Post on 09-Feb-2018
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Chapter 1: Strategic Leadership:Managing the Strategy Making Process
for Competitive Advantage
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Business Organizations
An organization is a
collection of functions or
departments working
together to bring aproduct or service to
market.
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Types of Organizations
Sole Proprietorship
owner/operator.
Partnershipthe business is
owned by two or morepeople.
Corporationa business
entity that issues shares of
ownershipcan be public
or private
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Strategy
1. Defined as a set of actions that are related,used by managers to increase organizationalperformance
2. Strategic leadershiphow to manage anorganizations strategy making process toimprove organizational performance
a. Strategy making processthe selection andimplementation of a choice of processesdesigned to advance organizational goals
b. Strategy formulationthe task and process ofselecting organizational strategies
c. Strategy implementationtranslating the
selected strategy into actioni. Designing, delivering, and supporting productsii. Improving the efficiency and effectiveness of an
organization
iii. Designing an organizations structure, controlsystems, and culture
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Maximizing Organizational Value
1. Profitabilitythe ability of an organizationto generate financial returns for its investors
a. Return on invested capitalearnings generatedfrom money used to start and operate a businessmeasured as net income after taxes/(capital anddebt)
b. Measures the efficiency and effectiveness of theuse of a firms capital
c. Profit growththe increase in an organizationsnet profit over time
2. Shareholder Valuethe reason whyinvestors purchase shares of a corporation
a. Includes anticipated share price appreciationan increase in stock price
b. Includes anticipated dividendsfunds generatedby an organization that are paid to shareholders
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Competitive Advantage
1. A competitive advantage iswhere an organization obtainsgreater profitability than theaverage profitability of other
organizations competing for thesame set of customers
2. Sustained competitive advantagewhen an organizations
strategies allow it to maintainabove average profits for anumber of years
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Business Model
A business model is
managements conception
of how a set of strategies can
be used in a coherentmanner to enable an
organization to obtain a
competitive advantage,
achieve superior profitability,and provide above average
profit growth
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Business Model (Continued)
A business model specifies how acompany will:
1. Select its customers
2. Define and differentiate its product
offerings3. Create value for its customers
4. Acquire and keep customers
5. Produce goods and services
6. Deliver goods and services to the
market7. Organize the firms activities
8. Configure the organizations resources
9. Achieve and sustain profitability, and
10. Grow the business over time
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Variations in Performance by Industry
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Types of Managers
1. General Managersbear overallresponsibility for the organization orone of its major self-contained units
2. Functional Managerssupervise a
particular task, activity, or operation
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