Wharton on Dynamic Competitive Strategy

Nash (1950) postulated the Nash Equilibrium (NE) and has since been implicated in many aspects of human endeavour, and one of which is rational decision making. A facet of NE shows that a rational decision becomes optimal when a considered decision is made within the context of the organisation’s objectives and is independent of others. Because

According to Porter (2013), competitive strategy is used to assist company to have an effective cost in the production and profitable. Besides that, it is to maintain or enhance the position of company in the market by determine competitors of industry. The competition among is good for customers because each company would make an efforts to increase performance in the market like innovations, creativity, and also offer customers additional value which make difference from other company. His frameworks consist of five elements which are shown in figure 1below.

This paper gives the reader an insight into how a manager in a competitive industry in a two-firm constant sum game makes decisions. The writer will be playing the role of a Home Depot, Inc. manager, and the major competitor is Lowe’s, Inc. Home Depot is the largest United States (U.S.) home-improvement retailer while Lowe’s is the second-largest U.S. home-improvement retailer. This is significant because what one company does affects the other. To compare the two companies their company profiles were reviewed. The latest news headlines on both companies were

Cadotte, Ernest R. & Bruce, Harry J. (2003). The Management of Strategy in the Marketplace.

In chapter 1, and the videos presented to us, we learned that there are bad decisions being made at all levels of management. We assume that as executives the answers should be straightforward and easy. The reality is such that decisions made by these individuals are flawed from the beginning due to nature of thinking applied to them.

Being a strategist is the key point in this book. She uses many theoretical detailed about all the ideas and concepts related to the behavior of organizations in the business areas.

In other words, which strategies deliver the best performance hinges on the strength and interplay of the strategies employed by rival companies—not on some mystery "silver bullet" decision combination that players are challenged to discover.

The three main elements of decision making consists of pure rationality, incrementalism, and limited rationality. There are key differences between the three theories, but they are essential to many corporations. Pure rationality is an orderly budget process that chooses the best alternative to increase sales from its resources. When problems arise, information about all alternatives are available for the actor(s) to pick the best solution unanimously. The rational model explains that pure rationality’s main objective is to maximize benefits and minimize cost with its resources. For example, if you are selling a MacBook laptop for $1,500.00 and you receive five offers, it will always result in optimal choice. This is a managerial aspect of decision making because actors want what is best for the organization. For each decision they make, the organization must take responsibility when there are

In the article, “The Five Competitive Forces that Shape Strategy,” Michael Porter argues that the five forces are an important element for managers and investors in the business industry. Porter stated that it is important to “understand the competitive forces, and their underlying causes” which many companies will use to determine if they will gain profit or not (Porter 80). Companies determine their profitability of the industry through the level of the force that they face. For instance, when the forces are favorable, most companies will be profitable. Porter gives a detail description of the five forces and explains the importance of each force. The five forces are the threats of new entrants, the power of the buyers, the power of the suppliers, the threats of substitute for products or services, and the rivalry among existing competitors. Porter believes that “a company strategist who understands the competition extends well beyond existing rivals will detect wider competitive threats and be better equipped to address them” (Porter 93). In other words, when strategists understand the different forces it will benefit them to make better decisions and to be ready to face the different challenges between competitors. In the article, Porter’s main goal is to present the importance of the five forces to the audience.

The concept of ‘rationality’ has been talked through the centuries. According to Grey (2013), rationality is a big question because of this proposition which has the meaning and difficulties seem to be defining of a whole set of issues which have resonated through both organisation theory and practice ever since. And rationality is the basis of a decision, rational decision makers are objective and logical, they reach the goal that maximises the value. Not only rationality is important to organisations, and also it can be identified in various kinds of management theories. This essay will introduce the different aspects of the concept of ‘rationality’ and make explanations that how these are recognised in different management theories.

The marketplace has been dynamic and competition between companies in the same industry has been increasingly intense (Ranchhod, 2004). Having dynamic capabilities contributes to a company’s “long-term survival or competitive advantage” (Johnson et al., 2008: 84). This is especially essential

Please discuss Mintzberg’s Mode of Strategic Decision Making by using real example and must relate with Three Characteristics of Strategic Decisions.

Furthermore, this particular topic helps the business world in so many ways. Competitiveness, Strategy, and Productivity are the three important characteristics of any business. Competitiveness in this chapter refers to the effectiveness of an organization in the marketplace similar to the other operations that offer familiar products or services. Strategy is known to denote a particular plan for achieving

Strategic behavior is what drives a company into a competitive market with the tools to be successful. If the leaders in a company do not take into account all of the criteria that establishes a strategic behavioral plan, they will not be able to compete in the industry at their highest potential. Ursacescu and Cioc (2015) describe the criteria that is incorporated into making strategic behavioral decisions such as operational intelligence, informational intelligence,

“Competitive strategy involves positioning a business to maximize the value of the capabilities that distinguish it from its competitor’s” (Porter 1980:47). A successful business plan requires first and foremost the formation of an appropriate strategy. Through the implementation of a suitable strategy, the company is able to obtain its own industry niche and gain an understanding of its customers (Porter 1985). Whichever strategy is adopted it must be adequately integrated within the firms goals and missions to achieve a competitive advantage (Parker and Helms 1992).