Pages: 16

This chapter discusses the changes taking place in the market, which are prompted by different political issues. A relatively long period of time is covered and both micro and macro aspects are taken into consideration. This chapter opens up with a brief overview of the evolution of economic thought starting from Alfred Marshall and moves on to discuss the new economic paradigms, i.e. the question of using a host of conceptual techniques and tools without achieving any profit. In addition, the term purpose is extensively described both in academic and in terms of a company, and an association is established between purpose and the success of an organisation. In the end, it is concluded that multinational companies, in particular, do not show any signs of introducing any changes despite clear empirical evidence suggesting the other option, and a variety of questions are posed, such as “How can it be explained that microeconomic analysis knows only two ways in which individual participants play a strategy game at the branch level?” and “Who is more important, shareholders or people/consumers?”

Pages: 19

The paradoxical foundation of strategic management, i.e. the need to choose both stability and instability in strategic management is discussed at the beginning. The theoretical framework of strategic management is established and Charles Handy's paradoxes are elaborated to explain the complexity of the very definition of strategic management. The importance of information technology is stressed and a distinction is made between the so-called Porter's powers and contemporary powers. Further, the importance of Michael Porter's work, his role in the development of the new paradigm and the importance of surrounding are particularly highlighted. Porter's theoretical ground for opening up new paths in strategic management is deeply explored, too. In addition, this chapter includes a summary of the criticism of Porter's work, dividing the critics into three separate groups, based on their view on differentiation and overall cost leadership, portfolio concept and shaping of business strategy.

Pages: 18

This chapter focuses on the importance of competitive advantage and the means and tools used to achieve and sustain competitive advantage. Ansoff's, Porter's and Drucker's definitions and classification are quoted to denote different types of competitive advantage and its long-term effect on the corporation and its surrounding. Business strategy and operational effectiveness are defined and their role in competitive advantage is discussed. The importance of strategic positioning is particularly accentuated, listing and elaborating on different approaches to strategic positioning. Economic and social benefits of competitive advantage are explained in detail and visually represented by charts and graphs. Both the external (structural) and internal-oriented approach (resource) is explained and contrasted and a detailed list of their advantages and disadvantages is provided.

Pages: 29

This chapter focuses on the analysis of the competitive forces in an environment of a specific industry. The role of Internet in creating competitive advantage is explained, including its disadvantages. The three constructs of the strategic analysis are explored: Industry analysis, strategic group analysis and competition analysis from the perspective of the environment. Each construct is further divided and explained, stressing its role and long-term effects. The concept of five different forces is presented and its influence on profit is explained, discussing each different construct individually.

Pages: 32

The strategic analysis of a corporation is explained through two basic approaches: The contemporary and the conventional approach. Different steps, procedures and classifications are provided to explain concepts such as buyer value, creating competitive advantage, identifying differences among corporations and defining business units. The correlation of strategic business units is particularly explored through seven steps, accompanied by respective charts and figures. Each of the three constructs of strategic corporation analysis (value chain analysis, strategic activities analysis and the analysis of the competitors from the corporation perspective) is defined and thoroughly explained. Porter's arguments are reinforced by figures from other prominent authors. Both overall low costs and differentiation, recognised as two main sources of competitive advantage, are defined and explored in detail. The manner of creation and drivers for both sources are listed and discussed.

Pages: 44

The chapter opens up with a discussion concerning the interaction between a corporation and the environment, i.e. whether the corporation can or cannot adapt to its environment. Porter's processes for creating environmental scenarios are given and the manner of interaction between the corporation and the environment is explored with a focus on the three main players (the 3C) in the strategic triangle. Strategic contemplation concerning both the environment and the corporation is recognised as a driver leading to the formation of business strategy. Generic strategies are classified, compared and contrasted and reinforced by practical examples showcasing their advantages and pitfalls. Finally, this chapter explores the action and the planning component of competitive strategy. Competitive strategy is classified into overall cost leadership, differentiation and focus and each item is discussed with parts exploring the sustainability of each generic strategy.

Pages: 15

This chapter explores the consequences of growing irresponsible behaviour of corporations. Carnegie's principles of charity and custody are elaborated. In addition, the reasons for and reason against managerial involvement in social activities are listed and discussed. A brief overview of the evolution of the social responsibility concept is provided, as well as different levels of corporative responsibility. The four levels of green shades of management are introduced and discussed. Further, this chapter offers recommendations for corporations for establishing good environmental practices. Finally, Porter's modified matrix of corporal strategies for achieving competitive advantage is presented and discussed.