate) t !,cce!!6,--(em%-( the !trategic management %rce!!


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PART I: STRATEGICINPUTS

PART II:

STRATEGICACTIONS+

STRATEGFORMU


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THE COMPETITIVELANDSCAPE

GLOBALI)ATION - emergence 6 ag-*a- ecnm(

TECHNOLOGY - ra%i) techn-gica-change!

INDUSTRY BOUNDARIESBLURRING

E!AMPLES - cm%,ter net/r4! an)te-ecmm,nicatin! hae *-,rre) the *,n)arie! 6

the entertainment in),!tr( MSN;C i! c+/ne) *( N;C Unier!a- an)

Micr!6t Genera- E-ectric /n! D %ercent 6 N;C

Unier!a- an) Cmca!t /n! the remaining 1 %ercent

STRATEGIC MANAGEMENT PROCESS -


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HYPERCOMPETITION -*+""*#$.( /0

Mar4et in!ta*i-it( an) change Ra%i)-( e!ca-ating cm%etitin Aggre!!ie cha--enger!

Strategic mane,ering t e!ta*-i!h$r!t+ mer a)antage

Techn-g( in),!trie!

TWO DRIVERS- GLOBALI)ATION- TECHNOLOGY

Strategic 5ei*i-it( + im%rtant t-


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G%%(' !erice!' %e%-e' !4i--!'an) i)ea! me 6ree-( acr!!

gegra%hic *r)er!

N2 %%rt,nitie! an)cha--enge! emerge

C%34#$#$5 enirnment! are*ra)er an) increa!ing-( mre

cm%-e


THE GLOBAL ECONOMY


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THE GLOBAL ECONOMY T+ E6%4"& Unin ha!*ecme ne 6 the /r-)8! -arge!t

mar4et!' /ith JJ mi--in%tentia- c,!tmer!

C+$&" ha! *ecme the !ecn)

-arge!t ecnm( in the /r-)!,r%a!!ing La%an

I&($"' the /r-)8! -arge!t

)emcrac(' ha! an ecnm( that


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H6"2$ "'% &( G6"&7$$& #+ U&$#( S#"#


STRATEGIC FOCUS

GUAN!I S#%&8 re-atin!hi%! in /hich each%art( 6ee-! *-igate) t he-% the ther

K0 e-ement 6 )ing *,!ine!! in

China B6$'($&8 !trng re-atin!hi%! i! anim%rtant )imen!in 6 Chine!ec,-t,re7 G,ani i! a-! im%rtant /hencn),cting *,!ine!! in the Unite)


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THE GLOBAL ECONOMY H04*%34#$#$5 *,!ine!! enirnmentcha--enge! $rm! t recn!i)er /hich mar4et!t cm%ete in7 thi! %!itining i! mre critica-than eer

GE - hea)9,artere) in the U.S.' (et ,% tJ 6 it! reen,e gr/th thr,gh BJ1 /i--*e generate) 6rm ra%i)-( )ee-%ingecnmie! !,ch a! China an) In)ia

J90 I33'# - !,gge!t! that /e haeentere) a ne/ ecnmic era in /hich theg-*a- ecnm( /i-- *e mre -ati-e an)emerging ecnmie! !,ch a! ;ra0i-' China'

an) In)ia /i-- *e the mar )rier! 6 gr/th


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Globalization i!increa!ing ecnmic

inter)e%en)enceamng c,ntrie! an)their rgani0atin! a!re5ecte) in the 5/

6 g)! an)!erice!' $nancia-

ca%ita-' an)4n/-e)ge acr!!c,ntr( *r)er!.

G-*a-i0atin i! the%r),ct 6 a -argen,m*er 6 $rm!

cm%eting again!tne anther in an

increa!ing n,m*er 6

g-*a- ecnmie!.

High-( g-*a-i0e)

$rm! m,!t antici%ateeer+increa!ing

cm%-eitie! in their%eratin! a! g)!'!erice!' %e%-e' etc.me 6ree-( acr!!

gegra%hic *r)er!.


THE MARCH OFGLOBALI)ATION


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G-*a-i0atin ha! -e)t higher

%er6rmance

!tan)ar)! in 9,a-it('c!t' %r),ctiit('%r),ct intr),ctintime' an) %eratina-

ecienc(. The!e!tan)ar)! tran!-ate

an) im%act )me!tic+n-( $rm! a! /e--.

