I need to paraphrase the answers in the attached paper

1. Strategy has varied meanings and definitions; however, in strategic management is defined as a set of actions, which they help the company be competitive and gain advantages. For instance, a strategy can differ from its competitors that do the same business. Strategic management has several aspects such as evaluation of strategies, analysis of a business environment and setting objectives for the company’s management.

2. Strategic competitive is being defined as a goal that has been achieved successfully by a company because of their value-creating strategy, which most companies find it difficult and cost a lot. While average return is a mathematical average of returns consumed based on a period of time, therefore, they have a connection because when the company has high level of strategic company competitiveness, the returns are above average in which it helps the company earns more than its competitors. Innovative companies like Google or Amazon can gain above-average earnings because of their strategic competitiveness that help them to cross sell their products and services that add value to users. Today, the key criteria for achieving strategic competitiveness is innovation and customer orientation, which both require commitment and investment in R&D and marketing.

3. The conditions of consistently changing and dynamic markets in which companies aren’t able to hold on the advantages of competitive are called hyper competition. Technological development and the emergence of global economy and technology are the main factors of hyper competition. Companies that are effective in an hypercompetitive environment produce a lot of changes to their strategies, such as reinventions of the business and creation of an emotional link with their customers. When it becomes difficult for companies to sustain competitive advantages, this is mainly due to the rapid changes in the environment because of unpredictable patterns. For example, in technology, it is very difficult to predict what sorts of new developments or applications will be launched in the near future and which ones will be accepted by consumers. Snapchat was a very successful application created by Snap. The company wanted to be acquired by Facebook, but it was not successful. As a result, Facebook introduced its own features in Instagram, as a more innovative feature, which defeated Snapchat’s success. Hyper competition allows firms like Facebook to gain advantages, while it pushes companies like Snap to be more innovative.

4. I\O model has four main assumptions, which are: First, companies can adopt effective or successful strategies by the pressure created because of the external environment. Second, the firms in the exact field are assumed to have or adopt similar strategies. Third, the resources should be mobile in order to communicate. Finally, the management of an organization should be effective in decision-making. The greatest limitation of this model is that the competitiors can easily copy the company’s innovations. However, companies may determine different sets of strategies, even when they offer the same type of service or product.

5. Resource-based view of the firm includes the application of both tangible and intangible resources in which the company uses them in order to increase the value in order to offer for customers. Also, the resources increase the differentiation as well as decrease the production cost.

The two key assumptions of RBV are that resources must also be heterogeneous and immobile. Heterogeneity means that the condition that knowledge, skills, competencies and abilities should be different than other companies. Immobility refers to the assumption that resources cannot be transferred easily from one to another in the short term. As a result, if these resources are rare, inimitable, create value both for customers and organization, then it allows to build a competitive advantage.

1. The vision of an organization is a long-term view (usually 10-15 year time frame) on its actions and strategies in order to accomplish its mission, which is the ultimate reason for existence of the company, in addition to become and remain profitable. While the mission of the organization defines the fundamental purpose of it’s existences and it’s long or short-term goals. To have an organized as well as an effective business, the vision and mission statements must be specified. The advantage of having specified vision and mission is that if managers and employees can associate their daily tasks, the meaning and joy they receive from their jobs will increase, which in return have an impact on performance improvement. Employees become more committed and they can identify themselves with the company’s vision and mission, which are the building blocks of organizational culture.

2. Stakeholders are all parties that exist within the general environment of an organization; those who are directly or indirectly impacted by the actions of the company and those who can have power to impact company’s decisions such as employees, customers, suppliers, managers, shareholders, unions, media and government. Naturally, all parties have differing sometimes opposing and conflicting interests. Therefore, it is impossible to satisfy their all needs at the same time. For survival of the company, all of them should be satisfied, as they or their decisions can affect company positively or negatively.

3. Strategic management process is known for its continuous process of decision-making and implementation of new strategies. The process includes several steps, which are goal setting, analysis of business environment, formulation of a strategy, implementation of a strategy and evaluation of a strategy.

4. Globalization is a philosophy that takes and considers the entire globe as a single market. The biggest advantage of globalization is that while consumers may enjoy the same product or service regardless of their location, companies enjoy the benefits of reaching much larger markets. As a result of economies of scale, they can be both efficient, which help them reduce costs, and profitable because of large number of sales. Even though assuming the entire globe, as a single market is a great approach, companies also need to understand the cultural differences that completely influence consumer behavior. Therefore, it may be quite restrictive to accept the entire globe as a single market place, if a company wants to be successful. McDonalds is often shown as the prime example of globalization, but managing local supply chains, consumer preferences and tastes require an understanding of cultural differences. Therefore, differentiation can also be a part of strategy even for highly globalized companies.

