Advantages and Disadvantages

Topic 2TheContext ofManagingStrategically Recap Importance ofstrategic management? Strategic management model?Types ofstrategies? Advantages anddisadvantages ofstrategic management? LearningOutcomes Describetheconceptofcompetitiveadvantageandwhy itisimportanttomodernorganisations. Describethedifferentperspectivesofcompetitive advantage. ExplaintheDrivingForces,Implications,andCritical SuccessFactorsoftheBusinessEnvironment Explainwhostakeholdersareandwhytheyare importanttomanagingstrategically. StrategicManagementModelCompetitiveAdvantageCompetitive Advantage Sustainable Sustainable Unable toduplicate/imitate Unable toduplicate/imitate Creation ofValue Creation ofValue ClassActivityIngroups,discussthecompetitive advantagesofanyfivecompanies.Spend10 minutesonthis.Discussyourfindingsasa class.Perspectives ofCompetitive Advantage External External Internal Internal DynamicDynamicPerspectives ofCompetitive Advantage I/OView Analyseexternal environment Analysehow thecompetitive environment influencescompetitive advantage offirmsIgnores thecharacteristics ofindividualcompanies External Perspectives ofCompetitive Advantage Resource BasedView (RBV) Firmresources essential tocompetitiveness Match resources andopportunitiesoffered bytheindustry Howthismatch isdonedetermines effectiveness andcompetitive advantage Internal Resource BasedView ŁCash, reserves, debt, equity, earningsFinancialFinancialŁEquipment, buildings,facilities, raw materials Physical Physical ŁKnowledge, skills, experience, competencies HumanHumanŁBrand names,reputation, trademarks, patents Intangible Intangible ŁOrganisationalhistory, culture, work systems, policies, trust, relationships, formal organisationalstructure Structural/Cultural Structural/Cultural What Makes Resources Important? Value Rare Hard toImitate/Substitute Perspectives ofCompetitive Advantage DynamicResource BasedView (RBV) Markets dynamicandrapidly changingCurrent market positionnotanaccurate prediction offuture performance Past cluesandfuture trends aidprediction offuture landscape BusinessEnvironment Dynamic, ever changingenvironment Even notfor profit organisationsfeel impact Challenge istogain accesstoresources: labor, technology, funding BusinessEnvironment Drivers Critical drivingforces inthenewbusinessenvironment Critical drivingforces inthenewbusinessenvironment Theinformation revolution Theinformation revolution Technology Technology GlobalisationGlobalisationBusinessEnvironment Drivers: Information Revolution BusinessEnvironment Drivers: Technology BusinessEnvironment Drivers: Globalisation ClassActivityVideoonpopulationgrowthbyProf.HansRosling http://www.ted.com/talks/hans_rosling_on_global _population_growth.html Howdoestheinformationsharedinthisvideo impactonmodernorganisations?Suggest5points. BusinessEnvironment Drivers: Implications Continual Change Continual Change Reduced Needfor Physical Assets Reduced Needfor Physical Assets Vanishing Distance &Compressed TimeVanishing Distance &Compressed TimeIncreased Vulnerability Increased Vulnerability Critical SuccessFactors Abilitytoembrace change Abilitytoembrace change Creativity andinnovation capabilitiesCreativity andinnovation capabilitiesBeingaworld classorganisation Beingaworld classorganisation Stakeholders Stakeholders Stakeholders Shareholders Shareholders Employees Employees Customers Customers Suppliers Suppliers Government Government Communities Communities VisionStatements Answers thequestion: fiWhat dowewant tobecome?fl Answers thequestion: fiWhat dowewant tobecome?fl Shouldbeshort,preferably onesentence, Shouldbeshort,preferably onesentence, Involve managers inthedevelopment process Involve managers inthedevelopment process MissionStatements A declaration of an organisation™s fireason for beingflAnswers the pivotal question, fiWhat is our business?flEssential for effectively establishing objectives and formulating strategiesReveals what an organisationwants to be and whom it wants to serve Importance ofVision&MissionStatements UnanimityofpurposeUnanimityofpurposeBasisoforganisational resource allocation Basisoforganisational resource allocation Establish general tone Establish general tone Organisation™s purposeanddirection Organisation™s purposeanddirection Translation ofobjectives into awork structure Translation ofobjectives into awork structure Specify organisational purposesSpecify organisational purposesSummary Describetheconceptofcompetitiveadvantageandwhy itisimportanttomodernorganisations. Describethedifferentperspectivesofcompetitive advantage. ExplaintheDrivingForces,Implications,andCritical SuccessFactorsoftheBusinessEnvironment Explainwhostakeholdersareandwhytheyare importanttomanagingstrategically. CaseStudyGroup DiscussionCase StudyGroup DiscussionAssignment Prep Assignment Prep: Report Structure4.CompetitiveAdvantage Provideadefinitionanddescriptionofacompetitive advantage Discussthekeyadvantagesofdevelopingand maintainingacompetitiveadvantagewithinthe chosenorganization Discussthekeychallengesofdevelopingand maintainingacompetitiveadvantagewithinthe chosenorganization Discusstheperspectiveofcompetitiveadvantageto beusedwithinthechosenorganisation EndofSession