Notes on Strategic Management

A strategy is a set of actions that managers take to increase their companys performance relative to rivals, if the strategy results in superior performance = competitive advantage. What is competitive advantage? emulous receipts: when profitability is greater than the average profitability for all(prenominal) firms in its constancy (same strategic group). To gain competitive Advantage company must execute Superior performance with:: * Strategies * Characteristics of industry in which it competes in. * Ex: excess capacity + monetary value wars, excess demand + raising wrongs. Profitability: the return that a company makes on the capital invested in the enterprise. * Profit: later tax earnings * Capital: sum of money invested in a company (used to buy resources needed to sell goods and services. * When using resources efficiently = positive return on invested capital. SO, Efficient Company (high performance)= high profitability + higher return on invested capital. NOTE: high gear profitability among competing companies could induce naked entering companies to enter the industry (while they are busy in competitive war no1 notices the new guy sneaking in). New entrants=depressed prices and profits. (argument against competitive advantage) create blocks of achieving profitability.

(Resources and capabilities). * Efficiency * Quality * Innovation * customer responsiveness Michael Porter in 1985 in his book private-enterprise(a) Advantage: Creating and Sustaining Superior Performance. Porter called the generic strategies Cost leadership, Differentiation (creating uniquely desirable products and services) and rivet (offering a alter service in a niche market). He whence subdivided the Focus strategy into two parts: Cost Focus and Differentiation Focus. Cost leadership Remember that Cost Leadership is about minimizing the cost to the organization of delivering products and services. The cost or price paid by the... If you want to get a dear essay, order it on our website: Ordercustompaper.com

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