Chapter 1 - Strategic management and strategic competitiveness. The contents of this chapter include all of the following: Nature of competition, I/O model of above-average returns (AAR), resource-based model of AAR strategic vision and mission, stakeholders, strategic leaders, the strategic management process, what is performance? | Chapter 1: Strategic Management and Strategic Competitiveness Overview: Nature of Competition I/O Model of Above-Average Returns (AAR) Resource-Based Model of AAR Strategic Vision and Mission Stakeholders Strategic Leaders The Strategic Management Process What is Performance? Nature of Competition: Basic concepts Strategy Integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage Competitive Advantage (CA) When a firm implements a strategy that competitors are unable to duplicate or find too costly to imitate Strategic Competitiveness Achieved when a firm successfully formulates & implements a value-creating strategy Above Average Returns Returns in excess of what investor expects in comparison to other investments with similar risk The Strategic Management Process Industrial Organizational (I/O) Model of Above-Average Returns (AAR) Underlying Assumptions External environment imposes . | Chapter 1: Strategic Management and Strategic Competitiveness Overview: Nature of Competition I/O Model of Above-Average Returns (AAR) Resource-Based Model of AAR Strategic Vision and Mission Stakeholders Strategic Leaders The Strategic Management Process What is Performance? Nature of Competition: Basic concepts Strategy Integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage Competitive Advantage (CA) When a firm implements a strategy that competitors are unable to duplicate or find too costly to imitate Strategic Competitiveness Achieved when a firm successfully formulates & implements a value-creating strategy Above Average Returns Returns in excess of what investor expects in comparison to other investments with similar risk The Strategic Management Process Industrial Organizational (I/O) Model of Above-Average Returns (AAR) Underlying Assumptions External environment imposes pressures and constraints that determine the strategies resulting in AAR Most firms that compete within a particular industry control similar resources and pursue similar strategies Resources for implementing strategies are highly mobile across firms Organizational decision makers are rational and committed to acting in the firm's best interests, as shown by their profit-maximizing behaviors Limitations Only two strategies are suggested for competing in an industry: Cost Leadership or Differentiation Internal resources & capabilities are not considered AAR are earned when a firm implements the strategy dictated by external environment (general, industry, and competitor) Industrial Organizational (I/O) Model of Above-Average Returns (AAR) The Resource-Based Model of AAR Resources Inputs into a firm's production process Includes capital equipment, employee skills, patents, high-quality managers, financial condition, etc. Basis for competitive advantage: When resources are valuable,
