concepts of strategy

Question 1

What is strategy?

Answer 1

Strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.

Question 2

What is the strategic management process?

Answer 2

1. External enviro analysis, internal enviro analysis (core competencies, resources, strategic inputs)
2. Vision and mission developed, strategies formulated
3. strategies implemented: goal of achieving strategic competitiveness, above average returns

Question 3

What is the competitive landscape?

Answer 3

1. globalisation: emergence of a global economy
2. technology: rapid changes
3. industry boundaries blurring: entertainment industry boundaries blurred

Question 4

Porters 5 forces

Answer 4

• bargaining power of suppliers
• bargaining power of buyers
• product substitutes (soft drink = thirst quenching)
• potential entrants to industry
• rivalry

Question 5

What are the two models of strategic decision making?

Answer 5

External = I/O model

• study external environment
• locate industry with high potential for above average returns
• identify the strategy called for by the attractive industry to earn above average returns
• develop or acquire assets and skills needed to implement the strategy
• use the firms strength (assets and skills) to implement the strategy

Internal = resource based model

• identify resources. study strengths and weaknesses compared with competitors
• determine firms capabilities.
• determine potential firms resources and capabilities in terms of competitive advantage.
• locate an attractive industry.
• select a strategy that best allows the firm to utilise its resources and capabilities relative to opportunities in the external environment