Professional Documents
Culture Documents
Robert E. Hoskisson
Michael A. Hitt
R. Duane Ireland
The PowerPoint slides for this textbook were prepared by:
R. Dennis Middlemist
Professor of Management
Colorado State University
If you have any concerns, contact me directly at
Dennis@Middlemist.com
Introduction to
Strategic Management
Robert E. Hoskisson
Michael A. Hitt
R. Duane Ireland
Chapter 3 Chapter 4
Strategic Strategic Intent
The External The Internal
Analysis Environment Organization
Strategic Mission
Chapter 5 Chapter 6
Chapter 7
Business-Level Competitive Rivalry and
Creating Strategy Competitive Dynamics
Corporate-Level Strategy
Competitive
Advantage Chapter 8
Chapter 9 Chapter 10
Acquisition and
International Strategy Cooperative Strategy
Restructuring Strategies
Monitoring
And Creating Chapter 11 Chapter 12
Entrepreneurial Corporate Governance Strategic Entrepreneurship
3
Opportunities
Discussion Questions
Click
Here 1. What is strategy?
Click
Here 2. What is happening in the strategic
environment?
Click
Here 3. What is strategic flexibility and why
is there a need for it?
Click
Here 4. What is the Industrial Organization
(IO) Model of Strategy?
Click
Here 5. What is the Resource-Based Model
of Strategy?
Click
Here More discussion questions 4
Discussion Questions (cont.)
Click
Here 6. What is strategic intent and how is
it related to strategic mission?
Click
Here 7. How do stakeholders affect
strategy?
Click
Here 8. What is the role of the strategist
(top executive)?
5
Discussion Question 1
What is strategy?
6
Definitions
Strategic Management Process
The full set of commitments, decisions,
and actions required for a firm to create
value and earn above-average returns
Value Creation
What is achieved when a firm
successfully formulates and implements a
strategy that other companies are unable
to duplicate or find too costly to imitate.
7
Definitions
Average Returns
Returns that are equal to those an investor
expects to earn from other investments with
a similar amount of risk
Above-Average Returns
Returns that are in excess of what an investor
expects to earn from other investments with a
similar amount of risk
8
Definitions
Risk
An investor’s uncertainty about the
economic gains or losses that will result
from a particular investment
Click
Here Return to Discussion Questions
9
Discussion Question 2
10
Competitive Landscape
Dynamics of strategic
maneuvering among
global and innovative
combatants
Price-quality
positioning, new know-
how, first mover
Hypercompetitive Protect or invade
environments established product or
Fundamental nature of geographic markets
competition is changing 11
Competitive Landscape
Goods, services, people,
Emergence of skills, and ideas move
global economy freely across geographic
borders
Spread of economic
innovations around the
world
Hypercompetitive Political and cultural
environments adjustments are
Fundamental nature of required
competition is changing 12
Competitive Landscape
Increasing rate of
Emergence of technological change and
global economy diffusion
Rapid technological The information age
change
Increasing knowledge
intensity
Hypercompetitive
environments Click
Here Return to Discussion
Fundamental nature of Questions
competition is changing 13
Discussion Question 3
14
Strategic Flexibility
A set of capabilities used to respond to
various demands and opportunities
existing in a dynamic and uncertain
competitive environment
It involves coping with uncertainty and the
accompanying risks
15
Strategic Flexibility
Organizational
slack
Strategic Strategic
reorientation Flexibility
flexibility
Capacity to
learn Click
Here Return to Discussion
Questions
16
Discussion Question 4
17
I/O Model of Above-Average Returns
1. External Environments
General 1. Strategy dictated by the
Global external environment of
the firm (what
l
ega
De
Industry
l /L
mo
opportunities exist in
ca
gra
Environment
these environments?)
