MGMT 386 Lecture Notes - Lecture 6: S.M.A.R.T.
A firm's theory about how to gain competitive advantage ; "Action pan of how you're going to achieve
and a time-frame"
What is a competitive advantage?
The ability to create more economic value than rival firms
What is the process we use to create competitive advantage?
Strategic Management Process
Strategic Management Process
Mission -> Objectives -> External and Internal Analysis -> Strategic Choice -> Strategy implementation ->
Competitive Advantage
What is an objective?
Objectives reflect specific measurable targets a firm can use to evaluate the extent to which it is
realizing its mission
What must an objective be?
S.M.A.R.T
SMART OBJECTIVE
Specific, Measurable, Appropriate, Realistic, Timely
Accounting Measures
Measure of it ; calculated by using information from a firm's published profit, loss, and balance sheet
statements
Economic Measures
Compare firm's level of return to its cost of capital instead of to the average level of return in the
industry.
Economic Value
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The difference between the perceived customer benefits associated w/ buying a firm's product or
service and the cost producing and selling these products or services.
Corporate Strategy
Competing in multiple markets
Business Strategy
Competing in a single market or industry simultaneously
How is economic value calculated?
Examining accounting and economic performance.
Emergent Strategy
Strategy that emerges over time or that has been radically reshaped once implemented.
Intended Strategy
Strategy a firm thought that it was going to pursue.
Broad Environment
DEPICT
DEPICT
Demographic Trends
Economic Climate
Political (and Legal) Condition
International Events
Cultural Trends
Technological Changes
Specific Industry
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