1 2 Scope of SM2 approaches to strategic management development1.Prescriptive strategy:objectives defined in advance;not responsive2.Emergent strategy:final objective is unclear,chaoticProcess of strategic management1.Select goala)Hierarchy of goalsCompany VisionMission StatementStrategic ObjectivesHierarchy of Goals2.Analysis:diagnosis (internal and external)a)External:PESTEL,Five Forcesb)Internal:VRIN/VRIO,Value chain3.Strategy Formulation:guiding policya)Corporate level strategy (where)b)Business level strategy (how)c)Function-level strategy (what)4.Implementation:a set of coherent actionsa)Organization structureb)Corporate governancec)Leadershipd)Resources and investmente)Strategic changef)Measurement and control systemg)M&A,allianceSustainable competitive advantage1.Definition:a firm's ability to create value over prolonged period of time in a waythat its rivals cannot2.2 typesa)Cost.Advantageb)Differentiation advantage3.Methoda)External:change PEST factors;Respond fast to changeb)Internal:VRIO resources;unique competencies;innovative capacitiesHow a firm can achievecompetitive advantage?changes.Changes in.Fim's ability to respondTwo basic types ofcompetitive advantage