This document outlines the key themes of strategic management. It discusses the changing competitive landscape where industry boundaries are blurring due to technological changes and globalization. It presents two models for achieving superior profitability: the industrial organization model which focuses on external industry factors, and the resource-based model which focuses on internal resources and capabilities. It also discusses strategic intent, mission, and key stakeholder groups that are important for firms.

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

2. Challenge of Strategic Management
Changing Competitive Landscape
Two Models of Superior Profitability
Key Stakeholder Groups
Industrial Organization Model
Resource-Based Model
Chapter One: Key Themes

3. Competitive success is transient...unless care
is taken to preserve competitive position
Challenge of Strategic Management
Only 2 of the top 25 U.S. corporations in
1900 are still competitive today!
In a recent year, almost 150,000 U.S.
businesses failed or filed for bankruptcy

4. The pace of change
is relentless....
and increasing
Traditional industry
boundaries are
blurring...such as
Computers
Telecommunications
New Competitive Landscape
Rapid technological changes
Rapid technology diffusions
Dramatic changes in
information and
communication technologies
Increasing importance of
knowledge
Fundamental nature of
competition is changing

5. The global economy is
changing
Traditional sources of
competitive advantage
no longer guarantee
success
New keys to success
include:
Flexibility
Innovation
Integration
Speed
New Competitive Landscape
People, goods, services and
ideas move freely across
geographic boundaries
New opportunities emerge in
multiple global markets
Markets and industries become
more internationalized

6. 2
Alternative Model of Superior Returns
Industrial Organization Model
1
Resource-Based Model

7. I/O Model of Superior Returns
The Industrial Organization Model
suggests that above-average returns
for any firm are largely determined
by characteristics outside the firm.
The I/O model largely focuses on
industry structure or attractiveness of
the external environment rather than
internal characteristics of the firm.

8. The Resource-Based Model suggests
that above-average returns for any
firm are largely determined by
characteristics inside the firm.
The Resource-Based view focuses on
developing or obtaining valuable
resources and capabilities which are
difficult or impossible for rivals to
imitate.
Resource-Based Model of Superior Returns

9. Winning competitive battles through deciding how
to leverage internal resources, capabilities, and
core competencies.
Strategic Intent
An application of strategic intent in terms of
products to be offered and markets to be served.
Strategic Mission

10. Stakeholders
Firm
Groups who are affected by a firm’s performance
and who have claims on its performance
Product Market
Organizational
Capital Market
Stock market/Investors
Debt suppliers/Banks
Employees
Managers
Non-Managers
The firm must maintain performance at
an adequate level in order to maintain
the participation of key stakeholders
Primary Customers
Suppliers