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Definition of strategy
The set of goal-directed action a firm takes to gain and sustain superior performance
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What are the three elements of a good strategy
- Diagnosis of the competitive challenge
- A guiding policy to address the competitive challenge
- A set of coherent actions to implement the firm's guiding policy
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The three integrative management tasks required for a successful strategy
- Analysis
- Formulation
- Implementation
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Competitive advantage is judged relative to
Other competitors or the industry average
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How can a firm obtain competitive advantage
- Create more value for customers while keeping its cost comparable to competitors
- Provide the value equivalent to competitors but at a lower cost
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A firm able to outperform competitors for a prolonged period of time has
A sustained competitive advantage
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A firm that continuously underperforms its rivals or the industry average has
A competitive disadvantage
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Two or more firms that perform at the same level have
competitive parity
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An effective strategy requires that _______ _________ be recognized and addressed
strategic trade-offs
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A firm's performance is more closely related to its managers' actions (________) than to the external circumstances surrounding it (_________)
- Firm effects
- Industry effects
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Individuals or groups that have a claim or interest in the performance and continued survival of the firm
Stakeholders
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Stakeholder group which includes stockholders, employees and board members
Internal Stakeholders
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Stakeholder group that includes customers, suppliers, alliance partners, creditors, unions, communities, and governments at various levels
External stakeholders
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Effective management of what is necessary to ensure the continued survival of the firm and to sustain any competitive advantage
Stakeholders, the organization, groups or individuals that can materially affect or are affected by the action of a firm
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Considers the needs of different stakeholders, which enables the firm to perform optimally and to live up to the expectations of good citizenship
Stakeholder impact analysis
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What three attributes do managers pay particular attention to in a stakeholder impact analysis
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Questions asked during the 5 step process of a stakeholder impact analysis
- Who are our stakeholders?
- What are our stakeholders' interests and claims?
- What opportunities and threats do our stakeholders present?What economic, legal, and ethical responsibilities do we have to our stakeholders?
- What should we do to effectively address stakeholder concerns?
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A model that links three interdependent strategic management tasks that , together, help managers plan and implement strategy that can improve performance and result in competitive advantage
AFI Strategy framework
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Incidents that describe highly improbable but high-impact events
Black swan events
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Framework that helps firms recognize and address the economic, legal, social and philanthropic expectations that society has of the business enterprise at a given point in time
Corporate social responsibility
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Diagnosis of the competitive advantage
Analysis
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Guiding policy to address the competitive challenge
Formulation
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Set of coherent actions to implement the firm's guiding policy
Implementation
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Four components of corporate social responsibility
- Economic
- Legal
- Ethical
- Philanthropic
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Strategy is the science of _______ & ___________
Sucess and failure
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