Strategic Management

Strategy: high level plan to achieve one or more goals under conditions of uncertainity.

Tactics: plans, tasks, or procedures that can be carried out, may be part of a larger strategy.

1950: financial planning

1960: Long ange planning, for growth and resource allocation

1970: Strategic planning, response to markets, alternative strategies

1980: Strategic Management strategic porcesses, competititve positioning

1990: Quest for strategic advantage, capabilities, resources

2000: New economy, business models, disruptive techonologies

2010: corporate social responsibility, business ethics, global strategies, sustainability / green strategies, competing for standards

Competitive strategy is concerned with creating and maintaining a competititve advantage in each and every area of business.

1. Competititve disadvantage (value-destroying strategy)
2. Competitive parity (firm and its competitiros are implemeting the same value-creating strategies)
3. Temporary advantage (firm is alone implementing a value crating strategy, but competitiros might prepare for imitation
4. Sustainable competitive advantage (firm is alone implementing a value crating strategy and competitors are unable to duplicate the benefits of this strategy)

1. Size differences and ecnomies of scale
2. Experience differences, learning-economie
3. Differential low-cost access to factors of production (Bargaining power)
4. Technological advantage independent of scale
5. Policy choices (within the firm)

1. Product features
2. Linkages between functions and complexity
3. Time (first mover
4. Location and presence
5. Product mix, mix with services
6. Links with other firms
7. Reputation

Model to understand relationship between a firm's environment, firm's behavior, firm's performance.

• Indsutry Structure: Industry structure (No. of buyers/sellers, product differentiation, barriers to entry, cost structures, vertical integration.
• Firm Conduct: Pricing behavior, product strategy, advertisting, R&D, investments
• Performance: performance of the ecnomoy as a whole and the firm, level of employment and progress.

• Industry competitiors
• potential of new entrants
• substitutes
• bargaining power of suppliers
• bargaining power of buyers

Limits: stable conditions, static perspective, no collaboration, only competition, non-market forces such as government policy are not taking into account