Strategic Management & Strategic

Competitiveness
Strategic Competitiveness is achieved when a firm
has developed and learned how to implement a
value-creating strategy.

Strategy is an integrated and coordinated set of

commitments and actions designed in exploit core
competencies and gain a competitive advantages.

A firm has competitive advantage when it

implements a strategy that creates superior value
for customers and that its competitors are unable
to duplicate or find too costly to imitate.
Above-average returns are returns in excess of
what an investor expects to earn from other
investments with a similar amount or risk.

Risk is an investor’s uncertainty about the economic

gains or losses that will result from a particular
investment.

Average Returns are returns equal to those an

investor expects to earn from other investments
with a similar amount of risk.
Strategic Management Process is the full set of
commitments , decisions, and actions required
for a firm to achieve strategic competitiveness
and earn above-average returns.
 Why is Strategic Management Process Important?

• Acting as the reference for any major decisions of the organization.

• Guiding the business to chart its future and move in that direction. SMP
involves formulating the organization’s goals, fixing realistic and achievable
objectives, and ensuring that they are all aligned with the company’s vision.
• Assisting the business to become proactive, not reactive. With the SMP, the
business can analyze the competitor’s actions vis-à-vis market trends and
come up with the steps that must be taken to compete and succeed in the
market.
• Preparing the organization for any potential challenges and explore possible
opportunities that the business must pioneer in. The strategic management
process steps also involve identifying the best ways to overcome the
challenges and exploiting new opportunities.
• Ensuring that the organizations copes with the competition in a dynamic
environment and survives in an uncertain market.
• Helping in the identification and maximization of the organization’s
competitive advantages and core competencies. These are responsible for
the business’ survival and future growth.
 Steps of Strategic Management Process
Goal setting
Analysis
Strategy Formulation
Strategy Implementation
Evaluation and Control
Competitive Landscape-refers to the list of
options a customer could choose rather than
your product. The list includes your competitors’
products and other types of customer solutions.
A customer might also choose to purchase a
product.
Hypercompetition describes competition that is
excessive such that it creates inherent instability
and necessitates constant disruptive change gpr
firms in the competitive landscape.
• The emergence of a global economy and
technology specifically rapid technological
change are the two primary drivers of
hypercompetitive environment and the
nature of today’s competitive landscape.
 Strategies for Competing in a Hypercompetitive Market
Competing in a hypercompetitive market can be challenging, but there are many strategies you
can use to give yourself an edge. Here are some suggestions:
Differentiation
• One of the most effective strategies to help you stand out is to differentiate your product
from competitors. You can differentiate your offering by offering better quality, more
features, better customer service, or unique benefits.
Focus on a Niche
• Rather than competing in the entire market, focus on a specific niche where you can excel.
You can become the go-to provider for a particular customer or need by doing so.
Agile Approach
• In a hypercompetitive market, you must quickly adapt to changes in customer preferences,
industry trends, and competitive offerings. An agile approach emphasizing quick decision-
making and flexibility will assist you in staying one step ahead of the competition.
Customer Experience
• An exceptional customer experience can help you build customer loyalty and stand out in a
crowded market. This includes everything from personalized service to convenient payment
options and fast delivery.
Collaboration
• In some cases, collaborating with other companies in the market can help you gain a
competitive advantage. By partnering with other companies, you can combine resources and
expertise to create new products or services that are more competitive.
• Competing in a hypercompetitive market requires creativity, flexibility, and agility. By focusing
on differentiation, niche marketing, customer experience, and collaboration, you can position
your business for success.
A global economy is one in which goods,
services, people, skills, and ideas move freely
across geographic borders.
Globalization is the increasing economic
interdependence among countries and their
organizations as reflected in the flow of goods
and services, financial capital, and knowledge
across country borders.
-is a product of a large number of firms
competing against
-increases the range of opportunities for
companies compering in the current competitive
landscape.
Technology Diffusion and Disruptive Technologies
The rate of technology diffusion which is the
speed at which new technologies become
available and are used, has increased substantially
over the past 20 years.
Perpetual innovation is a term used to describe
how rapidly and consistently new information-
intensive technologies replace older ones.
Disruptive technologies- technologies that destroy
the values of an existing technology and create
new markets.
I/O Model of Above Average Returns

Study the external

environment especially
the industry
environment.

Locate an industry with

high potentital for
above-average returns.

Identify the strategy

called for by the
attractive industry to
earn above average
returns.

Develop or acquire
assets and skills needed
to implement the
strategy.

Use the firm’s

strengths(its developed
or acquired assets and
ability to implement
the strategy.
Resource-Based Model of Above-Average Returns

Resources-inputs into a firms production

process.

Capability-capacity of an integrated set

of resources to integratively perform a
task or activity.

Competitive Advantage-ability of a firm

to outperform its rivals.
An Attractive Industry-an industry with
opportunities that can be exploited by
the firms resources and capabilities.

Strategy Formulation and

Implementation-Strategic actions taken
to earn above-average returns.

Superior Returns-earning of above-

average returns.
Vision is a picture of what the firm wants to
be and, in board terms, what it wants to
ultimately achieve.
A mission specifies the businesses in which
the firm intends to compete and the customers
it intends to serve.
Every organization involves a system of primary
stakeholder groups with whom it establishes
and manages relationships.
Stakeholders are the individuals, groups, and
organizations that can affect the firm’s vision
and mission, are affected by the strategic
outcomes achieved, and have enforceable
claims on the firm’s performance.
 Classification of
Stakeholders
o Stakeholders-people who are affected by
the firm’s performance and who have
claims on its performance.
o Capital Market Stakeholders
Shareholders
Major suppliers of capital
o Product Market Stakeholders
Primary Customers
Suppliers
Host Communities
Unions
o Organizational Stakeholders
Employees
Managers
Nonmanagerss
Strategic Leaders are people located indifferent
areas and levels of the firm using the strategic
management process to select strategic actions
that help the firm achieve its vision and fulfill its
mission.
Organizational culture refers to the complex set
of ideologies, symbols, and core values that are
shared throughout the firm and that influence
how the firm conducts business.