Strategy and Competitive
Advantages
Jeff Stambaugh
jeff.stambaugh@mwsu.edu
http://faculty.mwsu.edu/business/jeff.stambaugh
Built by Stambaugh/2009
Failing to plan is planning to fail!
Strategy Intro
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What great companies first come to mind?
What bad companies first come to mind?
And now the key question … what made the great
great and the bad bad?
Built by Stambaugh/2009
Failing to plan is planning to fail!
Strategy is …
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Ongoing processes of:
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Analysis (Chapters 2-4)
Decisions (Chapters 5-8)
Actions (Chapters 9-12)
To achieve a sustainable competitive advantage
(why some firms outperform others over time)
What is strategy to Porter?
Built by Stambaugh/2009
Failing to plan is planning to fail!
Strategy Attributes
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Directs organizations toward goals & objectives
Multiple “masters” (Stakeholders)
Short and long-term perspectives
Tradeoffs between effectiveness and efficiency
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Built by Stambaugh/2009
Ambidexterity: take care of the present AND position your
firm for the future
Failing to plan is planning to fail!
My Take on Strategic Process
Vision
Assess
Performance
Analysis
Implementation
(Action)
Built by Stambaugh/2009
Formulation
(Decision)
Failing to plan is planning to fail!
My Take on Strategic Process
Vision
Assess
Performance
Analysis
Implementation
(Action)
Built by Stambaugh/2009
Formulation
(Decision)
Failing to plan is planning to fail!
The Devil Wears Prada
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Roll the film
Analysis
Formulation
Implementation
Built by Stambaugh/2009
Failing to plan is planning to fail!
Last spring, Starbucks fired its CEO (Jim Donald) and
brought back the former CEO (Howard Schultz).
Starbuck’s stock price was down as the growth rate and
earnings were down this year, something Donald blamed
on the slowing economy and high coffee prices. Schultz
(who was still the Chairman of the Board) faulted
Starbuck’s strategy and thus fired Donald. Starbucks’
stock price rose 8% upon news of Donald’s firing.
According to the book this represents which view of
leadership
50%
1.
Romantic view of leadership
2. External view of leadership
50%
0 of 5
Strategy Can
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Built by Stambaugh/2009
Set firm direction
Focus effort and provide coordination
Define the organization
Provide consistency
Get you ready for unforeseen challenges
Failing to plan is planning to fail!
FIGURE 1.4
Stakeholder Groups
• Stakeholders: Individuals and groups with an interest in a firm’s
performance and an ability to influence its actions
• Firms & stakeholders need each other (Symbiosis)
• Dilemma—satisfying one stakeholder’s needs may come at
expense of another
• CSR and Triple Bottom Line (financial, social, and
environmental)
• Fortune Link
• Best Employers Link
• Yahoo Finance
Copyright 2006: Thomson Business and Professional Publishing. All Rights Reserved. From Hitt, et al Understanding Business Strategy
Strategic Coherence
Company vision
Mission statements
Strategic objectives
Hierarchy of Goals
Built by Stambaugh/2009
Failing to plan is planning to fail!
Do Vision / Mission Statements
Really Matter?
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How many of you know your company’s vision /
mission statement?
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Does that matter ?
What understanding the vision can do—the Men’s
Wearhouse example
Vision / Mission statements can make a difference,
especially in times of turmoil or as a compass!
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Built by Stambaugh/2009
Starbucks: Establish Starbucks as the premier purveyor of
the finest coffee in the world while maintaining our
uncompromising principles while we grow
Failing to plan is planning to fail!
Good “SMART” Objectives
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S – Specific
M – Measurable
A – Appropriate
R – Realistic
T – Time-bound
Built by Stambaugh/2009
Failing to plan is planning to fail!
Takeaways
 Strategy is a dynamic process seeking a sustainable
competitive advantage
 Strategy changes are inevitable
 Analysis—Formulation—Implementation
 Stakeholders: who matters and how much do they
matter
 Value of a direction and how to set good goals
Built by Stambaugh/2009
Failing to plan is planning to fail!
Next Class
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Read Chapter 2 & Andy Grove Excerpt
ST2 Due
Built by Stambaugh/2009
Failing to plan is planning to fail!