5. The external environmental analysis is very important because it helps to identify a firm’s opportunities and threats, in addition to know about the competitive structure of the market. Moreover, the changes in the legal, political and technological environment are also critical as they directly determine company’s businesses. There are three major parts of the external environment, which are:

• General environment deals with the main forces that affect a business; technological, global, political-legal, socio-cultural, economic, demographic forces.

• Task environment deals with external parties that are a company interacts or compete with to continue operations; suppliers, distributors, competitors and consumers.

1. There are four activities of the external environmental analysis process are scanning, monitoring, forecasting, and assessing in which each of them has different mearning. First, scanning helps in tracking any changes in the external environment. Second, monitoring is consist of observeing these changes in an organization. Third, forecasting is related to the development of strategies to be completed with the possible outcomes of these changes. Finally, assessing is related to the evaluation of a strategy’s effectiveness (Hitt, Ireland & Hoskisson 41).

2. The general environment consists of the basis of PESTLE analysis in which political, economic, social, technological, legal, and environmental factors are identified and analyzed. This framework of analysis is important for any business because it provide the ability for the organization to identify the main goals, strategies as well as what it should be done. Companies need to know about the general environment in which they operate because of the changes influence the business directly. Managers need to be aware of all factors that can make any impact on the profitability of the company.

3. Porter’s five forces are

1) The threats of the new entrants (new entrants decrease a firm’s profitability),
2) the power of suppliers (provides a firm with source material),

3) The power of customers (they can either put a firm under pressure or increase its profits),
4) substitutes (customers have alternatives to choose from),
5) rivalry in an industry (for many firms it is a determining factor).

Threats of new entrants indicate how complicated is the industry structure, whether there are complexities to make initial investments to enter or whether some particular knowledge/skills required or any patent protections exist etc. The harder to enter, the easier to get profit for firms that exist within that particular industry.

Similarly, the power of suppliers determines firms’ profitability. Intel has been a key chip supplier for many computer manufacturers, and it is the best available item in the market. If Dell will experience a problem with Intel, this would directly affect laptop/desktop sales of Dell negatively.

Sometimes, the number of customers may be as low as one. Governments are the buyers of warplanes. Any damage in the relation would cost plane manufacturers too much.
The availability of substitutes affects companies demand curve directly. In the case of huge amount of substitutes exists, even a small price change would mean the loss of many customers. Therefore, the more the substitutes, the less gets the elasticity of product’s demand.

The rivalry is the key issue as well. In a monopolistic market, the monopolist can earn high profits. In oligopolistic markets, companies may act as one single firm so they can also gain monopolistic power. If the rivalry is high, then it becomes more difficult to gain huge profits in the market, because in perfectly competitive markets, both buyers and sellers are price takers.

1. There is a large number of factors that increase the competition in the industry. The major ones are a large number of competitors that strive for leadership is a market such as a slow-growing industry in which it make the companies capture shares from each other; high market shares that pose a temptation for competitors.

Another critical factor is that the threats of the new entrants. If there is no restriction to enter, a new company can be setup quickly so that not only the number of firms existing in the industry increases, but also the competition increases as well. If an industry grows fasts, it also attracts new firms to enter. Additionally, if firms see that potential of profit making in a particular industry, new players will also enter, as they will be attracted by profits.

Finally, the expectations and consumer preferences also play a major role. Hybrid cars were not preferred by many consumers, because of their unattractive design and performance. Electrical cars often perceived as ugly options until Tesla made commitment to increase attractiveness by design and performance. Other companies also started making the same move, because consumers no longer perceive electrical cars as an inferior option.

1. There are barries that considers as obstacles in which it prevent the organization leave the industry. The main factors that exit barriers are high redundancy costs, high levels of investments in non-transferrable fixed assets, costs of closure, and the potential of an upturn can be classified as exit barriers. For manufacturing firms, large plants and inventories are the major obstacle because of huge fixed assets. Similarly, companies with a large number of employees, employees with high salaries, or contracts with employees which stipulate high redundancy payments, the costs become a significant concern before exiting. These factors can prevent a company from leaving even when it earns negative returns on investment.

2. A group strategic group consists of firms that use several and similar strategies. Strategic groups can increase clearly among the members of theses groups as well as between different groups. Moreover, it can make a company less profitable (Hitt, Ireland & Hoskisson 60).

3. It is quite common that companies collect information about their competitors’ internal environment. From the systems approach perspective, companies operate in a single environment, and in interaction with each other. Therefore, it might be crucial for companies to know about other companies’ internal environment, since it is the external environment of the company itself. Competitive intelligence is the most widely used to technique to gather information about one’s competitor such as products, customers, market, suppliers. In addition to knowing more about competitors’ environment, it might be also very important to follow the changes within the environment; therefore, some argue that competitive intelligence shouldn't just be about competitors. The benefit of using competitive intelligence is that companies can develop corporate or business unit strategies against their competitors, prepare new, better or competing products or services to gain market share, and assess the effectiveness of a certain product or service before launching internally. All these help companies to enhance operations and to minimize risks and uncertainties about external environment.

