B Policies Midterm Study Sheet Article “Are you sure you have a strategy?”

B Policies Midterm Study Sheet Article “Are you sure you have a strategy?”

 Strategy: an integrated, overarching concept of how the business will achieve its objectives.

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 Mission: fundamental purpose and values

 Objectives: specific targets

 Supporting Organizational Arrangements: structure, process, symbols, rewards, people, etc.

 5 Major elements of strategy: o arenas: where will we be active? o Vehicles: how will we get there? o Differentiators: how will we win in the market place? o Staging: what will be our speed and sequence of moves? o Economic logic: how will be obtain our returns? Week 1 slides: Strategy

 Strategy: goal-directed actions to gain and sustain competitive advantage

 Competitive advantage: superior performance relative to competitors o Ex: google, duke basketball

 (V – C) to think about whether a firm has competitive advantage. Design the strategies to increase V or decrease C, or both

 Strategic Management Process: never ending cycle of analysis, formulation, implementation and feedback  Companies: o Ebay: alliances o Walmart: cost leadership o Nintendo Wii: innovation o Samsung: differentiations o Disney: resources o Drug Dealers: industry structure

 Macro-level Environment: substitutes, complements, buyers, new entrants, rivals, suppliers

 The Firm: finance, marketing, accounting, HR, operations

 Strategy is about: o Creating, capturing, sustaining competitive advantage o Analyzing business situations and forming strategic plans o Implementing strategy o Revising the strategy to ensure continuing fit

 Firm Strategy: o Goals and values o Resources and capabilities o Structure and systems
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 The Industry Environment: o Competitors o Customers o Suppliers

 2 types of strategy: External (I/O model) and Internal (resource-based model)

 NOT strategy: o o Operational effectiveness Week 2: External Analysis

 Environmental Determinants (Monopoly rents) of performance o Competitor o Industry structure (S-C-P, Porter’s 5 forces) o Macro-factors (PESTEL)

 PESTEL Framework o Political (govt pressures, subsidiaries and incentives, differences in countries, states) o Economic (growth rates, interest rates, employment levels, currency exchange) o Sociocultural (norms, culture, values, demographics, lifestyle changes) o Technological o Environmental (global warming, sustainability, pollution) o Legal (court system, legislation, hiring laws)

 5 Forces: o Suppliers of Key Inputs

 Threat is stronger when: item is crucial to production process, costly to switch suppliers, good reputations and growing demand, supply a