strategic managment

Strategic Management

Process of analyzing, choosing, and implementing strategies to achieve competitive advantage

PESTEL Framework

Tool used to analyze macro-environmental factors affecting a firm

Political Factors

Government policies, taxes, and regulations that affect businesses

Economic Factors

Inflation, interest rates, economic growth affecting purchasing power

Social Factors

Demographics, culture, and lifestyle trends influencing demand

Technological Factors

Innovations and technological changes impacting industries

Environmental Factors

Ecological and sustainability issues affecting firms

Legal Factors

Laws and regulations governing business operations

Purpose of PESTEL

Identify external opportunities and threats

Porter's Five Forces

Model used to analyze industry competition and profitability

Rivalry

Intensity of competition among existing firms

Threat of New Entrants

Ease with which new competitors can enter an industry

Buyer Power

Customers' ability to influence price and quality

Supplier Power

Suppliers' ability to increase costs or reduce quality

Threat of Substitutes

Availability of alternative products that meet the same need

Key Rule of Five Forces

Stronger forces = lower industry profitability

Industry

A group of firms producing similar products or services

Strategic Groups

Firms within an industry with similar strategies

Market Segments

Different groups of customers with distinct needs

Simple Environment

Few factors, low uncertainty

Complex Environment

Many variables, high uncertainty

Static Environment

Slow rate of change

Dynamic Environment

Fast rate of change

Resource-Based View (RBV)

The idea that firms gain advantage from unique internal resources

Tangible Resources

Physical assets such as buildings, equipment, and cash

Intangible Resources

Non-physical assets like brand, reputation, and patents

Human Resources

Skills, knowledge, and experience of employees

Capabilities

Ability to use resources effectively

Core Competences

Key strengths that provide competitive advantage

VRIN Framework

Model to evaluate if resources create sustained advantage

Valuable

Resource adds value to customers or firm

Rare

Resource is not widely possessed by competitors

Inimitable

Resource is difficult to copy

Non-substitutable

No alternative resource can replace it

Competitive Parity

When firms have similar resources and no advantage

Sustained Competitive Advantage

Long-term advantage based on VRIN resources

Value Chain

Model that describes activities that create value in a firm

Primary Activities

Activities directly related to production and delivery (e.g., operations, marketing)

Support Activities

Activities that assist primary activities (e.g., HR, technology)

Inbound Logistics

Receiving and storing inputs

Operations

Transforming inputs into products

Outbound Logistics

Distributing products to customers

Marketing and Sales

Promoting and selling products

Service

After-sales support and maintenance

Human Resource Management

Hiring, training, and managing employees

Technology Development

Research and innovation activities

Procurement

Purchasing inputs and materials

Benchmarking

Comparing firm performance with competitors or best practices

SWOT Analysis

Framework analyzing strengths, weaknesses, opportunities, and threats

Strengths

Internal factors that give a firm an advantage

Weaknesses

Internal factors that disadvantage a firm

Opportunities

External factors that a firm can exploit

Threats

External factors that may harm a firm

CAME Framework

Tool to turn SWOT into strategic actions

Correct Weaknesses

Fix internal problems identified in SWOT

Adapt to Threats

Adjust strategy to reduce external risks

Maintain Strengths

Preserve and reinforce internal advantages

Exploit Opportunities

Take advantage of external growth possibilities

Competitive Advantage

Ability of a firm to outperform competitors

Cost Leadership

Strategy focused on being the lowest-cost producer

Differentiation

Strategy focused on offering unique products

Focus Strategy

Targeting a specific niche market

Strategic Capability

Combination of resources and competences enabling success

Strategic Position

Firm's position based on environment, capabilities, and stakeholders

Strategy Process

External analysis → Internal analysis → SWOT → Strategy choice

Porter's Diamond

Model explaining national competitive advantage

Factor Conditions

Availability of resources like labor and infrastructure

Demand Conditions

Home market demand influencing innovation

Related Industries

Presence of supporting industries

Firm Strategy and Rivalry

Competition and management practices within a country

High Entry Barriers

Result in low threat of new entrants

Strong Supplier Power

Reduces firm profitability

Strong Buyer Power

Forces prices down and reduces profits

Substitutes Effect

Limit price and profitability of firms

Primary vs Support Activities

Primary create value directly, support assist operations

Internal vs External Factors

Internal = strengths/weaknesses, External = opportunities/threats

Nike Strategy Type

Broad differentiation strategy

Nike Strength Example

Strong global brand and innovation

Nike Weakness Example

Reliance on outsourced manufacturing

Nike Opportunity Example

Digital growth and emerging markets

Nike Threat Example

Strong competition and economic downturns

Nike Core Competence

Innovation and brand marketing

Nike Competitive Advantage

Brand, athlete endorsements, and innovation

Nike Value Chain Strength

Marketing and direct-to-conser channels

Direct-to-Consumer Strategy

Selling directly to customers without intermediaries

Blue Ocean Strategy

Creating new market space with little competition

Matrix Structure

Organization where employees report to multiple managers

Strategy Implementation

Process of putting strategy into action through leadership and structure

SMART Goals

Specific, Measurable, Achievable, Relevant, Time-bound objectives