Sere UC Urea and Strategic Peey yeh ted Se ee ne ae a aes renee e td pret eee) pone reneeey fo a PLStrategic competitiveness Surcrshaly ormadstes arc Irmplements vue esting staeegy ‘A atrategy ss irensates ane rotated seo! degre euplat core ‘competences snd gana ‘ampetive advantage ‘hfe has competitive sdvamtage epimers a satay that creates super aie fercastoners ays at ‘ompebters are unable to ‘duplicator Find it toa coaly 5 we see from the Opening Case, Alibaba ts highly successful because ts strategy tn China has allowed it to have a massive impact in regard to online sales in a large emerging economy. Its now seeking to grow globally and gain widespread namebrand recognition through its 2014 TPO in New York. These attributes have enhanced ts abil- {ty to compete in global online markets. Therefore, we can conclude that Alibaba has achieved strategic competitiveness It clearly has been able to earn above-average returns, at least, domestically. Yet Altbaba has received its share of criticism because of its per- 1H ute Render -Stegc Management: Concept ond Cares ‘Ses arene10 eet ear Srategc Management: Concept and Cares ate |W) ee € >1H ute Render -Stegc Management: Concept ond Cares Se ees at pn ad Sap ea Sin atc ge age lng Sr incre th hr 154 clastatons of stakeholders tater tggen ot for pa be font mrt xe (eh omer chem ttn bs ma ee rey Se et soo | A | OO € >o 1H ute Render -Stegc Management: Concept ond Careso Mw 1 afi Render -Sategic Management: Concept and Cas1H ute Render -Stegc Management: Concept ond Cares1H ute Render -Stegc Management: Concept ond Cares a ontents Notes & Bookmatks ook 4 oO SSA per er eee say Sess pope ape1H ute Render -Stegc Management: Concept ond Cares - 9 x a ontents Notes & Bookmatks ook 4 oO 17 The Strategic Management Process set nioo.¢e >1H ute Render -Stegc Management: Concept ond CaresSUMMARY © Firma ute the strategic management process to achieve sr: tege competrtiveness and earn above-average retuns Fre cnalyze the extemal emranmtent and thet internal gan 2aion then formulate and implement a snategy to achieve 3 desired lve! of performance (SP). Performance is reflected ‘by the fis evel of strategie competitiveness and the extent tovhich earns above-average returns Stategic eampetitine ess it achieved when a fem develops ancl implements 3 ‘value-ceating strategy. Abowe-average returns (mencast of what investors expect to eam from other investmerss with similar levels of isk) provide the foundation needed to simultaneously sai all ofa eri stakeholders. ‘The fundamental nature of competion i diferent in the current competitive landscape. Asa eau, thote mating stratege decisions mart adopt a diferent mind-set, one thet allow: them to learn hw to compete in highly turbulent and chaatic environments that produte a grest desl of uncertainty. ‘The glablation of industries ad thes market lang wth ‘apie and significant technological changes are the two primary factors contributing tothe turbulence of the competitive landicape, Firma use two majar model to help deveiop their ition and mission when choosing one or more strategie in pursuit of strategiccompetitveness and above average returns The cate assumption of the UO medal that the fri external an renment ha. lage influence on the choice of trateges more than do the fe internal resources, capabilties, and core corn- petences Thus the VO models used to understand the effects nindustry’sCharctvatcs can have ana firm when deciding what strategy or strategies to use in competing against ral ‘Te logic supporting the YO model suqgests that above ‘average returns ae earned when the frm locates am attractive ‘ncusty x part of an industry and succesfully mphements the strategy dictated by that ndusty/s characteristics The core assumption ofthe resource-based modelis thatthe firs ‘unique resources, capabilities, and core competencies have re of aninfluence er selecting are wrg strategies than does the Firs extemal ervronment Above average returns ae earned when the frm uns its valuable, rare, costipto- imstate, and pon-subsinutable resources and capabilities to KEY TERMS above-average returns mene competitive advantage 4 core competencies 16 eaeDaferts ad ever gna oma a aan a ae compete agai it Fiala one or more industnes Evidence indicates that both models yield insights that are inked to sac- cessful electing and using strategies. Ths, fms want to use ther unique resources capabilities, and core competencies at ‘the foundation to engage in cne of more strategies that sow ‘them ta effectively compete against ral in their inary, © Vision and mission ae fred to guide