Strategic Decision Making

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Objectives Strategic Decision Making
What is strategic management? Why study global strategic management? Fundamental issues General Approach Current competitive landscape

Chapter 1

Strategic Management
Full set of commitments, decisions, and actions required to achieve strategic competitiveness and earn sustainable competitive advantage

Why study Strategic Management?
Expertise in global strategy is highly sought after Preparation for international assignments Needed for advancing to the top ranks of large and medium-sized firms Necessary knowledge for people working in smaller companies Good for non-business school students as well

Fundamental Issues in Strategy
Why do firms differ?


General Approach
Best strategy is the result of a fit between the internal and external aspect of the organization Need to think carefully of two key questions


Why are some firms more successful than others? Industry-based approach – SWOT analysis

How do firms behave?


What determines the scope of the firm? What determines the international success and failure of firms?



Does the firm possess advantages that will translate into profits? Does the firm environment permit these advantages to turn into profits?

1

Some Strategies of Well-known Cos
Grow larger (GE) Downsize (Avon, Sara Lee) Diversify (wal-Mart) Dominate niche (Starbucks) Outsource production process (Nike) Integrate production process (Armani) Become quality leader (Samsung, BMW) Cooperate with rivals (Sony, Philip Morris)

Power of Strategy – ‘Samsung’
Early 2000s, Samsung launched a strategy to revitalize its consumer electronics business Long regarded as a low quality brand Sought a quality leadership position
– – – –

Ex: Embraced DLP for HDTVs DLP is cheaper – but ‘fatter’ than Plasma Rave reviews Reputation improved since launch of DLP – more high end products

Technological Revolution
Internet supplies information in a manipulable form almost

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