Business Strategy Study Guide

Topics: Strategic management, Barriers to entry, Competition Pages: 6 (1475 words) Published: September 19, 2012
Bstrat Test 1 Study Guide/Notes

60 multiple choice
Chapters 1-4
Porter “what is strategy”
“future retail wasteland” by stone and porter in bus. Week. Apr 16,2012
“Tata Takes on the World”
“for Successful innovation, sell imperfect products”
3-4 questions over Capsim

Chapter 1 from jacy’s notes
* Strategic competitiveness: when a firm successfully formulates and implements a value-creating strategy * Strategy: integrated and coordinated set of commitments and actions designed to exploit core competencies and gain competitive advantages * What the firm will and will not do

* Competitive Advantage- implementing a strategy that competitors are unable to duplicate or find too costly to try to imitate * Ex make something that competitors can’t duplicate * Ex too much $$$

* Above-Average Returns: returns in excess of what investor expects in comparison to other investments of similar risk. * Risk: Investor’s uncertainty about economic gains/losses resulting from a particular investment. * Average Returns: returns equal to what investor expects in comparison to other investments with similar risk. * Strategic Management Process- full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns * The competitive landscape:

* Hyper-competition: assumptions of market stability are replaced by notions of inherent instability because of the emergence of a global economy and rapid technological change * The global economy: goods, services, people, skills, and ideals moving freely across geographic borders * Globalization- increasing economic interdependence among countries and their organizations as reflected in the flow of goods and services, financial capital, and knowledge across country borders. * Only companies capable of meeting global standards typically have the capability to earn above-average returns. * Technology and technological changes

* Perpetual innovation- how rapidly and consistently new information-intensive technologies replace older ones. * Competitive premiums are placed on being able to quickly introduce new, innovative goods and services into the marketplace. * Disruptive technologies: destroy the value of existing technologies and create new markets. * Effective and efficient access and use of information has become a sources of competitive advantage in all industries (knowledge is power) * Knowledge: information, intelligence, expertise – probability of strategic competitiveness is enhanced for firms that have the ability to capture intelligence, transform it into usable knowledge, and diffuse it rapidly through the company. * Strategic flexibility involves coping with uncertainty and its accompanying risks * Continuous learning provides firms with new and up-to-date sets of skills allowing it to adapt to its environment as it encounters changes. * Industrial organization model of above-average returns: the external environment’s dominant influence on a firm’s strategic actions. * 1. Study the external environment especially the industry environment * 2. Locate an industry with high potential for above average returns * 3. Identify the strategy called for by the attractive industry * 4. Develop or acquire unique assets/skills needed to implement strategy * 5. Use the firm’s developed/acquired assets/skills to implement strategy * (deciding factors): Properties- economies of scale, barriers to market entry, diversification, product differentiation, and degree of concentration of firms in the industry * Underlying assumptions

* 1. External environment imposes pressures and constraints that determine strategies * 2. Firms control similar strategically relevant resources and pursue similar strategies as a result...
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