Questions and Answers
What is the integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage?
Strategic Management
What framework embodies the view of strategic management?
AFI
What is a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors?
Strategy
What are the three elements that constitute a 'good' strategy?
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What is a competitive advantage?
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What is the definition of Competitive Advantage?
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What contributes to firm performance?
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How to create value?
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What are the two types of stakeholders?
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What is superior performance relative to other competitors in the same industry or the industry average called?
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What does sustained competitive advantage mean?
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What is underperformance relative to other competitors in the same industry or the industry average called?
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What does competitive parity mean?
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What are the three important stakeholder attributes?
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What are the steps in a Stakeholder Impact Analysis?
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What are the key aspects of an effective vision?
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What defines a business in terms of providing solutions to customer needs?
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What are isolating mechanisms?
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What is the Resource Based View (RBV)?
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What are the critical assumptions of a Resource Based View?
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What is the VIRO Framework?
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What is the Strategic Management Process?
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Study Notes
Strategic Management
- Integrates analysis, formulation, and implementation to achieve competitive advantage.
- Framework represented by AFI: Analysis (market position), Formulation (strategic approach), Implementation (execution).
Strategy
- A series of goal-directed actions aiming for superior performance compared to competitors.
- Consists of unique value proposition, trade-offs, and coherent activities supporting value.
Competitive Advantage
- Achieved when a firm demonstrates superior performance compared to industry peers.
- Competitive advantage is relative, not absolute; measured against competitors or industry average.
Competitive Landscape
- Competitive Disadvantage: Underperformance in relation to rivals.
- Competitive Parity: Firms perform at similar levels.
- Sustainable Competitive Advantage: Success over a significant time frame.
Firm Performance
- Influenced by industry effects (market structure) and firm effects (managerial decisions).
Value Creation
- Formula: Revenue - Costs = Profits, which is essential for generating value.
Stakeholders
- Internal: Employees, managers, and shareholders.
- External: Customers, suppliers, and communities.
- Important stakeholder attributes include Power, Legitimacy, and Urgency.
Stakeholder Strategies
- Effective management through Stakeholder Impact Analysis.
- Steps involve identification of stakeholders, their interests, opportunities, threats, and social responsibilities.
Strategic Purpose
- Vision: Long-term objectives of the organization.
- Mission: Operational strategies outlining how to accomplish goals.
- Values: Principles guiding organizational conduct.
Strategic Management Process
- Elements include strategic planning, execution, and ongoing adjustments.
- Top-Down Planning: Rational approach focusing on historical data for future planning.
- Scenario Planning: Anticipating future scenarios to refine strategy.
Industry and Competitive Analysis
- PESTEL Model: External factors (Political, Economic, Sociocultural, Technological, Ecological, Legal) affecting a firm.
- Porter's Five Forces: Evaluates industry profit potential through competitive rivalry, supplier power, buyer power, threat of substitutes, and entry barriers.
Resource-Based View (RBV)
- Focuses on internal resources as fundamental to generating competitive advantage.
- Key Assumptions: Resource heterogeneity (firms possess diverse resources) and resource immobility (resources are not easily transferable).
Competitive Advantage Mechanisms
- VRIO Framework: Competitive advantage derives from resources that are Valuable, Rare, costly to Imitate, and Organized to capture value.
- Isolating Mechanisms: Safeguards that protect resources from imitation.
Dynamic Capabilities
- Firms must adapt and leverage their resources in changing environments to maintain competitive advantages.
Value Chain Analysis
- Breaks down internal activities into primary and support that add value.
- Primary activities directly transform inputs, while support activities enhance overall efficacy.
Comparative Frameworks
- I/O Model: Considers external industry factors leading to competitive strategy.
- RBV Model: Focuses on unique resources that foster sustained competitive edge.
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Description
Test your knowledge on strategic management concepts with these flashcards created for MANGT 595 Exam 1 at Kansas State University. Dive into key terms like 'strategic management' and the AFI framework, crucial for gaining competitive advantage in business. Perfect for students preparing for their exams.
