Elements of Strategic Management

These are the terms we should know in Strategic Management

Competitive Advantage

"A firm is said to have competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential player'" (Barney-1991)

• access to natural resources
• access to highly trained and skilled personal human resources

This is an example of competitive advantage in the existence industry:

1.  Strong research and innovation- Apple, Sony
2. Brand Popularity- Coca Cola
3. Superior product/ customer support- IKEA
4. Low pricing- Air Asia
5. Speed and time- Domino's, FedEx

Resource-based View (RBV)
-a firm's internal resources are most important in getting and sustaining company's competitive advantage

Industrial/ Organizational View
-the industry which the firm choose to compete has a stronger influence on the firm's performance than the firm's internal resources such as management, marketing and finance
-external resources

Resources and Capability

Resources - inputs (eg:equipments, HR, processes, patents, finances) into firm's production process.

1. tangible- asset, equipment, etc.
2. intangible- reputations, culture, patents, copyright, knowledge
3. HR- skills, intelligence, competencies, experiences

Capability - the firm;s capacity to transform into outputs valued by the customer which generate profit for the firm

Characteristics of Resources as a Sorce of Competitive Advantage

V-R-I-O

1. valuable
2. rare
3. hard to imitate or substitute
4. organized to be exploit 

Vision Statement

- a statement about what an organization wants to become

- must align with the core values of stakeholders

- a powerful motivatot

Mission Statement

- defines the long-term vision of the organizations in terms of what it wants to be and whom it want to serve 

- it should be clear and concise in order to distinguish it from any other firm

- has to be back up with specific objectives and strategies

 

components

products/service, markets, technology, concern for survival, growth and profitability, philosophy, self-concept, concern for public image, concern for employee

Objectives

- a desired or specific result of a planned activity that should be achieved by a specific time.

- short, medium, long-term

- should be measureable

Specific, Measurable, Achievable/attainable, Realistic, Time phase. (SMART)

Strategy

- a strategic master plan states how the corporation will achieve its mission and objective.

- its maximize competitive advantage and minimize competitive disadvantage

- it is concern with integrating company activities and allocating resources so that the present objective can be met.

Level Of Strategy

Stakeholders
Corporation

1. Stockholders
2. Customers
3. Employees
4. Communities
5. Government