Free 5/ 6re!,rce! amngg-*a- ecnmie!'g-*a- !,rcing 6r

$rm!' g-*a-%,rcha!ing 6r

c,!tmer!' an) ag-*a- 6r,m 6r

/r4er! a-- !ere a! a4e( !,rce 6

cm%etitiea)antage 6r $rm!.

Firm! m,!t -earn thatin thi! t/ent(+$r!t

cent,r( cm%etitie

-an)!ca%e' n-( $rm!ca%a*-e 6 meeting'

i6 nt ecee)ing'g-*a- !tan)ar)!'

hae the ca%a*i-it( tearn a*e+aerage

ret,rn!.


THE MARCH OFGLOBALI)ATION


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Signi$cant time i!

re9,ire) 6r $rm! t-earn h/ tcm%ete in ne/

mar4et!' an)%er6rmance ma(!,Ker ),ring thi!

time.

ith g-*a-i0atin'

$rm! ma( er+)ier!i6(internatina--(' /hich

can hae !trngnegatie eKect! n a

$rm8! era--

%er6rmance.

It i! critica- 6r $rm!

cm%eting g-*a--( tremain !trategica--(cmmitte) t an)

cm%etitie in *th)me!tic an)internatina-

mar4et!.


THE RISKS OFGLOBALI)ATION


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THREE CATEGORIES %TECHNOLOGY TRENDS

Techn-g( i! !igni$cant-( a-tering the nat,re 6cm%etitin an) ena*-ing ,n!ta*-e cm%etitie

enirnment!

T*+&%'%80 D$96$%& & D$64#$5T*+&%'%8$

I&%3"#$%& A8

I&*"$&8 K&%2'(8 I&$#0


TECHNOLOGY AND TECHNOLOGICALCHANGES


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T*+&%'%80 D$96$%& -C"#8%0 1

T*+&%'%80 D$96$%& ; the !%ee) at/hich ne/ techn-gie! *ecme aai-a*-e an)are ,!e)7 ha! increa!e) !,*!tantia--( er the%a!t 1 t BJ (ear.

E7"34' 6 techn-g( )iK,!in: H/-ng it t4 t get the 6--/ing int B%ercent 6 U.S. hme!:

% Te-e%hne > (ear!" TV > B (ear!" Ra)i > BB (ear!




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T*+&%'%80 D$96$%& - C"#8%01

P4#6"' I&&%5"#$%&

P4#6"' I&&%5"#$%& - )e!cri*e! h/ra%i)-( an) cn!i!tent-( ne/' in6rmatin+inten!ie techn-gie! re%-ace -)er ne!

C%34#$#$5 P3$63 - the !hrter %r),ct-i6e c(c-e! re!,-ting 6rm ra%i) )iK,!in! 6 ne/techn-gie! %-ace a cm%etitie %remi,m n*eing a*-e t 9,ic4-( intr),ce ne/' innatieg)! an) !erice!

C%34#$#$5 A(5""8 - !%ee) t mar4et

/ith innatie %r),ct! i! a %rimar( !,rce 6




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T*+&%'%80 D$96$%& -C"#8%0 1

P4#6"' I&&%5"#$%& I&&%5"#$%& m,!t *e )erie) 6rm an,n)er!tan)ing 6 g-*a- !tan)ar)! an) g-*a-e%ectatin! in term! 6 %r),ct 6,nctina-it(

A44' - an ece--ent eam%-e 6 ra)ica-innatin *( a -arge e!ta*-i!he) $rm

T*+&%'%80 D$96$%& - t )iK,!e thetechn-g( an) enhance the innatin a-,e'$rm! nee) t *e innatie in incr%rating thene/ techn-g( int their %r),ct



THE COMPETITIVE


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T*+&%'%80 D$96$%& -C"#8%0 1

P4#6"' I&&%5"#$%& R"4$( T*+&%'%80 D$96$%& - n/ ma( ta4en-( 1B t 1 mnth! 6r $rm! t gatherin6rmatin a*,t re!earch an) )ee-%ment an)

