Rubina Mahsud
1994 - $433 m
History of Strategy
Driven more by practical needs of business than by development of theory During: 1950s (size and complexity was an issue) 1960s (corporate planning became the norm) 1970s (diversification became the norm of corporate planning-product mix) 1980s (confidence in diversification and corporate planning was shaken)
Definition of Strategy
Strategy: A firms theory about how to gain competitive advantage
Eisners theory may have been: People will pay a premium price for extraordinary entertainment. We have the necessary resources to create extraordinary entertainment. Therefore, lets redeploy our resources in a different way and offer something extraordinary to people.
Mission
Objectives
Internal Analysis
Business Level
positioning a business
The Firm
Strategy
The Industry
Strategic Fit
Grant, 2010
Competitive Advantage
All other elements of the strategic management process are aimed at achieving competitive advantage
Competitive Advantage
The Ability to Create More Economic Value Than Competitors
TAB ONE TAB TWO TAB THREE
There must be something different about a firms offering vis-vis competitors offerings
If all firms strategies were the same, no firm would have a competitive advantage
Competitive advantage is the result of doing something different and/or better than competitors
Competitive Advantage
Two Types of Difference
1) Preference for the firms output people choose the firms output over others people are willing to pay a premium Example: Nordstrom 2) Cost advantage vis--vis competitors lower costs of production/distribution Example: Wal-Mart
Competitive Advantage
Temporary & Sustainable
Some competitive advantages are sustainable if: competitors are unable to imitate the source of advantage
Competitive Parity
The firms offerings are average People do not have a preference for the firms offering
The firm does not have a cost advantage over others Some things that may lead to competitive parity may still be critical to success (e.g., telephones)
Competitive Advantage
Measuring Competitive Advantage
Superior Economic Performance Is Viewed as Evidence of Competitive Advantage
it is rather easy to see the evidence of competitive advantage measuring the source of the advantage per se is typically impossible
Competitive Advantage
Measuring Competitive Advantage
Two Classes of Measures:
Competitive Advantage
Competitive
Advantage
Economic Returns
Above Normal exceeding expectations Normal
Parity
meeting expectations
Disadvantage Below Normal failing expectations
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This course is not about mere survival, it is about thrivingachieving competitive advantage
Two
Three
Strategy is about discovering and exploiting these
differences
Four