Group 4 Alma Pena Jose Medina Laura Randall Mona Shafer Melissa Dunlop Raul Guerrero Chapter 2

 Managing Strategically:  To formulate and implement strategies that allow an organization to develop and maintain a competitive advantage  Competitive Advantage:  Aspect that sets a company apart in the industry Under Armour vs. Nike

Getting and keeping a competitive advantage is what managing strategically is all about

1. Industrial Organization (I/O) 2. Resource-Based View (RBV) 3. Guerrilla View

 Industrial Organization View focuses on:  structural forces within an industry  competitive environment of firms  and the influence of competitive advantage

 Looking internally at your resources  Exploit your resources  Financial, physical, human, intangible, and structural or cultural assets

 Unique resource adds value to your firm  Exploit external circumstances that increase revenue  Avoid negative external environment that changes cash flows  Context of what else is going on externally  A resource is rare if no other competing form already has it

 A firm should have resources that a competing firm should not be able to imitate or substitute  A firm needs to be able to also exploit their unique resources in order to create a competitive advantage

 Concept that a firm’s competitive advantage is only temporary, and that the environment is constantly changing  Through the guerrilla view a firm needs to be able to constantly adapt to new changes in technology, market instabilities, and any other change that may affect their industry

 Information Revolution  Technology  Globalization

 Information has set the tone for the business environment  Information is used to make processes more effective and efficient o Producing goods and services o Designing work tools o Organizational processes o Management systems  Today Information is an essential resource of production

 Using equipment, materials, knowledge, and experience to perform tasks  Technology plays different roles in different industries  The later part of the 20 th century technology really took off  Technology effects three areas in the business environment  Innovation  Bottom-up Capability  Organizational Performance

 Globalization influences strategic management in two ways  Global Markets  To sustain a competitive advantage a company may need to break into new markets  Any location is a potential marketplace but to be strategic managers should consider the global economic climate  Global Competition  It may be more challenging to understand a company with a different background  Global alliances

 Continual Change  Reduced Need for Physical Assets  Vanishing Distance and Compressed Time  Vulnerability

 All organizations deal with change  Stimulates need for organizational change

 In the past, the more physical assets you had, the more economically powerful you were  Now, value is in intangible factors  Achieve competitive advantage with nonphysical assets

 Physical distance and time constraints have disappeared  Geography no longer an important role  Potential markets and competitors found anywhere  Ability to instantly interact

 Information, facilities, and employees are vulnerable  Global computer viruses  Terrorist attacks  Biological attacks

 Opportunities  Challenges The internet and iTunes

 Strategic decision makers  Initiate & Oversee  Facilitate successful implantation  Provide support

7 Dimensions of Organizational Innovation 1. Challenges 2. Customer Focus 3. Creativity 4. Communication 5. Collaboration 6. Completion 7. Contemplation Innovative Organization: The ability to channel creativity into useful outcomes “create and innovate or fail”

World-Class Organization Egalitarian Climate Significant Technological Support Strong Customer Focus Continual Learning and improvement Creative Human Resource Management Flexible Organization Structure

 Broad  Looks into the Future  Single Vision  4 Components  Built on the organization’s core values and beliefs  Elaborate a purpose for the organization  Brief summary of what the organization does  Specifies broad goals

 Specific  Looks into the Present  Several Missions

 Organizations have larger societal roles to play and serve many constituents. Not just stockholders!!  Shareholders  Governments  Customers  Social Action Groups  Employees  Communities  Suppliers  Trade Associations  Political Action Groups BP: Gulf Oil Spill

 Doing the right Thing!  Involves the principles that define right and wrong decisions and behavior. In other words, as we live our lives.

 To sustain a competitive advantage in a constantly changing environment all three views (Industrial Organization, Resourced-Based and Guerilla View) should be taken into consideration.  The three driving forces of the business environment are information, technology, and globalization.  Vision, Mission, Corporate Social Responsibility and Ethics are four elements that strategic decision makers should consider when guiding and managing an organization.