4. Barriers to entry are the obstacles that prevent a company from entering an industry. Some of these barriers may include high startup costs, pressure from the existing firms, and difficulties to attract customers.

The major impact of barriers of entry is that it determines the competitive structure of a market. This, in return, defines the profit-making capabilities of firms, because whether the firms are price setter or price taker depends on the concentration of the market. In a highly competitive industry, where there is virtually no barrier to enter, all firms are the price takers, as well as the buyers, because companies have to compete at the level where there is no economic profit earned by any company in the long term. On the other hand, when there is are many barriers like patents, or access to natural resources or government regulations, then the competitive structure has been lost. In extreme cases, a monopoly can charge whatever price they wish to charge. As a result, barriers to entry shape many market dynamics including price, number of firms, as well as cost structure of companies.

1. Internal analysis can help the organization to develop an effective strategic plan in which it helps managers determine firms’ strengths, competency, weakness, and competitive liability. With a proper internal analysis, managers can also identify their core competencies and the areas for outsourcing so that they can reach to a more effective and efficient state.

2. Tangible resources of a company can be subdivided into several categories, which are: financial which is the ability to borrow, organizational, physical such as raw materials, inventory, technological is related to software. Intangible resources include knowledge, skills, ideas, brand name, quality and all other assets that cannot be quantified. The importance of these resources varies significantly. In some industries, such as in some technology firms, the existence of intangible resources is way more important than tangible, physical resources. While for maintaining some comparative advantage, the existence of intangible resources may help; the existence of tangible resources may not be the condition.

3. VRIO is the key strategic tool that provides possibility to determine which capabilities and resources, recognized through the process of internal analysis. As conditions in external environment continually change, companies need to adapt themselves in this dynamic environment. Therefore, the analysis of products’ or services’ value, rarity, imitability and organization is critical. Companies’ strategic positions are usually based on whether a firm is able to neutralize external threats (value); whether the resources are new (rarity), whether the strategy is easy or difficult to imitate (imitability), and whether the firm is well organized (organization). If a product or service is easy to imitate, no resources or raw materials are rate in production, or no barriers to enter into the market, then it would be more difficult to obtain a strategic position. However, companies can still create value and achieve operational excellence so that they can be profitable.

4. Value chain analysis refers to a structured method of analyzing the effects of all core activities on cost and/or differentiation of the value chain. The core principle is to determine all the activities, which an organization undertakes in order to create value. The value creation activities could be classified into primary activities and support activities. This identification of valuable competencies further contributes to the competitive advantage of a company. Focusing allows the firm to direct its resources to certain value chain activities to build competitive advantage

5. A core competency is known as the combination of numerous skills and resources that distinguish a firm from its competitors. Competitive rigidities are the reverse sides of core competencies. Moreover, core rigidities appear when there is overreliance on the companies advantages and managers do not make any improvements. In this case, competitors can even make the company’s advantages effective. Companies can aim to build absolute advantages to become the best in class in the field they operate. Therefore, the focus should be the continuous improvement of processes, qualities of products and services.

6. Value is a context-dependent concept. For example, within a company, a set of values is identified that demonstrates the core principles of company. Customer satisfaction, integrity, honesty etc. can be

On the other hand, if we evaluate the same concept from the economic perspective, it is the difference between willingness to pay and benefit received. If benefit or utility of a certain product is perceived to be higher than its price, then the value is created.

1. Outsourcing is purchasing support functions from external suppliers (Hitt, Ireland & Hoskisson 91). For example, some companies may prefer outsource its HR management, as they do not want to deal with the details of processes that are not familiar with. An American advertising agency operating in France may consider outsourcing the HR function because of the complications and differences in local laws and practices. In this way, both efficiency and effectiveness can be satisfied, because otherwise the investment, training and other costs may be huge, if that company wants to handle the HR function internally. Outsourcing is important in increasing a firm’s profitability because it has a number of advantages. First, it increases a company’s flexibility and reduces capital investments. Second, to achieve competitive superiority among other companies they should use outsourcing stratgy. Moreover, outsourcing is the basic form of trade, as discussed in economics. Companies trade when they have lower opportunity costs and comparative advantages, so that they can be better off after trade, comparing to their own attempts.

2. The evaluation of strengths and weaknesses should be the key concern for upper-level managers as they can put the best effort to close the gap in weak areas. Moreover, they can also position the firm accordingly, based on the strengths, so future decisions can contribute to the development of the firm. With the evaluation of strengths and weaknesses, firms can focus on the internal factors that can increase companies’ strengths and reduce weaknesses.

3. To provide an effective example, Coca-Cola is a company with sustainable competitive advantage since it has been proven the sustainability for over 100 years. Coca Cola develops new products regularly and it’s distributed worldwide which makes it accessible to billions of Coca cola’s fans. The company chooses areas to sell their products that are effective and other companies couldn’t sell in it, which made them successful.