%r),ct )eci!in! 6r their cm%etitr! P"# - ma( *e an eKectie %rtectin 6%r%rietar( techn-g( in a !ma-- n,m*er 6in),!trie!' e.g.' %harmace,tica-! P%4$#"0 S#"#8$ - man( $rm! 6ten )

nt a%%-( 6r %atent! t %reent cm%etitr! 6rm



THE COMPETITIVE


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T*+&%'%80 D$96$%& -C"#8%0 1

D$64#$5 T*+&%'%8$ D$64#$5 T*+&%'%8$ - techn-gie! that

)e!tr( the a-,e 6 an ei!ting techn-g( an)create ne/ mar4et!' man( time! re%re!enting

ra)ica- r *rea4thr,gh innatin E7"34': iP)!' iPa)!' iFi' an) the *r/!er I&(6#0 I&*63/ H"3( %D#%0( ; a )i!r,%tie r ra)ica- techn-g(create! a ne/ in),!tr(' there*( )e!tr(ing the

ei!ting in),!tr(7 /ith !,%erir re!,rce!'



THE COMPETITIVE


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T*+&%'%80 D$96$%& -C"#8%0 1

T*+&%'%80 "&( I&&%5"#$%& S#"#8$* F%*6: A44' A44'


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T*+&%'%80 D$96$%& -C"#8%0 1

T*+&%'%80 "&( I&&%5"#$%& S#"#8$* F%*6: A44' V"#$'$#0 - A%%-e %ri)e! an eam%-e 6techn-gica- entre%rene,r!hi% acr!! m,-ti%-ein),!trie! D$64#$5 T*+&%'%8$

" Innatin an) in),!tr( tran!6rmatin' e.g.'iP)' iPa)' an) the iPhne

" iP) an) the cm%-ementar( iT,ne! hae

re-,tini0e) h/ m,!ic i! !-) an) ,!e) *(cn!,mer!

THE COMPETITIVE

LANDSCAPETECHNOLOGY AND TECHNOLOGICAL

CHANGES

THE COMPETITIVE


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T+ I&%3"#$%& A8 -C"#8%0 =

D"3"#$* C+"&8 - in in6rmatin techn-g(

hae cc,rre) in recent (ear!' e.g.' %er!na-cm%,ter!' ce--,-ar %hne!' arti$cia- inte--igence'irt,a- rea-it(' ma!!ie )ata*a!e!' an) m,-ti%-e

!cia- net/r4ing !ite! C%34#$#$5 A(5""8 - the a*i-it( t

eKectie-( an) ecient-( acce!! an) ,!e in6rmatinha! *ecme an im%rtant !,rce 6 cm%etitiea)antage in irt,a--( a-- in),!trie!

I&%3"#$%& T*+&%'%80 - ena*-e! !ma-- $rm!



THE COMPETITIVE


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T+ I&%3"#$%& A8 -C"#8%0 =

C+"&8 - *th the %ace 6 change inin6rmatin techn-g( an) it! )iK,!in /i--cntin,e t increa!e

C%# - the )ec-ining c!t! 6 in6rmatin

techn-gie! an) the increa!e) acce!!i*i-it( tthem are ei)ent in the c,rrent cm%etitie-an)!ca%e

I&# - cntri*,ting 6actr t

h(%ercm%etitin



THE COMPETITIVE


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I&*"$&8 K&%2'(8I&$#0 - C"#8%0 >

K&%2'(8 - in6rmatin' inte--igence' an)e%erti!e are the *a!i! 6 techn-g( an) it!a%%-icatin C%34#$#$5 A(5""8 - in the 1J!' the

*a!i! 6 cm%etitin !hi6te) 6rm har) a!!et! t

intangi*-e re!,rce!7 4n/-e)ge i! a critica-rgani0atina- re!,rce an) an increa!ing-(a-,a*-e !,rce 6 cm%etitie a)antage I"&8$/' R%6* ; 4n/-e)ge gaine)

thr,gh e%erience' *!eratin' an) in6erence i!an intangi*-e re!,rce7 the a-,e 6 intangi*-e



THE COMPETITIVE


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I&*"$&8 K&%2'(8I&$#0 - C"#8%0 >

