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SMT - Introduction - Coggle Diagram
SMT - Introduction
SMT Process
(1) Mission
Firm long-term purpose
What to avoid in the meantime
(2) Objective
Specific + measurable targets:
Things a firm needs to do → Achieve its mission
(3) External + Internal Analysis
External Analysis
(Opportunities + Threats): i/r, demographics, social trends, technology
Internal Analysis
(Strengths + Weaknesses): HR, manufacturing abilities, tech
(4) Strategic choice
Business Strategies
Cost leadership
Product differentiation
Corporate Strategies
Vertical Integration
Strategic Alliances
Diversification
Mergers and Acquisitions (M&As)
(5) Strategy Implementation
Who
will do
What
Organizational structure & control (
Who
report to
Whom
)
Compensation policies (How firm hire, promote, pay,...)
(6) Competitive Advantage
Def:
Create more economic value than competitors
2 types
Preference for Firm’s Output
Cost Advantage
Temporary Adv
Competitors quickly imitate
Short-lived in most cases
Competitive Parity
Firm’s offerings are average
No customer preference/cost advantage
Competitive Disadvantage
Measuring Competitive Advantage
Sustainable Adv
Difficult to imitate
Can last longer
Definition
Sequential set of analyses and choices
help firms choose strategies, create
competitive advantages
Emergent vs Intended Strategies
Strategic managers
Cognitive biases & Strategic decision making