Strategic Management

Strategic management is to manage an organization’s strategy. In this course, we mostly rely on business organizations for illustrations, but the strategic management concepts can also be applied to non-profit organizations.
What is a strategy?
The textbook defines a strategy as “an integrated and coordinated set of commitments and actions designed to exploit core competences and gain a competitive advantage” (Hitt, Ireland, & Hoskisson, 2017).
Is this definition consistent with what you know? If you were to define the term, how would you describe an organization’s strategy differently? Provide an example of an organization’s planning and action that illustrates your definition of the strategic management.
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“A firm has a competitive advantage when it implements a strategy that creates superior value for customers and that competitors are unable to duplicate or find it too costly to try to imitate” (Hitt et al., 2017, p.4). A company can make sure that it has a competitive advantage when the competitors fails to imitate the company’s strategy and generate an above-average return. “Above-average returns are returns in excess of what an investor expects to earn from other investments with a similar amount of risks” (Hitt et al., 2017, p.4).
The above definition of competitive advantage suggests a very number-driven approach to understand the company’s success in its strategy. What are the financial indicators of a company’s success? You may want to review your notes in your finance and accounting classes about various financial indicators when you proceed in this course.
Reference textbook (Hitt et al,, 2017) for 1) Profitability ratios; 2) liquidity ratios; 3) leverage ratios; 4) activity ratios; 5) shareholder return ratios, in Part 4: Case Studies, page C-11, 12.
As a local sandwich shop owner, which ratios should you monitor closely on a weekly or monthly basis? Why?
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Alternatively, the stakeholder approach suggests that a firm’s success depends on effectively managing the relationships with all stakeholders. Stakeholders’ “claims on a firm’s performance are enforced through the stakeholder’s ability to withhold participation essential to the organization’s survival, competitiveness, and profitability” (Hitt et al., 2017, p. 21). Refer to Figure 1.4 for a classification of major stakeholder groups, including capital market stakeholders, product market stakeholders, and organizational stakeholders.
Following the stakeholder approach, a successful firm will have a clear vision and mission statements which “inform stakeholders of what the firm is, what it seeks to accomplish, and who it seeks to serve” (Hitt et al., 2017, p. 18).
What does your vision and mission of a successful sandwich shop look like in Tampa Bay area? Who are your major stakeholders? As a sandwich shop owner, what can you do to satisfy various stakeholders’ demands?