Najmuddin Somadi

Rany Komala Dewi

 $600.000.000
(In 90 days)

130.000.000
(In 30 days)

More widely used than

500.000.000
(In 90 days)
Defining Strategy
“A firm’s strategy is defined as its theory
about how to gain competitive
advantages” (Barney & Hesterly, 2019)

“Each of these theories is based on a set

of assumptions and hypotheses about
the way competition in an industry is
likely to evolve and how that evolution
can be exploited to earn a profit” (Barney
& Hesterly, 2019)
The Strategic Management Process
“The strategic management process is
a sequential set of analysis and choices that can increases
the likelihood that a firm will choose a good strategy;
that is, a strategy that generates competitive advantages”
(Barney & Hesterly, 2019)

Figure: The Strategic Management Process

 The Strategic Management Process

External Strategic Choices

Analysis Competitive
Business Strategies:
Threats Advantage
Cost Leadership Strategy
Mission Opportunities
Product Differentiation Implementation Disadvantage
Objectives
Impact: Negative
Temporary
None Measurable Corporate Strategies: Org Structure Sustained
Positive Specific Control Processes Parity
Vertical Integration
Negative Compensation
Internal Strategic Alliances Advantage
Policy
Analysis Diversification Temporary
Strengths Sustained
Mergers and
Weaknesses
Acquisitions
 Measuring Competitive Advantage

“Economic value is the difference

between what customer are willing
to pay for a firm’s product or service
and the full cost of producing and
selling these product or service”
(Barney & Hesterly, 2019)
Accounting Measures

“using information from

a firm’s published profit
and loss and balance
sheet statement”
 measure profit as financial flexibility,
numerator with firm size including ability to
and asset as demoninator obtain more debt

Profitability Leverage
ratio ratio

Liquidity Activity
ratio ratio

ability of a firm to
meet its short-term focus on the level of
financial obligation activity in business
Economic Measures

compare a firm’s level of return

to its cost of capital instead of
the average level of return in
the industry
 Debt Equity

Source of capital from

Source of capital from bank
individual or institution
and bondholder
Competitive Above Average Above Normal
Advantage Accounting Performance Economic Performance

Competitive Average Normal

Parity Accounting Performance Economic Performance

Competitive Below Average Below Normal

Disadvantage Accounting Performance Economic Performance
 Plan a strategy for
a long period of time

Development or formulation
of strategies based on the situation
or fails to implement the strategic
managemnet process
# PA S T I A D A J A L A N
 it can help in Once you have a job,
deciding where to it can help you to be
work successful in that job

If you have a job in a small or

entrepreneurial firm, you may
become involved in strategy and the
strategic management process from
the very beginning