CH 6 Strategic Management Lesson 1 The Importance of Strategy What is strategy? • What are the basic ques3ons of strategy? • What are the dynamics of strategy? • What are the results of strategy? • What is an effec3ve strategy? The Importance of Studying Strategy Basic Questions of Strategy: – Firm Level: Why are some firms more profitable than others, or What is the source of a firm’s competitive advantage? Can it be sustained? – Industry Level: Why are some industries more attractive (profitable) than others? (Porter’s 5-Forces Model addresses this question) – Corporate Strategy: How can I run a firm with several businesses so that I get synergy, that together they are worth more than the sum of the parts? The Dynamics of Strategic Planning •Strategy large-scale action plan that sets the direction for an organization and provides momentum for action •Strategic management process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals The Dynamics of Strategic Planning •A well developed and implemented strategy can •Encourage new ideas •Provide direction and momentum •Develop and sustain a competitive advantage Question? Wal-Mart is guided by the following credo: “Find out what customers want, then provide it to them as cheaply and quickly as possible.” This is Wal-Mart's: A. Mission B. Vision C. Strategy D. Forecast Compared to the Competition You Are Either ...
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