1. Strategic Management and Strategic Competitiveness
Chapter 1
Strategic Management and Strategic Competitiveness
Michael A. Hitt
R. Duane Ireland
Robert E. Hoskisson
©2003 South-Western Publishing Company

2. Strategy Implementation
The Strategic Management Process
Chapter 2
The External
Environment
Strategic Intent
Strategic Mission
Strategic Inputs
Chapter 3
The Internal
Environment
Strategy Formulation
Strategy Implementation
Chapter 4
Business-Level
Strategy
Chapter 5
Competitive Rivalry
and Competitive
Dynamics
Chapter 6
Corporate-
Level Strategy
Chapter 10
Corporate
Governance
Chapter 11
Organizational
Structure and
Controls
Strategic Actions
Chapter 7
Acquisition and
Restructuring
Strategies
Chapter 8
International
Strategy
Chapter 9
Cooperative
Strategy
Chapter 12
Strategic
Leadership
Chapter 13
Strategic
Entrepreneurship
Strategic
Competitiveness
Above-Average
Returns
Strategic Outcomes
Feedback

3. Important Definitions
Strategic Management Process
The full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns

4. Important Definitions
Strategic Competitiveness
Achieved when a firm successfully formulates and implements a value-creating strategy
Above-Average Returns
Occurs when a firm develops a strategy that competitors are not simultaneously implementing
Provides benefits which current and potential competitors are unable to duplicate

5. Strategic Flexibility
Organizational
slack
Strategic
Flexibility
Strategic
Flexibility
Strategic
flexibility
Strategic
reorientation
Capacity to
learn

6. I/O Model of Above-Average Returns
1. External Environments
General
Environment
Global
Technological
Economic
Sociocultural
Political/Legal
Demographic
1. Strategy dictated by the external environments of the firm (what opportunities exist in these environments?)
2. Firm develops internal skills required by external environment (what can the firm do about the opportunities?)
Industry Environment
Competitor Environment

7. Industrial Organization Model
I/O Model of Above-Average Returns
Industrial Organization Model
The External Environment
An Attractive Industry
Strategy Formulation
Assets and Skills
Superior returns: earning of above-average returns
Strategy Implementation
Superior Returns

8. Four Attributes of Resources and Capabilities (Competitive Advantage)
Valuable
allow the firm to exploit opportunities or neutralize threats in its external environment
Rare
possessed by few, if any, current and potential competitors
Resources and Capabilities
Costly to imitate
when other firms cannot obtain them or must obtain them at a much higher cost
Nonsubstitutable
the firm is organized appropriately to obtain the full benefits of the resources in order to realize a competitive advantage

9. Resources and capabilities that meet these four criteria become a source of:
Valuable
Rare
Core Competencies
Core Competencies
Resources and Capabilities
Costly to imitate
Nonsubstitutable

10. Core Competencies are the basis for a firm’s
Competitive advantage
Strategic competitiveness
Core Competencies
Ability to earn above-average returns

11. Resource-based Model of Above Average Returns
Resources
Capability
Competitive Advantage
An Attractive Industry
Superior returns: earning of above-average returns
Strategy Form/Impl
Superior Returns

12. The Firm and Its Stakeholders
Capital Market Stakeholders
Product Market Stakeholders
Organizational Stakeholders
Employees
Managers
Nonmanagers