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Strategic Management - Module 2 Part 3

This document outlines the topics to be covered in Module 2 of a strategic management course on competitive advantage. The module will cover external environment analysis tools like PESTEL, SWOT, Porter's Five Forces. It will discuss classifying a firm's external environment and analyzing the competitive profile matrix. Later parts will cover value chain analysis, core competencies, building competitive advantage and sustaining it. The document provides the outline, learning objectives and references for each of the 5 parts that make up this module on competitive advantage.

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67 views31 pages

Strategic Management - Module 2 Part 3

This document outlines the topics to be covered in Module 2 of a strategic management course on competitive advantage. The module will cover external environment analysis tools like PESTEL, SWOT, Porter's Five Forces. It will discuss classifying a firm's external environment and analyzing the competitive profile matrix. Later parts will cover value chain analysis, core competencies, building competitive advantage and sustaining it. The document provides the outline, learning objectives and references for each of the 5 parts that make up this module on competitive advantage.

Uploaded by

hrbull
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Strategic Management

Major Bhargava R D
Executive Director
XHire HR Consulting LLP
Bangalore
Strategic Management
Module 2
COMPETITIVE ADVANTAGE (12 HOURS)
 External Environment
 PESTEL Analysis,
 SWOT Analysis,
 Porter’s Five Forces Model,
 The Competitive Profile Matrix (CPM),
 Globalization and Industry Structure – Resources,
Capabilities and Competencies
 Value Chain Analysis – Core Competencies, Generic
Building Blocks of Competitive Advantage
 Distinctive Competencies - Avoiding Failures and
Sustaining Competitive Advantage
Classification of
External Environment
 A firm’s External Environment can be divided into
Three parts: Operational
Environment

– Operating Environment Industry


Environment
(Competitive Position) Global/Remote
Environment
– Industry Environment
(Competitive Forces)
– Global/Local Environment
(Remote)
 A firm’s strategic actions are influenced by the
changes taking place in all the three environments.
Strategic Management
Module 2
COMPETITIVE ADVANTAGE
Part III
 Competitive Profile Matrix (CPM)
 Globalisation & Industry Structure
 Resources, Capabilities and
Competences
The Competitive Profile Matrix
(CPM)
 Operating Environment
– Factors in the immediate Competitive Situation that
affect a firm's success in acquiring needed
resources or in profitability marketing its goods and
services
 Most Important factors are:
– The Firm’s Competitive Position
– Its Customer Profile
– Reputation among Suppliers and Creditors
– Ability to Attract Capable Employees
Competitive Profile Matrix
(CPM)
 Competitive Profile Matrix

– is an essential strategic management


tool used to compare one firm with
other major players in the industry.

– identifies a firm’s major competitors


and its particular strengths and
weaknesses.

7
Components of CPM
 Critical Success Factors
– are extracted after deep analysis of external
and internal environment of the firm.
– can vary from industry to industry.

8
Components of CPM contd…
 Ratings
– represent the response of firm towards the
critical success factors.
– higher the rating, better is the response of the
firm towards the critical success factor.
– ratings range from 1 to 4 and can be applied
to any factor.
– 4 = major strength 3 = minor strength
2 = minor weakness 1 = major weakness

9
Components of CPM contd…

 Weight
– indicates the relative importance of a factor
to being successful in the firm’s industry.
– 0 carries the least importance while 1 carries
the maximum.
– sum of all assigned weight to factors must
be equal to 1.

10
Components of CPM contd…
 Weighted Score
– is the result achieved after multiplying each
factor rating with the weight.

 Total Weighted Score


– the sum of all weighted score is equal to the
total weighted score.
– final value of total weighted score should be
between range 1.0 (low) to 4.0(high).

11
Competitive Profile Matrix

12
Key findings

 Overall, Company 1 is strongest, as


indicated by the total weighted score of
3.15, followed by Company 3.

 CPM shows how strong or weak a


company is compared to its competitors
on the basis of common factors.

13
References
 http://www.mba-tutorials.com

 http://www.soopertutorials.com

 Strategic Management – Concepts and


Cases (11th edition)
– Fred David

14
Competitive Position
Globalization and Industry Structure
Resources, Capabilities and Competencies
END OF PART III

?
Next Session

 Value Chain Analysis


 Core Competencies
End of Session
Thank You!

18-11-2018 20
Strategic Management
Module 2
COMPETITIVE ADVANTAGE
Part IV
 Value Chain Analysis (VCA)
 Core Competencies
Value Chain Analysis
Core Competencies
END OF PART IV

?
Next Session
 Generic Building Blocks of Competitive
Advantage
 Distinctive Competencies
 Avoiding Failures & Sustaining Competitive
Advantage
End of Session
Thank You!

18-11-2018 26
Strategic Management
Module 2
COMPETITIVE ADVANTAGE
Part V
 Generic Building Blocks of Competitive
Advantage
 Distinctive Competencies
 Avoiding Failures & Sustaining
Competitive Advantage
Generic Building Blocks of
Competitive Advantage
Distinctive Competencies –
Avoiding Failures and Sustaining
Competitive Advantage

29
END OF PART V

?
End of Session
Thank You!

18-11-2018 31

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