First, op?rations. And last ar? th? actions

First, th? strat?gic manag?m?nt of an organization ?ntailsthr?? ongoing proc?ss?s: analysis, d?cisions and actions. That is, strat?gicmanag?m?nt is conc?rn?d with th? analysis of strat?gic goals (vision, mission,and strat?gic obj?ctiv?s) along with th? analysis of th? int?rnal and ?xt?rnal ?nvironm?ntof th? organization. N?xt, l?ad?rs must mak? strat?gic d?cisions. Th?s? d?cisions,broadly sp?aking, addr?ss two basic qu?stions: What industri?s should w? comp?t?in? How should w? comp?t? in thos? industri?s? Th?s? qu?stions also oft?ninvolv? an organization’s dom?stic as w?ll as its int?rnational op?rations. Andlast ar? th? actions that must b? tak?n.

D?cisions ar? of littl? us?, of cours?,unl?ss th?y ar? act?d on. Firms must tak? th? n?c?ssary actions to impl?m?nt th?irstrat?gi?s. This r?quir?s l?ad?rs to allocat? th? n?c?ssary r?sourc?s and to d?signth? organization to bring th? int?nd?d strat?gi?s to r?ality. As w? will s?? inth? n?xt s?ction, this is an ongoing, ?volving proc?ss that r?quir?s a gr?at d?alof int?raction among th?s? thr?? proc?ss?s.S?cond, th? ?ss?nc? of strat?gic manag?m?nt is th? study ofwhy som? firms outp?rform oth?rs. Thus, manag?rs n??d to d?t?rmin? how a firmis to comp?t? so that it can obtain advantag?s that ar? sustainabl? ov?r a l?ngthyp?riod of tim?. That m?ans focusing on two fundam?ntal qu?stions: How should w?comp?t? in ord?r to cr?at? comp?titiv? advantag?s in th? mark?tplac?? For ?xampl?,manag?rs n??d to d?t?rmin? if th? firm should position its?lf as th? low-costproduc?r, or d?v?lop products and s?rvic?s that ar? uniqu? which will ?nabl? th?firm to charg? pr?mium pric?s-or som? combination of both. Manag?rs must alsoask how to mak? such advantag?s sustainabl?, inst?ad of highly t?mporary, in th?mark?tplac?.

That is: How can w? cr?at? comp?titiv? advantag?s in th? mark?tplac?that ar? not only uniqu? and valuabl? but also difficult for comp?titors tocopy or substitut?? Id?as that work ar? almost always copi?d by rivals imm?diat?ly.In th? 1980s, Am?rican Airlin?s tri?d to ?stablish a comp?titiv? advantag? byintroducing th? fr?qu?nt fly?r program. Within w??ks, all th? airlin?s did th?sam? thing. Ov?rnight, inst?ad of comp?titiv? advantag?,fr?qu?nt fly?r programs b?cam? a n?c?ssary tool for comp?titiv?parity, not comp?titiv? advantag?. Th? chall?ng?, th?r?for?, is to cr?at? comp?titiv?advantag? that is sustainabl?. Micha?l Port?r argu?s that sustainabl? comp?titiv?advantag? cannot b? achi?v?d through op?rational ?ff?ctiv?n?ss alon?.

Most ofth? popular manag?m?nt innovations of th? last two d?cad?s-total quality,just-in-tim?, b?nchmarking, busin?ss proc?ss r??ngin??ring, outsourcing all ar?about op?rational ?ff?ctiv?n?ss. Op?rational ?ff?ctiv?n?ss m?ans p?rformingsimilar activiti?s b?tt?r than rivals. ?ach of th?s? is important, but non? l?adto sustainabl? comp?titiv? advantag?, for th? simpl? r?ason that ?v?ryon? isdoing th?m.

Strat?gy is all about b?ing diff?r?nt from ?v?ryon? ?ls?.Sustainabl? comp?titiv? advantag? is possibl? only through p?rforming diff?r?ntactiviti?s from rivals or p?rforming similar activiti?s in diff?r?nt ways.Compani?s such as Wal-Mart, Southw?st Airlin?s, and IK?A hav?d?v?lop?d uniqu?, int?rnally consist?nt, and difficult to imitat? activity syst?msthat hav? provid?d th?m with sustain?d comp?titiv? advantag?. A company with agood strat?gy must mak? cl?ar choic?s about what it wants to accomplish.

Tryingto do ?v?rything that your rivals do ?v?ntually l?ads to mutually d?structiv?pric? comp?tition, not long-t?rm advantag?.

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