S#"#8$* C%34#$#$5& - enhance) 6rthe $rm that )ee-%! the a*i-it( t ca%t,reinte--igence' tran!6rm it int ,!a*-e 4n/-e)ge'an) )iK,!e it ra%i)-( thr,gh,t the $rm C%34#$#$5 A(5""8 - $rm! m,!t)ee-% e.g.' thr,gh training %rgram!3 an)ac9,ire e.g.' *( hiring e),cate) an)e%erience) em%-(ee!3 4n/-e)ge' integrate itint the rgani0atin t create ca%a*i-itie!' an)

then a%%-( it t gain a cm%etitie a)antage



THE COMPETITIVE


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I&*"$&8 K&%2'(8I&$#0 - C"#8%0 >

K&%2'(8 S4$''%5 - 4n/-e)ge 6a--!int cm%etitr8! han)!' e.g.' hiring 6%r6e!!ina- !taK2manager! *( cm%etitr!

K&%2'(8 D$96$%& - *eca,!e 6 the

%tentia- 6r !%i--er!' $rm! m,!t act 9,ic4-( t,!e their 4n/-e)ge in %r),ctie /a(!

S#"#8$* F'7$/$'$#0 - 6aci-itate! 4n/-e)ge)iK,!in t /here it ha! a-,e



THE COMPETITIVE


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I&*"$&8 K&%2'(8I&$#0 - C"#8%0 >

STRATEGIC FLE!IBILITY Set 6 ca%a*i-itie! ,!e) t re!%n) t ari,!)eman)! an) %%rt,nitie! ei!ting in a)(namic an) ,ncertain cm%etitie enirnment Ena*-e! the ca%acit( t -earn Faci-itate! c%ing /ith h(%ercm%etitin',ncertaint(' an) ri!4 Firm! !h,-) tr( t )ee-% !trategic5ei*i-it( in a-- area! 6 %eratin!



TWO MODELS OF STRATEGIC


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TWO MODELS OF STRATEGICDECISION MAKING

Firm! ,!e t/ mar m)e-! t he-% )ee-%their i!in an) mi!!in an) then ch!e ner mre !trategie! in %,r!,it 6 !trategiccm%etitiene!! an) a*e+aerage ret,rn!.

THE I?O MODEL OF ABOVE


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THE I?O MODEL OF ABOVE-AVERAGE RETURNS

Gr,n)e) in ecnmic!' the I2O m)e- ha!

Fir!t' the eterna- enirnment i! a!!,me) tim%!e %re!!,re! an) cn!traint! that)etermine the !trategie! that /,-) re!,-t ina*e+aerage ret,rn!.

Secn)' m!t $rm! cm%eting /ithin anin),!tr( r /ithin a !egment 6 that in),!tr(are a!!,me) t cntr- !imi-ar !trategica--(re-eant re!,rce! an) t %,r!,e !imi-ar

!trategie! in -ight 6 th!e re!,rce!.

F%6 U&('0$&8 A634#$%&

THE I?O MODEL ABOVE


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Thir)' re!,rce! ,!e) t im%-ement!trategie! are a!!,me) t *e high-( m*i-eacr!! $rm!' ! an( re!,rce )iKerence! thatmight )ee-% *et/een $rm! /i-- *e !hrt+-ie).

F,rth' rgani0atina- )eci!in+ma4er! area!!,me) t *e ratina- an) cmmitte) t

acting in the $rm8! *e!t intere!t!' a! !h/n* their r$t+maimi0in *ehair.

THE I?O MODEL % ABOVE-AVERAGE RETURNS

THE I?O MODEL % ABOVE


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The F$5 F%* M%(' 6cm%etitin i! an ana-(tica- t- ,!e) t he-%$rm! $n) the in),!tr( that i! the m!tattractie' a! mea!,re) *( it! %r$ta*i-it(

%tentia-.

The F$5 F%* M%(' !,gge!t!that an in),!tr(8! %r$ta*i-it( i.e.' it! rate 6ret,rn n ine!te) ca%ita- re-atie t it! c!t 6ca%ita-3 i! a 6,nctin 6 interactin! amng theF$5 F%*: !,%%-ier!' *,(er!' ria-r(' %r),ct!,*!tit,te!' an) %tentia- entrant! t thein),!tr(.


THE I?O MODEL ABOVE


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FIRMS CAN EARN ABOVE-AVERAGERETURNS:

● C%# L"(+$4 S#"#80 ; %r),cing !tan)ar)i0e)g)! r !erice! at c!t! *e-/ th!e 6 cm%etitr!

