Chapter 5 - Business-Level Strategy: Creating and Sustaining Competitive Advantages Learning Objectives 1.

The central role of competitive advantage in the study of strategic management. 2. The three generic strategies: overall cost leadership, differentiation, and focus. 3. Successful attainment of generic strategies o Can improve a firms relative power compared to the five forces Five forces determine an industrys average profitability 4. The pitfalls managers must avoid in striving to attain generic strategies 5. Combining the generic strategies of overall cost leadership and differentiation. 6. The importance of considering the industry life cycle o Helps to determine a firms business-level strategy and its relative emphasis on functional area strategies and value-creating activities. 7. Repositioning o Turnaround strategies and a dynamic perspective on industry change and evolution Enable a firm to reposition its competitive position in an industry. Types of Sustainable Competitive Advantages: Three Generic Strategies 1. Overall Cost Leadership 2. Differentiation or Benefit Leadership 3. Focus or Niche These help firm overcome the five forces and achieve competitive advantage o Four points to consider about generic strategies i. General tactics ii. Value Chain iii. Specific Tactics necessary for the strategy to be effective iv. +/- of each considering environment Combination Strategies: Integrating Overall Low Cost and Differentiation Why do it? What is the goal? o Stuck in the middle Three Combination Approaches o Four points to consider about combination strategy Industry Life-Cycle States: Strategic Implications How does Life Cycle affect potential strategy? Turnaround Strategies in the Life Cycle

Chapter 6 - Corporate-Level Strategy: Creating Value through Diversification Learning Objectives 1. How to create value through diversification. 2. The reasons for the failure of many diversification efforts. 3. Related diversification to achieve synergistic benefits 4. Unrelated diversification to attain synergistic benefits 5. Ways of engaging in diversification 6. +/- of Real Options Analysis (ROA) for making resource allocation decisions 7. Managerial behaviors that can erode the creation of value. Diversification What business should we be in? How can we create value? Synergy Creating Value 1. Related Diversification Economies of Scope and Revenue Enhancement o Leveraging Core Competencies What are they? Why are they important? Three Criteria of Core Competencies o Sharing Activities Market Power o Pooled negotiating power o +/- Vertical Integration Transaction Cost Economics 2. Unrelated Diversification: Financial Synergies Parenting, Restructuring, Portfolio Management Means to Achieve Diversification 1. Merger and Acquisition 2. Joint Venture 3. Strategic Alliance 4. Internal Development Strategic Alliances and Joint Ventures: Cooperation and Pooling Resources Why do it? o New Markets, Cut Costs, Technology Challenges? o Partner improper, compatible, trust Managerial Motives Can Erode Value Creation

Chapter 7 - International Strategy: Creating Value in Global Markets Learning Objectives 1. The importance of international expansion as a viable diversification strategy. 2. The sources of national advantage Why an industry in a given country is more (or less) successful than the same industry in another country. 3. +/- associated with international expansion Emerging trend for greater offshoring and outsourcing activity. 4. The two opposing forces that firms face when entering international markets. Cost reduction and adaptation to local markets 5. +/- of the four basic strategies International, global, multidomestic, and transnational. 6. +/- of the four basic types of entry strategies Exporting, Licensing and Franchising, Alliance and JV, Subsidiaries The Global Economy +/- for firm when Internationalizing Factors Affecting a Nations Competitiveness Factor Conditions Demand Conditions Related and Supporting Industries Firm Strategy, Structure and Rivalry Porters Diamond of National Advantage: What is It? Why use it? +/- Associated with Internationalization Outsourcing and Offshoring Two Opposing Pressures: Reducing Costs and Adapting to Local Markets Opposing Pressures and Four Strategies: What are they and what are the +/ International Strategy Global Strategy Multidomestic Strategy Transnational Strategy Entry Modes of International Expansion: What are they and what are the +/ Exporting Licensing and Franchising Strategic Alliances and Joint Ventures o M&A too, but not in book! Wholly Owned Subsidiaries

Chapter 8 - Entrepreneurial Strategy and Competitive Dynamics Learning Objectives 1. The role of opportunities, resources, and entrepreneurs in successfully pursuing new ventures. 2. The role of new ventures and small businesses in the U.S. economy. 3. Three types of entry strategies commonly used to launch a new venture. pioneering, initiative, and adaptive 4. How the generic strategies of overall cost leadership, differentiation, and focus are used by new ventures and small businesses. 5. How competitive actions may launch a cycle of actions and reactions among close competitors. 6. The components of competitive dynamics analysis new competitive action , threat analysis, motivation and capability to respond, types of competitive actions, and likelihood of competitive reaction. Recognizing Entrepreneurial Opportunities Entrepreneurship New value can be created in: o Start-up ventures o Major corporations o Family-owned businesses o Non-profit organizations o Established institutions Schumpeter: o Products, Processes, Markets, Materials, Organizational Structure Entrepreneurial Leadership Individuals are important what makes them so? Entrepreneurial Entry Strategies Pioneer, imitative, adaptive Entry Strategies, Generic strategies, and combination strategies How does this tie to generic business level strategies? Model of Competitive Dynamics We can/should expect our rivals to respond and vice versa o What is the model for this? Five Hardball Strategies/Tactics we can take