Chapter 1- Introduction to Strategic Management
Overview
Strategy: set of related actions that managers take to increase their company’s performance
-for most, if not all companies, achieving superior performance relative to rivals is the ultimate challenge
-if a company’s strategies result in superior performance, it is said to have a competitive advantage
-Ex: Dell’s strategies produced superior performance from mid-1990s until mid-2000s, as a result, Dell enjoyed competitive advantage over its rivals
-How did they achieve competitive advantage?
-due to successful pursuit of varying strategies: Direct selling, customization and efficient supply chain mgmt.
-enabled company to lower cost structure, charge low prices, gain market share, and become more profitable than its rivals
-Dell lost competitive advantage in later half of 2000s HP offered bundled products, needed to find ways to sell to intermediaries & Apple differentiation
-first step toward achieving objective is to describe in more detail what superior performance/competitive adv mean and to explain pivotal role that managers play in leading strategy-making process
Strategic Leadership: creating competitive adv through effective mgmt. of the strategy-making process
-strat-making process is the process by which managers select/implement a set of strategies that ain to achieve a competitive adv
Strategy Formulation: selecting strategies based on analysis of an org’s external/internal environment
Strategy Implementation: putting strategies into action includes designing, delivering, and supporting products; improving efficiency of ops; designing company’s org structure/control systems
Strategic Leadership, Competitive Advantage, and Superior Performance
-strategic leadership is concerned with managing the strategy-making process to increase performance of a company, thereby