● D$9$"#$%& S#"#80 - %r),cing )iKerentiate)g)! r !erice! 6r /hich c,!tmer! are /i--ing t %a(a %rice %remi,m

The I2O m)e- !,gge!t! that "/%5-"5"8 #6&are earne) /hen $rm! are a*-e t eKectie-( !t,)( theeterna- enirnment a! the 6,n)atin 6r i)enti6(ingan attractie in),!tr( an) im%-ementing thea%%r%riate !trateg(.




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Re!earch $n)ing! !,%%rt the I2O m)e-' in thata%%rimate-( =@ 6 a $rm8! %r$ta*i-it( i!e%-aine) *( the in),!tr( in /hich it ch!e! tcm%ete.

H/eer' thi! re!earch a-! !h/! that > 6the ariance in $rm %r$ta*i-it( can *e attri*,te)t the $rm8! characteri!tic! an) actin!.

The!e $n)ing! !,gge!t that the Eterna- AND Interna- enirnment! in5,ence the cm%an(8!a*i-it( t achiee !trategic cm%etitiene!! an)earn a*e+aerage ret,rn!.



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FIGURE 1.B

The I2OM)e- 6A*e

AerageRet,rn!


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THE RESOURCE BASED


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THE RESOURCE-BASEDMODEL OF

ABOVE-AVERAGE RETURNST+ " FOUR *%34%& #% #+R%6*- B"( M%(':% Re!,rce!% Ca%a*i-itie!% Cre Cm%etencie!% Cm%etitie A)antage

T+ " FOUR *$#$" #+"# $%6* "&( *"4"/$'$#$ 6''', #+&

#+0 /*%3 C% C%34#&*$:% Va-,a*-e% Rare% C!t-( t Imitate% Nn!,*!tit,ta*-e

THE RESOURCE BASED


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ABOVE-AVERAGE RETURNS&Re!,rce! are in%,t! int a $rm8!%r),ctin %rce!!' !,ch a! ca%ita-e9,i%ment' the !4i--! 6 in)ii),a-em%-(ee!' %atent!' $nance!' an) ta-ente)manager!.

&A $rm8! re!,rce! are either tangi*-e rintangi*-e an) are c-a!!i$e) int threecategrie!: %h(!ica-' h,man' an)

rgani0atina- ca%ita-.

&Re!,rce! a-ne ma( nt (ie-) acm%etitie a)antage. Man( re!,rce!can either *e imitate) r !,*!tit,te) ertime' there6re' it i! )ic,-t t achiee an)

THE RESOURCE BASED


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THE RESOURCE-BASEDMODEL % ABOVE-

AVERAGE RETURNSA *"4"/$'$#0 i! the ca%acit( 6r a !et 6re!,rce! t %er6rm a ta!4 r an actiit( inan integratie manner.

Ca%a*i-itie! e-e er time an) m,!t *emanage) )(namica--( in %,r!,it 6 a*e+

aerage ret,rn!.

C% *%34#&*$ are re!,rce! an)ca%a*i-itie! that !ere a! a !,rce 6

cm%etitie a)antage.

KEY WORD: INTEGRATIVE

THE RESOURCE BASED


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ABOVE-AVERAGE RETURNSWhen the!e 6,r criteria are met' re!,rce!an) ca%a*i-itie! *ecme cre cm%etencie!:

THE RESOURCE BASED


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ABOVE-AVERAGE RETURNS

Fir!t' )iKerence! in $rm!8 %er6rmance!acr!! time are ),e %rimari-( t their ,ni9,ere!,rce! an) ca%a*i-itie! rather than thein),!tr(8! !tr,ct,ra- characteri!tic!.

Secn)' $rm! ac9,ire )iKerent re!,rce!an) )ee-% ,ni9,e ca%a*i-itie! *a!e) nh/ the( cm*ine an) ,!e the re!,rce!.

F%6 U&('0$&8A634#$%&

THE RESOURCE BASED


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THE RESOURCE-BASEDMODEL % ABOVE-

AVERAGE RETURNSThir)' that re!,rce! an) ca%a*i-itie! areNOT high-( m*i-e acr!! $rm!.

F,rth, that the )iKerence! in re!,rce!

an) ca%a*i-itie! are the *a!i! 6cm%etitie a)antage!.

