Strategy Class Study Guide

Topics: Strategic management, Firm, Profit Pages: 10 (2402 words) Published: March 31, 2013
SI422 Midterm Review Guide
Module #1: Introduction____________________________________________________________________

Operational effectiveness
-The extent to which a firm performs similar activities better than rivals -Necessary but NOT sufficient for long-term competitive advantage Strategy
-Refers to performing different activities from rivals or performing them in a different way -Choose the right configuration of activities, incentives, systems. -Make the right trade-offs
-Strategy rests on unique activities
WINNER if you have a strategy that fits the environment
-A cogent configuration of activities, incentives, systems that supports successful positions and makes the right trade-offs

Porter: Firms can ONLY achieve sustainable competitive advantage if they have BOTH operations effectiveness and superior strategy.

Strategic Activities Map: Picture map that identifies key activities of a firm (their tradeoffs and the investments that they make) and identifies the linkage between them. The “web” of activities makes company strategies

Effective strategy requires tradeoff
Profits vary across industry and within industry, strategists’ job is to explain why industries & firms have high or low profits and help make recommendations to firms about what strategic plans may help improve their profitability.

Grant: “Strategy is not a detailed plan or program of instructions; it is a unifying theme that gives a coherence and direction to the actions and decisions of an individual or an organization.” Strategy is designed to help the firm use its internal resources and characteristic to deal with its industry and competitive environment.

Firm-Level Resources:
-Competitive Positioning
-Corporate Strategy
-Implementation & Ethics
-Technology Strategy
Strategy must FIT with the firm and its environment.

Grant: Differences between Corporate and Business Unit Strategy Corporate (Top Management):
Where to play? What businesses should we be in? What should the scope of the firm be (industries & markets)
New Business Development
Vertical Integration
Business Unit (Senior Managers):
How to win? How does the business compete? With products and Customers? How can the business achieve a sustainable completive advantage over its industry rivals? What activates should a firm pursue? Focus on certain “high value” activities and outsource others

Effective Implementation of Strategy is to have a long-term, simple and agreed objectives and to have a deep understanding of competitive environment and then to have objective appraisal of resources.

Mintzberg: It is incomplete to consider Strategy to be something that can simply be designed (analyzed); instead, it is important to recognize that Strategy emerges & changes over time, regardless of how carefully it is planned.

Mintzberg’s 5 P’s for Strategy
How leaders try to establish directions for organizations
A specific maneuver intended to outwit an opponent or competitors Pattern:
Consistency in action and behavior; whether or not intended
A niche chosen by the firm; tries to make best match between internal elements and external environment Perspective:
Analogous to an individual’s personality or innate skills; a firm’s culture or ideology __________________________________________________________________________________________ Module #2: Industry Analysis________________________________________________________________

Porter’s 5 Forces Analysis is intended to be applied at the industry level because each force acts, on average, across all firms in an industry. Goal of analysis:
1.To assess current average industry profitability of incumbent firms! 2.To help us understand the impact of trends & events on average industry profitability! 3.To help us make recommendations to firms on how to improve a)the overall industry environment &

b)the firm’s position...
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