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Running Head: Strategic Leadership 1

Strategic Leadership 6

STRATEGIC LEADERSHIP

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1. Define competitive advantage and its relationship with business model

Competitive advantage is the state where a particular company has better capability to earn profit and profit growth than its competitors in the same market for similar group of customers in a certain industry. Management level utilizes business models to develop strategies the operation of the company hence creating competitive advantage over the rivals and make greater profits.

2. Strategic planning model

Strategic planning model refers to how a company takes its own strategy and develop a plan to execute in order to improve operations and effectively meet the goals of the organization. In order to identify the best model for a company, it has to determine what it want to achieve. Once it has a clearly defines target, it is easy to work backward to determine how to get there. During the process of decision making, there are various stakeholders involved to ensure the model is effective. It involves senior managers of the company as well as key employees. they significantly contribute to promote a long-term planning for the company.

3. SWOT analysis

SWOT analysis refers to business analysis process the help in ensuring that all the objectives of a particular project are met and all factors involved to the project are clearly identified. It involves factors such as strengths, weaknesses, opportunities and threats. It helps in looking ate the external and internal factors that affect a business. This type of analysis is crucial for strategic and brainstorming planning in order for the company to decide on how it should take advantage of new opportunities, implement new technologies, deal with changes to the operations of competitors and respond to new trends. An example of how SWOT helped Nokia identify a threat. Nokia phones once dominated market for phones. However, it the company failed to determine threats from new phone manufacturers and the company faced serious strike. This made the company almost disappear until recently.

4. Levels of management

There are several levels of management. the first level is the corporate-level managers who monitors and controls all the strategies of the company hence making sure that they are consistent with the expected profit. The other level is Business-level managers who are responsible for operation in business units as well focusing specific strategies for certain business. The last level functional-level managers who focuses on particular functions and develop strategies utilized in achieving goals outlined in the two levels above.

Chapter 2

1. Industry, business and sector

An industry is a series of companies operating in the same business sphere or the categorization is very narrow. A sector is a part of economy where large number of companies are largely categorized are largely in comparison. Lastly, a business refers to an organization or an entity involved in industrial, professional or commercial activities.

2. Significance of Porter’s five-forces model in decision making

It is designed to aid organizations in evaluating the competitive forces at hand in a particular industry and engage in strategic planning. This help in determining the weaknesses and strengths of the company hence enabling the organization determine the structure of industry and implement the best strategy models. This help companies boost their profits as well as monitor changes that might need the company to adjust its business strategy.

3. How bargaining Power of Buyers, risk of entry and industry competitions affect external threats of a company.

The risk of entry by potential rivals is a threat since they are companies that are not competing currently but have the potential. Some of the factors that will affect are such as brand identity, cost advantages and economies of scale. Such factors are favorable for the potential rivals than they could easily weaken positions developed by establishes companies. For instance, Amazon prime transforming to digital TV is significant threat to Netflix.

Bargaining power is another factor that affect the external threat of a company since powerful buyers are a major risk to businesses. Buyers tend to use bargaining power especially when they have choices to buy from, incase there are other similar businesses in the industry, the threat increases which can cause loss of customers. Factors that affects bargaining power are such as their cost of switching and number of buyers. For instance, as a result of online companies in hype in industry, stores like Kohl sans Warmat are now matching their prices with that of online. Substitute products is a threat since there are several products or industries that can satisfy the needs of the customers. This is a threat to businesses since in increases competition and increasing prices of such products can be limited due to substitute competitors.

4. Industry life cycle, strategic group and mobility barriers

Stages in industry life cycle involves, introduction, growth, maturity and decline. Introduction stage is where the sales starts slowly. In growth stage, the sales begin to take off faster. At maturity, the sales are now constant and begin to gradually decline. A strategic group refers to a group of organizations in the same industry that have similar strategies such as business models. On the other hand, mobility barriers are those that prevent organizations from transiting from a strategies group to the other. This can help an organization to avoid low performing groups and adopt higher performing ones.

References

Hill, C. W., Schilling, M. A., & Jones, G. R. (2016). Strategic management: Theory & cases: An integrated approach. Cengage Learning.