Chapter 01r

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©2003 South-Western Publishing Company 1

Strategic Management andStrategic Management and

Strategic CompetitivenessStrategic Competitiveness

Michael A. Hitt

R. Duane Ireland

Robert E. Hoskisson

Chapter 1Chapter 1

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2

Strateg ImplementationStrateg Implementation

Chapter 13Chapter 13

StrategicStrategic

EntrepreneurshipEntrepreneurship


OrganizationalOrganizational

Structure andStructure and

ControlsControls


CorporateCorporate

GovernanceGovernance


StrategicStrategic

LeadershipLeadership

Strateg !ormulationStrateg !ormulation

StrategicStrategic

CompetitivenessCompetitiveness

AboveAverageAboveAverage

!eturns!eturns

Strategic "ntentStrategic "ntent

Strategic #issionStrategic #ission

Chapter 2Chapter 2

$he E%ternal$he E%ternal

EnvironmentEnvironment

Chapter 3Chapter 3

$he "nternal$he "nternal


"he Strategic"he Strategic

ManagementManagement

#rocess#rocess

&eedbac' &eedbac'

S t r a t e g i c " n p u t s

S t r a t e g i c " n p u t s

S t r a t e g i c A c t i o n s

S t r a t e g i c A c t i o n s

S t r

a t e g i c O u t c o m e s

S t r

a t e g i c O u t c o m e s

Chapter (Chapter (

CorporateCorporate

Level Strateg)Level Strateg)

Chapter *Chapter *

CooperativeCooperative

Strateg)Strateg)

Chapter +Chapter +

Competitive !ivalr)Competitive !ivalr)

and Competitiveand Competitive

,)namics,)namics

Chapter -Chapter -

"nternational"nternational

Strateg)Strateg)

Chapter .Chapter .

/usinessLevel/usinessLevel

Strateg)Strateg)

Chapter Chapter

Acuisition andAcuisition and

!estructuring!estructuringStrategiesStrategies

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Important De%initionsImportant De%initions

Strategic Management ProcessStrategic Management ProcessThe full set of commitments, decisions,The full set of commitments, decisions,

and actions required for a firm to achieveand actions required for a firm to achieve

strategic competitiveness and earnstrategic competitiveness and earn

above-average returnsabove-average returns

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&

Important De%initionsImportant De%initions

Strategic CompetitivenessStrategic CompetitivenessAchieved when a firm successfull formulatesAchieved when a firm successfull formulates

and implements a value-creating strategand implements a value-creating strateg

!ccurs when a firm develops a strateg that!ccurs when a firm develops a strateg that

competitors are not simultaneouslcompetitors are not simultaneouslimplementingimplementing

Provides benefits which current and potentialProvides benefits which current and potentialcompetitors are unable to duplicatecompetitors are unable to duplicate

Above-Average "eturnsAbove-Average "eturns

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Strategic

!le(ibilit

Strategic

!le(ibilit

Strategic !le(ibilitStrategic !le(ibilit

StrategicStrategic

%le(ibilit%le(ibilitStrategicStrategic

reorientationreorientation

Capacit toCapacit to

learnlearn

)rgani*ational)rgani*ational

slack slack

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+

,.,. Strateg dictated b theStrateg dictated b the

e(ternal environments o%e(ternal environments o%

the %irm -hatthe %irm -hat

opportunities e(ist inopportunities e(ist in

these environments/0these environments/0

2.2. !irm develops internal!irm develops internal

skills re1uired bskills re1uired be(ternal environmente(ternal environment

-hat can the %irm do-hat can the %irm do

about the opportunities/0about the opportunities/0

GeneralGeneral


GlobalGlobal

TechnologicalTechnological

E c o n o m i c

E c o n o m i c

S o c i o

c u l t u

r a l

S o c i o

c u l t u

r a l

P o l i t i c

a l / L e g a l

P o l i t i c

a l / L e g a l D

e m o g r a p h i c

D

e m o g r a p h i c

,. E(ternal Environments

IndustryEnvironment

Competitor

Environment

"O #odel o AboveAverage !eturns"O #odel o AboveAverage !eturns

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"O #odel o AboveAverage !eturns"O #odel o AboveAverage !eturns

"ndustrial Organization

#odel

"he E(ternal Environment"he E(ternal Environment

An Attractive IndustrAn Attractive Industr

Strateg !ormulationStrateg !ormulation

Assets and SkillsAssets and Skills

Strateg ImplementationStrateg Implementation

Superior ReturnsSuperior Returns

Superior returns: earning

of above-average returns

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&our Attributes o !esources and&our Attributes o !esources and

Capabilities 4Competitive Advantage5Capabilities 4Competitive Advantage5

the %irm is organi*ed appropriatel tothe %irm is organi*ed appropriatel toobtain the %ull bene%its o% the resources inobtain the %ull bene%its o% the resources inorder to reali*e a competitive advantageorder to reali*e a competitive advantage

6aluable6aluable allo the %irm to e(ploit opportunities orallo the %irm to e(ploit opportunities orneutrali*e threats in its e(ternalneutrali*e threats in its e(ternalenvironmentenvironment

!are!are possessed b %e4 i% an4 current and possessed b %e4 i% an4 current and potential competitors potential competitors

Costl) to imitateCostl) to imitate hen other %irms cannot obtain them orhen other %irms cannot obtain them or

must obtain them at a much higher costmust obtain them at a much higher cost

7onsubstitutable7onsubstitutable

R e s o u r c e s a n d C a p a b i l

i t i e s


i t i e s

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Core CompetenciesCore Competencies

Resources and capabilities that meet

these %our criteria become a source o%6

6aluable6aluable

!are!are

Costl) to imitateCostl) to imitate

7onsubstitutable7onsubstitutable



i t i e s


i t i e s

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Core Competencies are the basis %or a

%irm8s

CompetitiveCompetitive

advantageadvantage

StrategicStrategic

competitivenesscompetitiveness

Abilit) to earnAbilit) to earnaboveaverageaboveaverage

returnsreturns


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,,

!esourcebased #odel o Above Average!esourcebased #odel o Above Average

!eturns!eturns!esourcebased!esourcebased

#odel#odel

ResourcesResources

CapabilitCapabilit

Competitive AdvantageCompetitive Advantage

An Attractive IndustrAn Attractive Industr

Strateg !orm9ImplStrateg !orm9Impl

Superior ReturnsSuperior Returns

Superior returns: earningSuperior returns: earning

of above-average returnsof above-average returns

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Capital #ar'et Sta'eholdersCapital #ar'et Sta'eholders

8roduct #ar'et Sta'eholders8roduct #ar'et Sta'eholders

Organizational Sta'eholdersOrganizational Sta'eholders

"he !irm and Its Stakeholders"he !irm and Its Stakeholders

EmploeesEmploees

ManagersManagers

:onmanagers :onmanagers

Sta#eholdersSta#eholders

Documents

Chapter 01r