A*e+aerage ret,rn! areearne) /hen the $rm ,!e!

it! a-,a*-e' rare' c!t-(+t+imitate' an) nn+!,*!tit,ta*-e re!,rce! an)ca%a*i-itie! t cm%ete

again!t it! ria-! in ne r

THE RESOURCE BASED


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ABOVE-AVERAGE RETURNSFIGURE 1. The

Re!,rce+;a!e) M)e-

6 A*eAerageRet,rn!

TWO MODELS OF STRATEGIC


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TWO MODELS OF STRATEGICDECISION MAKING

Ei)ence in)icate! that *th m)e-! (ie-)in!ight! that are -in4e) t !,cce!!6,--(!e-ecting an) ,!ing !trategie!.


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VISION

& V$$%& i! a %ict,re 6 /hat the $rm/ant! t *e an)' in *ra) term!' /hat it/ant! t ,-timate-( achiee.

& A i!in !tatement i! !hrt an) cnci!e'ma4ing it ea!( t remem*er.

& It artic,-ate! the i)ea- )e!cri%tin 6 thergani0atin an) gie! !ha%e t it! inten)e)6,t,re.


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& A $rm8! i!in ten)! t *e en),ring'/herea! it! mi!!in can change in -ight 6changing enirnmenta- cn)itin!.

& 5i!in !tatement! re5ect a $rm8! a-,e!an) a!%iratin! an) are inten)e) t ca%t,rethe heart an) min) 6 each !ta4eh-)er.

& Eec,tie! an) t%+-ee- manager! m,!t6rm,-ate an) im%-ement !trategie!cn!i!tent /ith the i!in.

VISION


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E7"34':

Our vision is to be the world’s best quickservice restaurant. (McDonald’s)

To make the automobile accessible toevery merican.(!ord Motor "om#any’s vision when

established by $enry !ord)

VISION


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MISSION

& The i!in i! the %6&("#$%& 6r the$rm8! mi!!in.

& The $rm8! mi!!in i! mre cncretethan it! i!in.

& A 3$$%& !%eci$e! the *,!ine!! r

*,!ine!!e! in /hich the $rm inten)! tcm%ete an) the c,!tmer! it inten)! t!ere.


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MISSION

E7"34':

%e the best em#loyer &or our #eo#le ineach community around the world anddeliver o#erational e'cellence to our

customers in each o& our restaurants.(McDonald’s)

Our mission is to be reconized by ourcustomers as the leader in a##licationsenineerin. e always &ocus on theactivities customers desire* we are hihlymotivated and strive to advance ourtechnical knowlede in the areas o&

material+ #art desin+ and &abrication


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MISSION

& Simi-ar t the i!in' a mi!!in !h,-)e!ta*-i!h a $rm8! in)ii),a-it( an) !h,-)*e in!%iratina- t a-- !ta4eh-)er!.

& A $rm8! i!in an) mi!!in are critica-a!%ect! 6 the strateic in#uts re9,ire) tengage in strateic actions that he-%

achiee !trategic cm%etitiene!! an)earn a*e+aerage ret,rn!.

VISION, MISSION AND


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VISION, MISSION ANDETHICS

The %r*a*i-it( 6 6rming an eKectie mi!!inincrea!e! /hen em%-(ee! hae a !trng !en!e 6the ethica- !tan)ar)! that g,i)e their *ehair!.

;,!ine!! ethic!

are aita-

%art6:

STAKEHOLDERS


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HORTSTAKEHOLDERS

Are there in)ii),a-!' gr,%!' an)rgani0atin! /h hae a !ta4e in the

rgani0atin

● Wh can aKect the $rm8! i!in an)mi!!inQ

● Are aKecte) *( the !trategic ,tcme!achiee)Q

● Hae en6rcea*-e c-aim! n the $rm8!%er6rmanceQ

C%34#$#$5 A(5""8

Firm! eKectie-( managing !ta4eh-)er

OSTAKEHOLDERS


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HORTSTAKEHOLDERS

& Organi0atin! are nt e9,a--(

)e%en)ent n a-- !ta4eh-)er!' ! nteer( !ta4eh-)er ha! the !ame -ee-6 in5,ence.

& The mre critica- an) a-,e) a!ta4eh-)er8! %artici%atin' thegreater a $rm8! )e%en)ence n it'/hich gie! the !ta4eh-)er mre

%tentia- in5,ence er the $rm.

