Summary Strategic Management and Competitive Advantage - 6e editie - Jay Barney
8 views 0 purchase
Course
Strategic management
Institution
Strategic Management
Book
Strategic Management and Competitive Advantage
Samenvatting (in Engels) van het boek Strategic Management and Competitive Advantage, zesde editie, Jay Barney. Deze samenvatting bevat precies genoeg om alle theorie en concepten te beschrijven. Belangrijke modellen zijn opgenomen. Deze samenvatting bevat geen nutteloze voorbeelden of teveel infor...
Summary Strategic Management and Competitive Advantage: Concepts and Cases, Global Edition - Geïntegreerde Bedrijfseconomie (300429-B-6)
Samenvatting boek Geïntegreerde Bedrijfseconomie
Strategic Management and Competitive Advantage: Summary
All for this textbook (16)
Written for
Strategic management
All documents for this subject (331)
Seller
Follow
jellegolbach
Content preview
Strategic management
Part 1: the tools of strategic analysis
Chapter 1: What Is Strategy and the Strategic Management Process?
Strategy = how to gain competitive advantage
→ but how competition emerges and develops is unsure → so strategy is a firm’s
best bet about how competition is going to evolve and how that evolution can be
exploited for competitive advantage.
Strategic management process = a sequential set of analyses and choices that
can increase the likelihood that a firm will choose a good strategy
Mission = why do we exist = long-time purpose = what it wants to be in the long-run
and what it wants to avoid in the meantime = broad statements of its purpose and
values
Objectives = specific measurable targets a firm can use to evaluate the extent to
which it is realizing its mission
External analysis = identifying critical threats and opportunities in the competitive
environment, examines evolvement of competition and its implications
Internal analysis = identifies its organizational strengths and weaknesses, helps to
understand which resources and capabilities are likely to be sources of competitive
advantage and which are less likely. Also used to identify areas that require
improvement or change.
Strategic choices:
- Business-level strategies: actions to gain competitive advantages in a
single market or industry (cost leadership, product differentiation, flexibility
and real options, collusion)
- Corporate-level strategies: to gain competitive advantages by operating in
multiple markets or industries simultaneously (vertical integration,
diversification, strategic alliances + merger and acquisition etc.)
➔ Choose a strategy that: (1) supports the firm’s mission; (2) is consistent with a
firm’s objectives; (3) exploits opportunities in a firm’s environment with a firm’s
strengths; and (4) neutralizes threats in a firm’s environment while avoiding a
firm’s weaknesses
,Implement strategy: adopt organizational policies and practices that are consistent
with its strategy → (1) a firm’s formal organizational structure; (2) its formal and
informal management control systems; and (3) its employee compensation policies
Competitive advantage = create more economic value than rival firms → economic
value = difference between what customer is willing to pay and cost of producing
→ can be assessed by accounting performance or economic performance
→ competitive parity = same economic value as rivals → due to imitation
Revised strategic management process framework:
Assessing competitive advantage:
- Accounting measures
o Profit and loss + balance sheet
o Ratios (ROA, ROE, gross profit margin, liquidity and solvability ratios)
→ should be benchmarked against other firms or against standards
(financial numbers of last year)
o = easy to compute → information is publicly available
o Limitation: doesn’t take into account Cost of Capital (return promised to
suppliers of invested capital)
- Economic measures
o Compares a firm’s level of return to its cost of capital
o Cost of debt and cost of equity, also WACC
, Chapter 2: evaluating a firm’s external environment
General environment = broad trends in context within which a firm operates that
have impact on a firm’s strategic choices
Understanding this general environment can help a firm identify some of the threats
and opportunities it faces
Society is better off with very competitive industries:
- Firms must strive for low cost, keep quality high and innovate to survive
➔ Results in S-C-P model → this model analyzes threats and opportunities in
the competitive environment
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller jellegolbach. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.62. You're not tied to anything after your purchase.
