• Unit 1: Introduction to Strategy

    In order to understand how to design a strategy, you must first review some definitions. Accordingly, this unit will open by defining the terms strategy, markets, firms, and management. This unit will also underscore that firms must identify the market that they compete in. It is not enough to identify competitors, which will be discussed in a later unit; Microsoft and Google are competitors, but they do not compete in all of the same markets. Google mostly competes in the search engine market, to which Microsoft has recently started to devote an increasing number of resources in the hopes of competing with the new "decision engine" called Bing. Likewise, Microsoft competes in the operating system market, and Google has recently diverted resources to compete in this market with Google Chrome OS. However, competitors do not always compete in the same markets. For example, Apple competes in many markets with Google and Microsoft, but makes these companies' products available on its own platform. Apple does not have a search engine, so it allows Google and Microsoft to compete on the iPhone.

    Identifying markets and industries gives a firm the foundation it needs to develop goals and strategies. Microsoft may aim to take 5% of the search engine market from Google and then develop a strategy in which to accomplish this. This unit focuses on topics such as these as well as issues like designing strategies at different levels within a firm. There are corporate strategies, but there are also strategies designed by a line of business or department.

    Completing this unit should take you approximately 8 hours.

    • Upon successful completion of this unit, you will be able to:

      • define strategy in its many forms;
      • discuss the participants in strategy as a hierarchy; and
      • analyze market structures.

    • 1.1: Definition

      • Introduction to Strategic Management Page
        This video is an introduction to strategic management, starting with a traditional approach. It leads you through the major concepts that will follow in BUS501. Do not be overwhelmed by the scope of strategic management. You may want to have the course syllabus in front of you and note the flow of the course as you watch the video.
      • Business Strategy URL

        Read through this book as a high-level introduction to Strategic Management and its applications. Outline or take notes as you read, and pay attention to the key points identified in each section. Consider the three-legged stool explanation 5 minutes into the video you just watched. How do the three legs compare with this book's three main processes of business strategic management?

      • 1.1.1: Strategy

        • What is Strategy? Page

          As you watch the videos in this course, recognize that they have been produced by several different professors and often include references to activities and resources used in the course in which they have been recorded. Pay attention to key concepts stressed in the instructions included with each activity as you progress through BUS501.

          Before you watch this video, write down your definition of strategy. Pay attention to the role of strategy in achieving organizational goals. This professor has recorded many informational lectures on strategy that cannot be specifically referenced in this course because of copyright issues. However, as you continue through the materials in this course, you are encouraged to do your own independent research to access other items by the professors with presentation styles that are meaningful to you.

          Now, sit back and enjoy this overview of strategic management!

      • 1.1.2: Markets

        • Market Structure Page

          Read this short article and study the diagram. This is a good reference item identifying and defining the four basic market structures. In developing a strategy, one needs first to identify the structure the firm is competing in.

        • Other Market Structures Page

          This video defines and explains competition in each of the different market structures from an economics viewpoint. In which structure might uniqueness be the most important? In which structure might uniqueness be the least important?

        • Perfect Competition Page

          As you watch this video, pay attention to the terms you've heard in your economics courses. Pause the video and review any terms that are unfamiliar to you. Can you name at least one business or service in your community that is an example of (near) perfect competition?

        • Monopoly Page

          Watch this video for a better understanding of monopolies. Consider the current evolution of these two structures (perfect competition vs. monopoly) in an expanding global-enterprise environment.

      • 1.1.3: Firms

        • Price, the Only Revenue Generator URL

          In microeconomics, the purpose of every business is to make a profit. In business strategy management, this profit motive is often opposed by organization goals that bend towards social welfare or the firm's reputation. Read the section on the firm's pricing objectives. Can you identify a business that appears to promote a non-profit business goal, such as being a "green" organization?

        • Developing Organizational Objectives and Formulating Strategies URL

          Read this section, which serves as an overview of the strategic planning process from a market plan perspective. Various stakeholders may look to a firm to maximize different objectives. Think about how firms are in a competitive marketplace and how they can survive and thrive long term.

    • 1.2: Strategic Hierarchy

      • The Hierarchy of Strategies Page

        This chart summarizes the many levels in a business that may be affected by a strategy decision. As you examine this chart, think about how each level of strategy is interrelated to the others. A more complex organizational structure must be strategically managed to be effective and efficient. Any structure must leverage each part's strengths.

    • 1.3: Industry Analysis

        • 1.3.1: Industry Classification System

          • North American Industry Classification System (NAICS) URL

            Read the introduction, which explains how industries are categorized in the United States. This system allows governments to measure the overall business activity in each sector of the economy.

          • SIC Division Structure URL

            The SIC Division Structure is a list of categorizations of businesses and industries. Explore the many classifications and think about how strategies might differ among industries.

        • 1.3.2: Porter's Five Forces

          • Developing Strategy through External Analysis URL

            Read this section to learn the difference between internal and external forces and how they affect organizations. Attempt the exercises at the end of the section.

          • Porter's Five Forces Page

            Read this article, which explains Porter's five forces to consider in business strategy development. This model has been the classical approach to industry analysis since the late 1970s.

          • The Five Forces of Industry Competitive Advantage URL

            Read this section, which updates Porter's five forces model to account for the effect of technology on strategic management. After you read, complete the exercises at the end of the section.

      • Unit 1 Assessments

        • Unit 1 Assessment Quiz
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          Take this assessment to see how well you understood this unit.

          • This assessment does not count towards your grade. It is just for practice!
          • You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
          • You can take this assessment as many times as you want, whenever you want.
        • Unit 1 Written Exercise Quiz
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          Once you submit your answer, evaluate it using the provided guide to responding.