This summary includes the most important topics from chapters 1, 2, 3, 4, 5, 7, 8, 9, and 10 of the book. It helped me understand the lectures better and gain insight into Grant's views. I managed to pass the course with ease by following the lectures, attending tutorials, and reading this summary ...
,Table of contents
1 THE CONCEPT OF THEORY ..........................................................................................................3
1.1 FROM STRATEGY AS PLAN TO STRATEGY AS DIRECTION. ................................................................3
1.2 AREAS OF FIRM STRATEGY ............................................................................................................3
1.3 HOW IS STRATEGY MADE? .............................................................................................................4
1.4 APPLYING STRATEGY ANALYSIS .....................................................................................................4
1.5 STRATEGIC MANAGEMENT OF NOT-FOR-PROFIT ORGANIZATIONS..................................................5
2 GOALS, VALUES AND PERFORMANCE ......................................................................................5
2.1 APPRAISING CURRENT AND PAST PERFORMANCE ...........................................................................7
2.2 PERFORMANCE DIAGNOSIS ............................................................................................................7
3 INDUSTRY ANALYSIS: THE FUNDAMENTALS .........................................................................8
3.1 FROM ENVIRONMENTAL ANALYSIS TO INDUSTRY ANALYSIS ...........................................................8
3.2 INDUSTRY ATTRACTIVENESS..........................................................................................................8
3.3 PORTER .........................................................................................................................................9
3.3.1 Substitutes ................................................................................................................................9
3.3.2 Potential entrants / threat of entry ...........................................................................................9
3.3.3 Industry competitors/rivalry .................................................................................................. 10
3.3.4 Bargain power of buyers ....................................................................................................... 10
3.3.5 Bargain power of suppliers ................................................................................................... 10
3.4 APPLYING INDUSTRY ANALYSIS TO FORECASTING INDUSTRY PROFITABILITY ............................... 10
4 FURTHER TOPICS IN INDUSTRY AND COMPETITIVE ANALYSIS .................................... 12
4.1 EXTENDING PORTERS FRAMEWORK: ............................................................................................ 12
4.2 COMPETITOR ANALYSIS ............................................................................................................... 13
4.3 SEGMENTATION OF STRATEGIC GROUPS ....................................................................................... 14
5 ANALYZING RESOURCES AND CAPABILITIES ..................................................................... 15
5.1 APPRAISING RESOURCES AND CAPABILITIES ................................................................................ 16
5.2 HOW DO WE EXPLOIT KEY STRENGTHS EFFECTIVELY? ................................................................. 17
6 - ............................................................................................................................................................ 18
7 THE SOURCES AND DIMENSIONS OF COMPETITIVE ADVANTAGE ................................ 18
7.1 INTERNAL SOURCES OF COMPETITIVE ADVANTAGE: STRATEGIC INNOVATION THROUGH BUSINESS
MODELS AND BLUE OCEAN ....................................................................................................................................... 18
7.2 SUSTAINING COMPETITIVE ADVANTAGE....................................................................................... 19
7.3 COST ADVANTAGE ....................................................................................................................... 20
7.4 DIFFERENTIATION ADVANTAGE ................................................................................................... 21
7.5 CAN FIRMS PURSUE BOTH COST AND DIFFERENTIATION ADVANTAGE? ......................................... 24
8 INDUSTRY EVOLUTION AND STRATEGIC CHANGE ............................................................ 25
8.1 INDUSTRY LIFE CYCLE PHASES: ................................................................................................... 25
8.2 KEY SUCCESS FACTORS AND INDUSTRY EVOLUTION .................................................................. 27
8.3 BARRIERS TO CHANGE:................................................................................................................ 27
8.4 ORGANIZATIONAL ADAPTION AND INDUSTRY EVOLUTION: .......................................................... 28
8.5 COPING WITH TECHNICAL CHANGE .............................................................................................. 28
8.6 COMBATTING ORGANIZATIONAL INERTIA (RESISTANCE TO CHANGE IN THE FIRM) ....................... 29
8.7 DEVELOPING NEW CAPABILITIES ................................................................................................. 29
8.8 USING KNOWLEDGE MANAGEMENT TO DEVELOP ORGANIZATIONAL CAPABILITY. ....................... 29
9 TECHNOLOGY-BASED INDUSTRIES AND THE MANAGEMENT AND INNOVATION. .. 31
9.1 THE INNOVATION PROCESS .......................................................................................................... 31
1
, 9.2 CAPTURING VALUE FROM INNOVATION ........................................................................................ 31
9.2.1 Property rights in innovation (intellectual property): ........................................................... 31
9.2.2 Tacitness and complexity of the technology ........................................................................... 32
9.2.3 Lead time ............................................................................................................................... 32
9.2.4 Complementary resources ..................................................................................................... 32
9.3 OTHER STRATEGIES TO EXPLOIT INNOVATION .............................................................................. 33
9.4 FIRST-MOVER ADVANTAGE (FOLLOWER OR LEADER?) ................................................................. 33
9.5 STANDARD, PLATFORMS, NETWORK EXTRANALITIES................................................................... 34
9.6 IMPLEMENTING TECHNOLOGY STRATEGIES ................................................................................. 35
9.7 ALIGNING INNOVATION WITH BUSINESS STRATEGY...................................................................... 35
10 VERTICAL INTEGRATION AND THE SCOPE OF THE FIRM ............................................... 36
10.1 TRANSACTION COST AND THE SCOPE OF THE FIRM ...................................................................... 36
10.2 IS IT BETTER TO BE VERTICALLY INTEGRATED OR VERTICALLY SPECIALIZED? .............................. 37
10.3 DECIDING WHETHER TO MAKE OR BUY. ....................................................................................... 38
10.4 DIFFERENT TYPES OF VERTICAL RELATIONSHIPS ........................................................................ 39
10.5 RECENT TRENDS ......................................................................................................................... 39
2
, 1 The concept of theory
Successful strategy:
1. Goals that are consistent and long-term.
2. Profound understanding of the competitive environment.
3. Objective appraisal of resources
4. Effective implementation of all 3 above
Strategy as link between environment:
The link between firm and industry environment is strategy.
The firm The industry environment
- Goals and values - Competitors
- Resources and capabilities - Customers
- Structure and system - suppliers
Strategy fit = effective strategy is when decision and action align to create consistent strategic direction.
Contingency theory:
- no best way of organizing or managing.
- the best way depends on circumstances (characteristics of organizations environment.)
Strategy = The means by which individuals or organizations achieve their objectives.
➢ Setting goals.
1.1 From strategy as plan to strategy as direction.
why do firms need Strategy?
1. strategy as decision support.
- Simplifies decision making.
- Knowledge of different individuals can be bundled and integrated.
- facilitates use of analytic tools.
2. Strategy as a coordinating device
3. Strategy as Target (direction for development)
- Strategic intent = desired strategic position
- vision & mission.
Strategy is realized as action, it is observable.
1.2 Areas of firm strategy
Corporate Strategy > defines the scope of the firm in terms of the industries and market in which it
competes.
1. Where to compete. (for profitability)
Business Strategy > How a firm competes within a particular industry OR market. (competitive Strategy
(competitive advantage))
2. How to compete. (for profitability)
3
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