1. Chapter 2: The Context of Managing Strategically
Strategic Management in Action by Mary Coulter

2. Describe the Different Perspectives on Competitive Advantage
Managing Strategically- formulating and implementing strategies that allow an organization to develop and maintain a competitive advantage.
Competitive Advantage- what sets and organization apart or what is its competitive edge.
Competitive advantage is necessary for an organization’s long term success and survival

3. 3 Different Perspectives
Industrial Organization View (I/O View)
Look at impact of external factors
Resource Based View (RBV)
Emphasizes exploiting organizational resources in order to develop and maintain a competitive advantage.
Guerrilla View
More contemporary
Table 2.1 in SM in Action

4. The Industry Organization View
Developed by Michael Porter
structural forces within an industry
the competitive environment of firms
how these influence competitive advantage
Emphasizes choosing the BEST industries
Analyze external forces and base strategic decisions on the analysis
Competitive advantage relates to competitive positioning in the industry

5. Resource Based View
Resources are most important in getting and keeping competitive advantage
Value- resource used to exploit external circumstances
Rare-no competing firms possess resource
Hard to Imitate and Substitute- inability to duplicate
Ability to exploit

6. Guerrilla View Competitive advantage is temporary
Why? The environment is characterized by continual and often revolutionary changes.
Successful organizations must disrupt the current situation and surprise competitors with strategic actions designed to keep competitors off balance
Successful organizations create new competitive advantages based on how the context is changing

7. Drivers of Business Environment
The Information Revolution
Information has always been used in producing goods and services, to design work tools, organizational processed, management systems, and products, as organizations searched for ways to be more efficient and effective. Now, Information is the essential resource of production.

8. Drivers of Business Environment
Technology- using equipment, materials, knowledge, and experience to perform tasks.
Innovation- turning a creative idea into a product or process that can be used or sold
Developing, making, and marketing a product to generate revenue
Bottom-up Capability- mass collaboration capability
Internet, personal messaging systems, and social networking is shifting from industry to individual
Organizational Performance
Technology is a powerful tool to enhance the business, but not a replacement for understanding the economics of their business

9. Drivers of Business Environment
Globalization
Chapter 1 discussed how globalization and the global economy are impacting strategic management.
Transformed the business environment
Influences strategic management in two ways
Global Markets
Global Competitors

10. Implications of Driving Forces
Continual Change
External/Internal Conditions
Transitions in structure
Ex: Greeting Card-E Cards
Ex: Movie Rentals
Reduced Need for Physical Assets
Physical Assets=Power
Intangibles-information, people, ideas, & knowledge
Vanishing Distance & Compressed Time
No Geographical limitations
Instant Interactions- , video conferencing
Vulnerability
Open to viruses and threats

11. Critical Success Factors
Ability to Embrace Change
Need change agents
Initiates and oversees changes
Creativity & Innovation Capabilities
Ability to combine ideas in unique ways and make associations
Being a World Class Organization
Organizations make strategic decisions to become the best in the world at what it does.

12. Two Elements of Guidance
Organizational Vision and Mission
Vision
Broad picture of what the leaders of an organization want to become
They must:
Build on organizations core value and beliefs
Elaborate a purpose for organization
Brief summary of what the organization does
Specify broad goals
Mission
Statement of what units do and what they hope to accomplish
Corporate Social Responsibility and Ethics
Restates vision and mission to reflect commitment to CSR

13. Summary of Chapter 2 Perspectives of Competitive Advantage
Industrial Organization View, Resource Based View, Guerilla View
Drivers of Business Environment
Information, Technology, Globalization
Implications of Drivers
Continual Change
Critical Success Factors
Elements of Guidance