& Manager! m,!t $n) /a(! taccmm)ate r in!,-ate the

rgani0atin 6rm the )eman)! 6

CLASSIFICATION OF


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Three gr,%! 6 !ta4eh-)er!:C

% Shareh-)er! an) the mar !,%%-ier! 6 a

$rm8! ca%ita-

% A $rm8! %rimar( c,!tmer!' !,%%-ier!' h!tcmm,nitie!' an) ,nin! re%re!enting the

/r46rce

% Firm8! em%-(ee!' inc-,)ing *th nn+manageria- an) manageria- %er!nne-

CLASSIFICATION OFSTAKEHOLDERS

Ca%ita- mar4et !ta4eh-)er!

Pr),ct mar4et !ta4eh-)er!

Organi0atina- !ta4eh-)er!

CLASSIFICATION OF


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FIGURE 1.D

The ThreeSta4eh-)er

Gr,%!

CLASSIFICATION OF


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Tra)e+K! m,!t *e ma)e in !it,atin! /here the*ectie! 6 ari,! !ta4eh-)er gr,%! )iKer r cn5ict.

% S+"+%'( in)ii),a-! an) gr,%! /h hae

ine!te) ca%ita- in a $rm in the e%ectatin 6 earning a%!itie ret,rn n their ine!tment!. The!e !ta4eh-)er!8right! are gr,n)e) in -a/! gerning %riate %r%ert(an) %riate enter%ri!e.

" C%&63 intere!t! are maimi0e) /hen the

9,a-it( an) re-ia*i-it( 6 a $rm8! %r),ct! are im%re)'*,t /ith,t high %rice!.

" High ret,rn! t c,!tmer! might cme at thee%en!e 6 -/er ret,rn! 6r ca%ita- mar4et !ta4eh-)er!an) ice+er!a.


C%&$*#7"34':

SMANAGING STAKEHOLDER


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S MANAGING STAKEHOLDER

CONFLICT

& Fir!t' a $rm m,!t thr,gh-( i)enti6(an) ,n)er!tan) a-- im%rtant!ta4eh-)er!.

& Secn)' it m,!t %ririti0e them' inca!e it cannt !ati!6( a-- 6 them.

& P%2 i! the m!t critica- criterin in%ririti0ing !ta4eh-)er!.

& Other criteria might inc-,)e the,rgenc( 6 !ati!6(ing each %artic,-ar!ta4eh-)er gr,% an) the )egree 6

im%rtance 6 each t the $rm8! a*e+

SMANAGING STAKEHOLDER


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S MANAGING STAKEHOLDER

CONFLICT

S T A K E

H O L D

E R

P R I O R I T

I E S


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CAPITAL MARKET


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BALANCING CONFLICTINGSHAREHOLDER GOALS

The ret,rn! that !hareh-)er! e%ect arecmmen!,rate /ith the )egree 6 ri!4 acce%te) /ith

th!e ine!tment!.CHALLENGING FOR MANAGERS:

" Sme !hareh-)er! /ant !hrt+term increa!e! inret,rn!

" Other! )e!ire *,i-)ing -ng+term cm%etitiene!!

O6ten -arge !hareh-)er! %re6er that the $rm minimi0eit! ,!e 6 )e*t *eca,!e 6 the ri!4 6 )e*t' it! c!t' an)the %!!i*i-it( that )e*t h-)er! hae $r!t ca-- er!hareh-)er! n the $rm8! a!!et! in ca!e 6 )e6a,-t.

CAPITAL MARKETSTAKEHOLDERS

PRODUCT MARKET


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& Th,gh a-- %r),ct mar4et !ta4eh-)er!are im%rtant' /ith,t c,!tmer!' the ther%r),ct mar4et !ta4eh-)er! are 6 -itt-ea-,e.

& C,!tmer! )eman) re-ia*-e %r),ct! atthe -/e!t %!!i*-e %rice!.

& H!t cmm,nitie! /ant cm%anie!/i--ing t *e -ng+term em%-(er! an)%ri)er! 6 ta reen,e /ith,t %-acingece!!ie )eman)! n %,*-ic !,%%rt

!erice!.

