Chapter 1 & 2 - STRATEGY
Firms achieve strategic competitiveness by formulating and implementing a
value creating strategy
A strategy is an integrated and coordinated set of commitments and actions
designed to exploit core competencies and gain a competitive advantage
A firm has a competitive advantage when by implementing a chosen strategy
it creates superior value for consumers and when competitors are not able to
imitate the value the firms’ products create or find it too expensive to attempt
imitation
When choosing a strategy firms look at competitor’s strategy to decide how
they will pursue strategic competitiveness, therefore decide what they will and
won’t do.
No competitive advantage is permanent
The speed in which competitors can acquire the skills needed to duplicate that
strategy determines how long the competitive advantage will last
Digitalisation = converting something to a digital form
Firms understanding digitalisation and its capabilities may be able to
outperform their rivals
Benefit is that it allows firms to identify specific customer groups and then
serve to their specialised and unique needs.
Conventional sourcing of competitive advantage are not as effective as they
once were e.g. EOS and large advertising budgets (e.g. because of social
media) in terms of earning above average returns
Hyper competition is when competitors engage in intense rivalry, markets
change quickly and often barriers are low
- In these environments it is hard to maintain a competitive advantage
- rivalry usually occurs among global competitors who innovate regularly
and successfully
- two primary factors that can create a hyper competitive environment and
influence the nature of the current competitive landscape are: the emergence
of a global economy and technology / specifically rapid technological change
Global economy = goods, services, people, skills and ideas move freely across
geographical borders
Globalisation is the increasing economic interdependence among countries and
their organisations reflected in the flow of the products, financial capital and
knowledge across country borders.
Firms achieve strategic competitiveness by formulating and implementing a
value creating strategy
A strategy is an integrated and coordinated set of commitments and actions
designed to exploit core competencies and gain a competitive advantage
A firm has a competitive advantage when by implementing a chosen strategy
it creates superior value for consumers and when competitors are not able to
imitate the value the firms’ products create or find it too expensive to attempt
imitation
When choosing a strategy firms look at competitor’s strategy to decide how
they will pursue strategic competitiveness, therefore decide what they will and
won’t do.
No competitive advantage is permanent
The speed in which competitors can acquire the skills needed to duplicate that
strategy determines how long the competitive advantage will last
Digitalisation = converting something to a digital form
Firms understanding digitalisation and its capabilities may be able to
outperform their rivals
Benefit is that it allows firms to identify specific customer groups and then
serve to their specialised and unique needs.
Conventional sourcing of competitive advantage are not as effective as they
once were e.g. EOS and large advertising budgets (e.g. because of social
media) in terms of earning above average returns
Hyper competition is when competitors engage in intense rivalry, markets
change quickly and often barriers are low
- In these environments it is hard to maintain a competitive advantage
- rivalry usually occurs among global competitors who innovate regularly
and successfully
- two primary factors that can create a hyper competitive environment and
influence the nature of the current competitive landscape are: the emergence
of a global economy and technology / specifically rapid technological change
Global economy = goods, services, people, skills and ideas move freely across
geographical borders
Globalisation is the increasing economic interdependence among countries and
their organisations reflected in the flow of the products, financial capital and
knowledge across country borders.
