Hold relative position in high growth product/market area
Increasing market share in high growth market
Increasing market share in mature markets
Hold strong relative position in mature market, use 'excess' cash flow, funds to effect penetration with existing product line - multi-national market
Hold strong relative position in diversified product line domestically, and use 'excess' cash flow, funds capability and other resources to diversify markets.
Dependency reduction strategies:
Building 'positive image'
Contracting - To reduce uncertainties
Co-optation - To involve representatives of other origins into policy-making positions to achieve certainty of future
Coalitions - To achieve common goals like opposing a common enemy
Goodness of fit test:
Match to industry and competitive condition, opportunities and threat .
Tailored to company's strengths and weakness, competencies, and capabilities
Competitive advantage test: Leads to sustainable competitive advantage
Performance test: Boosts profitability and competitive strength and long term position
Strategic vs Operating Decisions
Strategic Decision: Clear Operating Decision: Effective
Clear strategy and effective operations have contributed to success in the past and will contribute to success in the future.
Strategic Decision: Unclear Operating Decision: Effective
Unclear strategy but effective operations have contributed to success in the past but success in the future is doubtful.
Strategic Decision: Clear Operating Decision: Ineffective
Clear strategy but ineffective operations have sometimes worked in the past in the short-run but increasing competition makes success doubtful in the future.
Strategic Decision: Unclear Operating Decision: Ineffective
Unclear strategy and ineffective operations have meant failure in the past and will be so in the future.
Strategic Management Process
The full set of commitments, decisions, and action, required for a firm to achieve strategic competitiveness and earn above-average returns.
Strategic Competitiveness: Achieved when a firm successfully formulates and implements a value-creating strategy.
Above-Average Returns: Occurs when a firm develops a strategy that competitors are not simultaneously implementing.
Provides benefits which current and potential competitors are unable to duplicate.
An investors uncertainty about the economic gains or losses that will result from a particular investment.
Returns that are equal to those an investor expects to earn from other investments with a similar amount of risk.
A set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment.
It involves coping with uncertainty and the accompanying risks.
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