PRODUCT MARKET

STAKEHOLDERS

PRODUCT MARKET


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&

S,%%-ier! !ee4 -(a- c,!tmer! /h are/i--ing t %a( the highe!t !,!taina*-e %rice!6r the g)! an) !erice! the( receie.

& Unin cia-! are intere!te) in !ec,re *!' ,n)er high-( )e!ira*-e /r4ingcn)itin!' 6r the em%-(ee! the( re%re!ent.

& Pr),ct mar4et !ta4eh-)er! are genera--(!ati!$e) /hen a $rm8! %r$t margin re5ect!at -ea!t a *a-ance *et/een the ret,rn! tca%ita- mar4et !ta4eh-)er! an) ga-! 6%r),ct mar4et !ta4eh-)er!.

O UC

STAKEHOLDERS

ORGANI)ATIONAL


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& Em%-(ee! e%ect the $rm t%ri)e a )(namic' !tim,-ating' an)re/ar)ing /r4 enirnment.

& Em%-(ee! are ,!,a--( !ati!$e)/r4ing 6r a cm%an( that i!:

% Gr/ing

% Actie-( )ee-%ing their !4i--! t *eeKectie team mem*er!

% Meeting r ecee)ing g-*a- /r4!tan)ar)!

STAKEHOLDERS

ORGANI)ATIONAL


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& Internatina- a!!ignment! he-%c,-tiate em%-(ee !4i--! 6r the g-*a-cm%etitie -an)!ca%e.

& The %rce!! 6 managing e%atriateem%-(ee! an) he-%ing them *,i-)4n/-e)ge can hae !igni$cant eKect!n a $rm8! g-*a- cm%etence.

& T *e !,cce!!6,-' !trategic -ea)er!m,!t eKectie-( -eerage a $rm8!h,man ca%ita-.

STAKEHOLDERS

STRATEGIC LEADERS


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& S#"#8$* '"( " 4%4''%*"#( $& ($9 "" "&('5' % #+ 3 6$&8 #+#"#8$* 3"&"83 4%*#% '*# #"#8$* "*#$%& #+"#

+'4 #+ 3 "*+$5 $# 5$$%&"&( 6''' $# 3$$%&

& S6**6' #"#8$* '"( "(*$$5, *%33$##( #% &6#6$&8#+% "%6&( #+3, "&( "*%33$##( #% +'4$&8 #+ 3

*"# 5"'6 % "'' #"+%'(


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STRATEGIC LEADERS AND


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& V$$%&"0 S#"#8$* L"( em%ha!i0ent n-( maimi0ing !hareh-)er /ea-th' *,tmaimi0ing the intere!t! 6 a-- !ta4eh-)er!',n)er!cring a ciic an) %er!na-

cmmitment t cr%rate citi0en!hi%.

& Organi0atina- c,-t,re aKect! !trategic-ea)er! an) their /r4. In t,rn' !trategic-ea)er!8 )eci!in! an) actin! !ha%e a $rm8!c,-t,re.

& O8"&$."#$%&"' *6'#6 i! the !cia-energ( that )rie!>r 6ai-! t )rie>the

rgani0atin' the i)e-gie!' !(m*-!' an)

ORGANI)ATIONAL CULTURE

THE WORK OF EFFECTIVE


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STRATEGIC LEADERS

SUCCESSFUL STRATEGIC LEADERSHIPCHARACTERISTICS

& Har) /r4ing

" Em*race! )(namic cm%etitie-an)!ca%e

& Br,ta--( hne!t

& Tenaci,!

& Penchant 6r /anting the $rm an) it!%e%-e t accm%-i!h mre

& Strng !trategic rientatin

THE WORK OF EFFECTIVE


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STRATEGIC LEADERS

SUCCESSFUL STRATEGIC LEADERSHIPCHARACTERISTICS& Innatie thin4er

& E%-ratr( -earning 6 ne/ an) ,ni9,e6rm! 6 4n/-e)ge

& E%-itatie -earning' /hich a))!incrementa- 4n/-e)ge t ei!ting4n/-e)ge *a!e!

& G-*a- min)!et

& Dream! that cha--enge! an) energi0e! acm%an( i e i!in

9ed Hitt Et All_Strategic Management and Strategic Competitiveness_Ch1_Week2

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Transcript of 9ed Hitt Et All_Strategic Management and Strategic Competitiveness_Ch1_Week2