Strategic Management Concepts

Sources of Attaining Competitive Advantage by a Business Firm

When a firm sustains profits that exceed the average for its industry, the firm is said to possess a competitive advantage over its rivals. A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. Competitive advantages are capabilities that are difficult to replicate or imitate and are non-tradable.

Pitts and Snow define a competitive advantage as “any feature of a business firm that enables it to earn a high return on investment despite counter pressure from competitors.”

A competitive advantage exists when the firm is able to deliver the same benefits as the competitors are but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage).… Read the rest

Abey Francis

The 10-P Framework of Global Strategic Management

The 10-P framework for globalization symbolizes the aspirations and needs of employees and organizations in the new competitive settings. It comes a long way from the initial impetus provided to the subject by Michael Porter in his book Competitive Strategy (1980), and goes beyond his purely industrial organization perspective. The framework operationalizes the 4-Diamonds for a nation’s competitive advantage of Porter. The 10-P framework integrates theory of strategic management and practice of business policy and provides a structure for the practicing manager to evaluate competitiveness at regular intervals.

The 10-P framework explores a fine `fit’ between the soft and hard strategic choices.… Read the rest

Abey Francis

Mintzberg’s Model of Organizational Structure

Management expert Henry Mintzberg  proposed that traditionally organizations (profit making or not for profit) can be divided into five components. In practice organizational structure may differ from proposed model. Factors influencing organizational structure are industry norms,   size, experience, culture, external forces (competition, inflation, minimum wage legislation etc). Components identified by Mintzberg is useful for understanding the workflow of organizations.

The structure of an organization can be defined simply as the sum total of the ways in which it divides its labor into distinct tasks and then achieves coordination among them” –  The Structuring of Organizations,  Henry Mintzberg.

1. Strategic Apex

Strategic   apex is the most senior level in the organization.… Read the rest

Abey Francis

PEST Analysis – External Business Environment Analysis

A PEST analysis is a way to analyze the general external environment of an organization. Every organization has an external environment. The external environment is quite important because it is the environment in which a company operates. PEST analysis is a useful tool for understanding the “big picture” of the environment in which industry is operating, and environmental understanding will bring the advantage of the opportunities and guide to minimize the threats. PEST components are Political, Economic, Social and Technological.

The PEST analysis is used to identify forces in the macro-environment that are affecting the business at present and are likely to continue to affect the business in the future.… Read the rest

Abey Francis