Average Process
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Strategy
Set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors.
Competitive advantage
Superior performance relative to other competitors in the same industry or the industry average.
Sustainable advantage
Outperforming competitors or the industry average over a prolonged period of time.
Competitive disadvantage
Underperformance relative to other competitors in the same industry or the industry average.
Competitive parity
Performance of two or more firms at the same level.
Strategic positioning
Managers stake out a unique position within an industry that allows the firm to provide value to customers, while controlling costs.
The greater the difference between value creation and cost, the greater the firm’s economic contribution and the more likely it will gain competitive advantage.
Stakeholders
Any individual or group that has an interest in any decision or activity of a firm.
Internal stakeholders (list them)
- empoyees
- stockholders
- board members
External stakeholders (list them)
- customers
- suppliers
- alliance partners
- creditors
- unions
- communities
- governments
- media
Stakeholder strategy
Integrative approach to managing a diverse set of stakeholders effectively in order to gain and sustain competitive advantage.
Five steps of the stakeholders analysis
- identify stakeholders
- identify stakeholders' interets
- identify opportunities and threats
- identify social responsabilities
- address stakeholder concerns
Analysis, Formulation, Implementation (AFI) strategy framework
Model that links three interdependent strategic management tasks–analyze, formulate, and implement–that, together, help managers plan and implement a strategy that can improve performance and result in competitive advantage.
The three stages are interdependent.
Steps and relative questions of the Analysis stage in the AFI strategy framework
Strategic Leadership and the Strategy Process.
What roles do strategic leaders play, and how do they help shape a firm’s vision, mission, and values?
How does strategy come about, and what process for creating strategy should strategic leaders put in place?
External Analysis.
What effects do forces in the external environment have on the firm’s potential to gain and sustain a competitive advantage?
How should the firm deal with them?
Internal Analysis.
What effects do internal resources, capabilities, and core competencies have on the firm’s potential to gain and sustain a competitive advantage?
How should the firm leverage them for competitive advantage?
Competitive Advantage, Firm Performance; and Business Models.
How does the firm make money?
How can one assess and measure competitive advantage?
What is the relationship between competitive advantage and firm performance?
Steps and relative questions of the Formulation stage in the AFI strategy framework
Business Strategy.
How should the firm compete: cost leadership, differentiation, or value innovation?
Corporate Strategy.
Where should the firm compete: industry, markets, and geography?
Global Strategy
How and where should the firm compete: local, regional, national, or international?
Stepts and relative questions of the Implementation stage in the AFI strategy framework
Organizational Design.
How should the firm organize to turn the formulated strategy into action?
Corporate Governance and Business Ethics.
What type of corporate governance is most effective?
How does the firm anchor strategic decisions in business ethics?