Chapter 1: Strategy, Strategic Management and Strategic Competitiveness

A. Define strategic management, strategic competitiveness, strategy, competitive advantage,

above-average returns, strategic management process.
I. Strategic management
1. Key issue
a. Business
1. Business organization
+ Business organization: an organization that provides goods and services in order to earn
profits.
Key:
 Many people working together
 provides goods and services
 Profits
+ Business: a simple model => buying and selling something
+ Business enterprise: processing inputs needed to produce products

Business enterprise: Processing inputs needed to produce products

Input companies needs: 7Ms

- Money, Man, Machine, Material => tangible

- Management, Method (business methods, procedures- p2 va quy trinh kinh doanh), Multi-
linkage (many links) => intangible
II. Strategic competitiveness
Firms achieve strategic competitiveness by formulating and implementing a value- creating
strategy.
III. Strategy (Business activity)

1. Strategy definition

A strategy is an integrated and coordinated set of commitments and actions designed to exploit
core competencies and gain a competitive advantage.
2. Consider:
- Where do we go?
- Where are we now?
- How are we going to get there reach destination?

IV. Competitive advantage

1. Definition
- A firm has a competitive advantage when by implementing a chosen strategy, it creates
superior value for customers and when competitors are not able to imitate the value the firm’s
products create or find it too expensive to attempt imitation
2. Characteristics
- Its strategy yields a competitive advantage after competitors’ efforts to duplicate it have ceased
or failed.
- The speed with which competitors are able to acquire the skills needed to duplicate the benefits
of a firm’s value-creating strategy determines how long the competitive advantage will last.
- Having and exploiting a competitive advantage successfully finds a firm creating superior value
for its customers and superior profits for itself.
 Conclude:
+ The larger is the “gap” between the value a firm’s products creates for customers and the
value competitors’ products bring to customers, the more significant is a firm’s competitive
advantage.
+ No competitive advantage is sustainable permanently => company exploit competitive
advantage today and contemplate (think in the future)
3. Competitive dimension (virtually endless)
- Technological developments => a source of competitive advantage for firms in multiple
industries
+ Saleforce.com customer relationship management (CRM) firm that uses cloud computing
extensively, recently “debuted a CRM solution that uses machine learning to build
comprehensive data-based customer profiles, identify crucial touch points and uncover
additional sales opportunities.”
- Adaptability and flexibility
 + Netflix is build ing competitive advantages in terms of its original program ming and its
customer interface platform that creates unique experiences for individual users.
- Trust
+ “Unlike other online retailers, 67% of Amazon customers trust the company to protect their
privacy.
V. Above-average returns
1. Above-average returns
- Above-average returns are returns in excess of what an investor expects to earn from other
investments with a similar amount of risk
2. Risk
- Risk is an investor’s uncertainty about the economic gains or losses that will result from a
particular investment.
3. Average returns
- Average returns are returns equal to those an investor expects to earn from other investments
possessing a similar amount of risk.
- Failure occurs because investors withdraw their investments from those firms earning less-than-
average returns.
- I/O: How a company is affected by the external factors and industries.
+ Above-average return:

4. The strategic management process is the full set of commitments, decisions, and actions firms
take to achieve strategic competitiveness and earn above-average returns.

- Know conditions first: The

firm’s first step in the process
is to analyze its external
environment and internal
organization to identify
external opportunities and
threats and to recognize its
internal resources,
capabilities, and core
competencies. The results of
these analyses influence the
selection of the firm’s
strategy or strategies.
- With the information gained
from external and internal
analyses, the firm develops its
vision and mission and
formulates one or more
 strategies.
- To implement its strategies,
the firm takes actions to
enact each one with the
intent of achieving strategic
competitiveness and above-
average returns
(performance). Effective
actions that take place in the
context of integrated strategy
formulation and
implementation efforts result
in positive performance.
Firms seek to maintain the
quality of what is a dynamic
strategic management
process as a means of dealing
successfully with ever-
changing markets and
evolving internal conditions.

B. Describe the competitive landscape and explain how globalization and technological changes
shape it

- Resource-based models
Strategic management
21st Century Competition

1. Hypercompetition is a condition where competitors engage in intense rivalry, markets

change quickly and often, and entry barriers are low.
- Price-quality positioning: High quality with reasonable price
 - Know-how: Bí quyết kinh doanh, chỉ riêng doanh nghiệp có, mà các doanh nghiệp khác không
có.
Bởi vậy, Khi 1 doanh nghiệp có know-how hay solutions hay, doanh nghiệp thường đăng kí bản
quyền/sở hữu trí tuệ.
- First-mover advantages: profit, positioning, business rule (luật chơi trong kinh doanh)
Business rule (luật chơi trong kinh doanh)-creating innovation: Doanh nghiệp sẽ tạo ra luật lệ,
chuẩn mực trong thị trường, các followers muốn thành công sẽ phải làm theo.
Eg: Apples

Protection or Invasion (geographic/product markets)

- Products markets: Những tệp khách hàng giống nhau cùng mua 1 loại sản phẩm
- Protection -Khi doanh nghiệp đã thành công, phải làm cách nào để không có sự xâm lấn, gia
nhập để cạnh tranh vào thị trường đó, bảo vệ vị trí first-movers
+ Solutions: Creative and innovative, create new things
- Invasion: Khả năng thâm nhập thị trường, làm followers

- Customer-needs oriented: focus on what the customers need

- Valuable competencies (những nguồn năng lực có giá trị): nguồn resoures giúp doanh nghiệp
tạo ra lợi nhuận => must effective use
Strategy

- Vision: A picture of what the company want to become and, in broad term, what it want to ultimately
achieve.

+ Strategic vision:

- Mission: Specification of business or businesses in which the firm intend to compete and
customers it intend to serve.
+ Cái mà doanh nghiệp đáp ứng mong mỏi của xã hội, vai trò của doanh nghiệp trong xã hội
(doanh nghiệp đáp ứng gì cho những bên liên quan-stakeholders)
Eg: provide employment, bring profit for investors, contribute to the economy growth,..
+ Stakeholder:

Stakeholder
Competitive advantages

Profit (Performance)