the relection of strategies Based on the information fom the anaiyses of the ‘ir’ interna organization and extemal envionment. Vion ‘sa picture of what the fern wants to be and, in broad terms, what it wants to utimately achieve. Rowing fem the vision, ‘the mission specifies the business oe businesses in which the ‘ir intends to compete and the customers itintends ta serve, Vision and mission provide drecton tothe firm and signal Important descriptive information to stakeholders. Stakeholders re tose whe can afc and ae acted by, aes perfomance Because a frm a dependent on the Cortnang supper of akcholders harold, castor suppliers eraployees, hort communis, ec they have enferceable son the compan performance. When ea ing above average returns. afr general has the resoures ‘needs to atisy te interests of al akoiers Homes, when eating only sveage tars te frm rust caretly ‘manages stakeholders order to retan thei support A fem caring below average reture must minimize the ameunt of support lses from unsaid stakehoiers Strategic leaders are people located in diferent areas and level ofthe firm using the strategic management process to help the fer achieve its vision and Fula mission In general (CEOs are responsible for making certain that their fr prop- cy use the strategie management proces The effectiveness ofthe strategic management process isincreased when itis ‘grounded in ethical intentions and behaviors. The strategie leader workdemands decision trade-offs, often amang tractive akernatives Its impertart for ll strategic leaders, expecially the CEO and other members af he top management ‘team. to conduct thorough analyses of conditions facing the fir, be bratally and consistently hanes, and wark joy to ‘select and impleenent the comect strategies Faadvantage above-average returns, and the strategic manage- ‘ment process? 2 What are the characteristics ofthe current competitive lane scape? What two factor are the primary ceiver of ths andacape? 2 According tothe VO made, what shoulda frm do to exm above-average returns? “4. Wit does the resource-based madel suggest fir should. do tearm above-average returns? Competition in the Airlines Industry For many years, the airline industry was highly regulated Which resulted in most airlines acting like each other by definition, However, the simtlaritbes among the large air- line compantes remained aftr the industry was partial aeceatsl alps foe ae mia tm services, routes, and performance-have persisted even to the present time. For aurlines often offer & new service (e.g, WI-FE availability on fights), but these services are easly imitated, therefore, any differentiation tm offerings ts only temporary. {In recent times, consolidation has occurred tn both and US. atrtne industries. In particular, poor performance led US. Atr and America West to merge. Additionally, much for the same reasons, Northwest Airlines and Delta Atrlines merged. Likewise United Ariines and Continental merged to create the largest airline inthe industry. More recently, American Aires and US. Air have been approved to merge. Much of the consolidation was approved because several of the aurlines went through bankruptcy proceedings (e.g, |= What are vision and mission? What is thei value forthe strate- gic management process? 46 (What ae stakeholders? How do the three primary stakeholder groups irfluence xganizations? 2. How would you describe the work of strategic leaders? | Wht are the elements ofthe statege management proces? How ae bey etereatec before their merger). All of these mergers, however, have not created highly differentiated services (or prices). All ‘of airlines largely provice the same type of services, and prices do not differ greatly among the large full-service” carriers. In fact, it seems that the primary isin trying to make fewer mistakes. In fact, industry statis- tics that report positive accounts, announce such out- ‘comes asa reduction in lost bags, fewer cancellations of flights, and fewer delays, What this suggests ts that all of these areas still kely represent major problem areas. It seems pretty bad when the most positive statement ‘one can make i that fewer bags have been lost tn recent fumes. profits have Deen up more recently, ts 1s primarily due to lower fuel costs and stronger demand because the economy is growing, something that is not controlled by those in change of the strategy Obviously, there are differences between atr- lines across time. United, the largest airline, merged ‘with Continental to create more financial efficien- ‘les and to afer greater travel options to customers,