Strategic Management: Competitiveness and Globalisation 7th ASIA Pacific Edition by Dallas Hanson So

competitors’ actions (Chapter 5).
• Setting corporate-level strategy, or deciding in which industries or businesses the
organisation will compete, how resources will be allocated, and how the different
business units will be managed (Chapter 6).
• The acquisition of business units and the restructuring of the organisation’s
portfolio of businesses (Chapter 7).
• Selecting appropriate international strategies that are consistent with the
organisation’s resources, capabilities and core competencies and external
opportunities (Chapter 8).
• Developing cooperative strategies with other organisations to gain competitive
advantage (Chapter 9).
The final section of the text, Chapters 10–13, examines actions necessary to effectively
implement strategies:
• Methods for governing to ensure satisfaction of stakeholder demands and
attainment of strategic outcomes (Chapter 10).
• Structures that are used and actions taken to control an organisation’s operations
(Chapter 11).
• Patterns of strategic leadership that are most appropriate given the competitive
environment (Chapter 12).
• Linkages among corporate entrepreneurship, innovation and strategic
competitiveness (Chapter 13).
Teaching Note: Students should realise that none of the chapters stands alone,
just as no single step or facet of the strategic management process stands alone.
If the strategic management process is to result in an organisation being
strategically competitive and earning above-average returns, all facets of the
process must be treated as both interdependent and interrelated.
2
Describe the competitive landscape and explain how
globalisation and technological changes shape it.
THE COMPETITIVE LANDSCAPE
The competitive landscape can be described as one in which the fundamental nature of
competition is changing in a number of the world’s industries. Further, the boundaries
of industries are becoming blurred and more difficult to define. This results in a volatile
business world, where organisations compete on a global scale, and need huge
investment with huge risk.
Consider changes that have taken place in the telecommunications and TV industries –
Chapter 1: Strategic management and strategic competitiveness 1-5
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e.g. not only cable companies and satellite networks compete for entertainment
revenue from television, but telecommunications companies also are stepping into the
entertainment business through significant improvements in fibre-optics.
The twenty-first century competitive landscape thus implies that traditional sources of
competitive advantage – economies of scale and large advertising budgets – may not be
as important in the future as they were in the past. The rapid and unpredictable
technological change that characterises this new competitive landscape implies that
managers must adopt new ways of thinking. The new competitive mind-set must value
flexibility, speed, innovation, integration and the challenges that evolve from constantly
changing conditions.
A term often used to describe the new realities of competition is hyper-competition, a
condition where competitors engage in intense rivalry, markets change quickly and
often, and entry barriers are low. This results from the dynamics of strategic moves and
countermoves among innovative, global organisations: a condition of rapidly escalating
competition that is based on price-quality positioning, efforts to create new know-how
and achieve first-mover advantage, and battles to protect or to invade established
product or geographic markets (discussed in more detail in Chapter 5).
The global economy
Global economy is where goods, services, people, skills and ideas move freely across
geographic borders.
The emergence of the global economy results in several challenges. For instance, it is
under pressure due to trade tensions, inequality, geopolitical uncertainty and most
recently the COVID 19 pandemic. At the same time, there are many opportunities:
Europe, for example, is now one of the world’s largest markets, with 700 million
potential customers (despite the difficulties of adapting to multiple national cultures).
Today, China and India are seen as extremely competitive markets in which local
market-seeking MNCs (multinational corporations) fiercely compete against other MNCs
and local low-cost producers. China has long been viewed as a low-cost producer of