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Terms in this set (66)
A process of maintaining a dynamic fit between the firms external environment and internal resources and capabilities for a competitive advantage that is sustainable.
Is an integrated and coordinated set of commitments and actions to exploit core competencies and gain a competitive advantage.
- The strategy indicates what a firm will and won't do.
- The strategy demonstrates how the firm differs from its competitiors.
Resources are the inputs into the firm's production process.
- Tangible resources: organizational, technological, financial and physical resources.
- Intangible resources: resources that are deeplg imbedded in history, accumulated over time and significantly hard to understand or imitate; human, innovation and reputational resources.
Set of resources performing an activity or task in an integrated manner.
- Functional expertise is foundation for many capabilities:
the unique skills and knowledge of employees.
- Integrate the individuals functional expertise to create organizational knowledge.
- Bundling unique resources.
1. Valuable capabilities: are capabilities that exploit the opportunities and neutralize threats of the external environment.
2. Rare capabilities.
3. Non-susbstitutable capabilities
4. Costly-to-imitate capabilites:
- Historical: unique organizational culture and brand name.
- Ambiguity causes: the causes and uses of core competencies are unclear.
- Social complexity: interpersonal relationships, trust and friendship between employees, managers, competitiors, suppliers and customers.
The implementation of a strategy, competitiors are unable to duplicate or find too costly to imitate.
- A competitive advantage isn't permanent.
- value: superior to that provided by competitors or to create a value-creating activity that a competitor cannot perform.
A firm successfully formulation and implementation of a value-creating strategy.
Sustainability of competitive advantage
- The rate at which competencies become obsolence because of environmental changes.
- The availability of substitutes of core competencies.
- The imitability of core competencies
challenge: effectively manage curent cc and develop new cc
Returns in excesss of what an investor expects to earn form other investments with similar risk or for small businesses: growth and speed.
- Presence of competitive advantage is required.
- Foundation to satisfy its stakeholders.
An investor's uncertainty about its economic gains or losses that result from a particular investment.
Are returns equal to the returns an investor expect to earn from other investments with similar risks.
- Inability to earn average return = failure: investors withdraw their investments from firms with below-average returns.
Strategic management process
Full set of commitments, decisions and actions required for a firm to achieve strategic competitiveness (value-creating strategy) and above-average returns; only result when the core competencies (internal organization) are matched with opportunities (external environment)
Difficulties Mangerial decisions
1. Uncertainty: in characteristics external environment, competitors actions and customer preferences.
2. Complexity: in causes shaping environment
3. Intra-organizational conflicts
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