Strategic Management Overview

Decisions that improve a firm's competitiveness and performance. This includes choices about future direction, values, environmental analysis, internal analysis, competitive strategies, strategic development methods, internationalization, evaluation, and implementation.

A field that emerged in the 1960s, focusing on how companies can improve their performance and competitiveness. It combines insights from economics, industrial organization, organizational theory, and behavioral sciences.

A model that incorporates perspectives from academics, businesses, and consultants, leading to a balanced approach to strategic management.

The external factors that affect a company's performance, such as industry trends, competition, and regulations.

A company's plan to achieve its goals and gain a competitive advantage. It outlines core values, competitive strategies, and implementation methods.

The outcome of a company's strategic decisions, measured by its financial performance, market share, and customer satisfaction.

Individuals or groups who have a stake in a company's success, such as investors, employees, customers, and suppliers.

The process of analyzing a company's strengths and weaknesses and its external opportunities and threats.

The ability of established businesses in an industry to react aggressively to new entrants, discouraging them from entering the market.

Factors that make it difficult for new businesses to enter a market. These barriers can be related to cost advantages, differentiation, regulations, or access to resources.

Products from different industries that fulfill the same customer needs, posing a threat to an existing industry by offering an alternative solution.

These advantages help existing firms defend their market share against newcomers. They include factors like cost efficiency, strong brands, and loyal customers.

The extent to which an industry can benefit from its size and reach. It can create cost advantages and discourage new competitors due to the high investment required to reach similar scale.

The group of companies that provide similar services to the same customer base, regardless of their industry.

The set of rivals that a company directly faces, including organizations from the same industry and those offering similar functionalities to the same customers.

The companies within the same industry offering very similar services to the same customer groups. Easy to identify rivals.

Companies from different industries that compete for the same customer groups by offering similar functionalities. More difficult to identify rivals.

A situation where companies within an industry target different customer segments or offer distinct services.

The actual industry a company operates in is less important for strategic analysis than understanding its competition.

The process of carefully defining and identifying actual competitors for a company, taking both industry and customer focus into account.

The competitive environment analysis requires managers to use both available data and their own judgment to define competitors accurately.

Individuals or groups who have an interest in a company's activities and can influence or be affected by its decisions.

A framework where a company's objectives are established through negotiation and compromise among various stakeholders, each pursuing their own interests.

The idea that a company's primary goal should be to maximize the wealth of its shareholders.

Factors that limit the effectiveness of the shareholder wealth maximization principle, such as the presence of diverse stakeholders with their own goals.

A clash of interests between different stakeholder groups, resulting from limited resources and conflicting objectives.

The process of assessing and prioritizing stakeholder relationships based on their influence and importance to the company's success.

The process of influencing stakeholders to support the company's goals and objectives.

The tendency of the most powerful stakeholder group to exert significant influence on the company's decisions, potentially limiting the interests of other stakeholders.

Activities that add value to a product or service, categorized as primary activities that directly involve the creation and delivery of the product, and secondary activities that support the primary activities.

These activities directly involve the creation and delivery of a product or service, including inbound logistics, operations, outbound logistics, marketing, and after-sales service.

These activities support the primary activities, enabling a company to operate efficiently and effectively. They include technology development, human resource management, procurement, and firm infrastructure.

Relationships between different value chain activities within a company, categorized as horizontal (within internal activities) and vertical (with customers or suppliers), designed to optimize and coordinate activities for increased efficiency and effectiveness.

The collection of unique resources and capabilities that contribute to a company's competitive advantage. Resources can be tangible or intangible, while capabilities are the skills and processes a company uses to make use of its resources for competitive edge.

Changes in an industry caused by external factors like new technologies or government regulations. These affect all companies within the industry, and they are out of an individual company's control.

Changes in an industry spurred by actions of companies themselves, such as developing new products, marketing campaigns, or partnerships.

Industries where changes happen rapidly and intensely, with competitors constantly shifting strategies and adapting.

A process that divides an industry into smaller groups based on consumer needs, product features, or other factors.

Groups of companies within an industry that share similar strategic approaches, like targeting a specific customer base or using a particular pricing model.

A visual tool used to show how different strategic groups within an industry compare based on two key factors.

Understanding the dynamics of strategic groups helps companies identify their most direct rivals, those competing in the same way within the same market.

The analysis of strategic groups can provide a more focused and accurate view of competition than analyzing the entire industry.