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Chapter 1 Strategic Management Cheat Sheet (DRAFT) by

Chapter 1 Strategic Management Notes

This is a draft cheat sheet. It is a work in progress and is not finished yet.

Defining Strategic Management

Strategic Management consist of the analyses, decision, and actions an organi­zation Undertakes in order to create and sustain compet­itive advant­ages. This definition captures two main elements that go to the heart of the field of strategic management

Two main elements

The Strategic Management of an Organi­zation
The Essence of Strategic Management
Strategic management is concerned with the analysis of strategic goals (vision, mission, and strategic object­ives) along with the analysis of the internal and external enviro­nments of the organi­zation.
Next, leaders must make strategic decisions. These decisions, broadly speaking, address two basic questions: What industries should we compete in? How should we compete in those indust­ries? These questions also often involve an organi­zat­ion’s domestic and intern­ational operations.
And last are the actions that must be taken. Decisions are of little use, of course, unless they are acted on. Firms must take the necessary actions to implement their strate­gies. This requires leaders to allocate the necessary resources and to design the organi­zation to bring the intended strategies to reality.
the study of why some firms outper­forms others, Thus, managers need to determine how a firm is to compete so that it can obtain advantages that are sustai­nable over a lengthy period of time. That means focusing on two fundam­ental questions:
How should we compete in order to create compet­itive advantages in the market­place?
Managers need to determine if the firm should position itself as the low-cost producer or develop products and services that are unique and will enable the firm to charge premium prices. Or should they do some combin­ation of both?
How can we create compet­itive advantages in the market­place that are unique, valuable, and difficult for rivals to copy or substi­tute?
That is, managers need to make such advantages sustai­nable, instead of temporary.
strategic management
the analyses, decisions, and actions an organi­zation undertakes in order to create and sustain compet­itive advantages.
strategy the ideas, decisions, and actions that enable a firm to succeed.
compet­itive advantage
a firm’s resources and capabi­lities that enable it to overcome the compet­itive forces in its industry(ies).
operat­ional effect­iveness
performing similar activities better than rivals.
Operat­ional effect­iveness means performing similar activities better than rivals.