liti
ph
Po
ic
2. Firm develops internal
skills required by
So
c
cio
mi
Environment
Ec
19
Four Assumptions of the I/O Model
3. Resources used to implement strategies
are highly mobile across firms
4. Organizational decision makers are
assumed to be rational and committed to
acting in the firm’s best interests, as
shown by their profit-maximizing
behaviors
20
I/O Model of Above-Average Returns
Industrial Organization 1. Study the external
Model environment, especially the
industry environment
The External Environment • economies of scale
• barriers to market entry
• diversification
• product differentiation
• degree of concentration of
firms in the industry
21
I/O Model of Above-Average Returns
Industrial Organization 2. Locate an attractive industry
Model with a high potential for
above-average returns
The External Environment
22
I/O Model of Above-Average Returns
Industrial Organization 3. Identify the strategy called
Model for by the attractive industry
to earn above-average returns
The External Environment
An Attractive Industry
23
I/O Model of Above-Average Returns
Industrial Organization 4. Develop or acquire assets and
Model skills needed to implement
the strategy
The External Environment
An Attractive Industry
Strategy Formulation
24
I/O Model of Above-Average Returns
Industrial Organization 5. Use the firm’s strengths (its
Model developed or acquired assets
and skills) to implement the
The External Environment strategy
An Attractive Industry
Strategy Formulation
An Attractive Industry
Strategy Formulation
Superior Returns
26
Discussion Question 5
27
Resource-based Model of Above
Average Returns
28
Resource-based Model of Above
Average Returns
Resource-based 1. Identify the firm’s
Model resources-- strengths and
weaknesses compared with
Resources competitors
Resources: inputs into a firm’s
production process
29
Resource-based Model of Above
Average Returns
Resource-based 2. Determine the firm’s
Model capabilities--what it can do
better than its competitors
Resources
30
Four Attributes of Resources and
Capabilities (Competitive Advantage)
Valuable allow the firm to exploit opportunities or
neutralize threats in its external
Valuable
Nonsubstitutable
32
Core Competencies are the basis for a
firm’s
Competitive
advantage
Value Creation
Core Competencies
Ability to earn
above-average
returns
33
Resource-based Model of Above
Average Returns
Resource-based 3. Determine the potential of the
Model firm’s resources and
capabilities in terms of a
Resources competitive advantage
Capability
34
Resource-based Model of Above
Average Returns
Resource-based 4. Locate an attractive industry
Model
Resources
Capability
Competitive Advantage
Competitive Advantage
An Attractive Industry
Strategy formulation and
Strategy Form/Impl implementation: strategic
actions taken to earn above
average returns 36
Resource-based Model of Above
Average Returns
Resource-based
Model Click
Here Return to Discussion
Questions
Resources
Capability
Competitive Advantage
Superior Returns
37
Discussion Question 6
38
Strategic Intent & Mission
Strategic Intent
Winning competitive battles by leveraging the
firm’s resources, capabilities, and core
competencies
Strategic Mission
An application of strategic intent in terms of
products to be offered and markets to be served
Click
Here Return to Discussion Questions
39
Discussion Question 7
40
The Firm and Its Stakeholders
Stakeholders
Groups
The firmwho
mustaremaintain
affected by a
firm’s
performance
performance
at an adequate
and who
have
level claims
in orderontoits
retain
wealth
the
participation of key
stakeholders
41
The Firm and Its Stakeholders
Stakeholders
Shareholders
Capital Market Stakeholders Major suppliers of capital
•Banks
•Private lenders
•Venture capitalists
42
The Firm and Its Stakeholders
Stakeholders
Primary customers
Product Market Stakeholders Suppliers
Host communities
Unions
43
The Firm and Its Stakeholders
Stakeholders
Employees
Organizational Stakeholders Managers
Nonmanagers
44
Stakeholder Involvement
45
Stakeholder Involvement
47
Organizational Strategists
Serve as a major source of
competitive advantage
Are held responsible by stakeholders
Make decisions regarding
development, acquisition, cost and
use of resources
Assess risks of strategic actions
48