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| Words: 3204 | Submitted: 16-Mar-2012
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2.1.1 Strategic Thinking
Strategic thinking embraces the past, present and future. Understanding patterns and lessons from the past will certainly inform the future – but given the dynamic, turbulent and uncertain business environments that affect many industries and organizations, it would be dangerous to assume that the future will reflect the past and be a continuation of either past or existing trends.
Strategic planning is not strategic thinking. One is analysis and the other one is synthesis. Strategic thinking answers;
Where are we now?
Where do we want to go?
Business to be in
Market position to stakeout
Buyer needs and wants to satisfy
Outcomes to achieve
How do we get there?
Strategic Thinking Purposes and Elements
Based on: Rhodes, J and Thame, S (1988) Colors of Your Mind, Harper Collins
Merriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms". Competition, according to the theory, causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. The greater selection typically causes lower prices for the products, compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly). Three levels of economic competition have been classified:
The most narrow form is direct competition (also called category competition or brand competition), where products which perform the same function compete against each other. For example, one brand of pick-up trucks competes with several other brands of pick-up trucks. Sometimes, two companies are rivals and one adds new products to their line, which leads to the other company distributing the same new things, and in this manner they compete.
The next form is substitute or indirect competition, where products which are close substitutes for one another compete. For example, butter competes with margarine, mayonnaise and other various sauces and spreads.
The broadest form of competition is typically called budget competition. Included in this category is anything on which the consumer might want to spend their available money. For example, a family which has $20,000 available may choose to spend it on many different items, which can all be seen as competing with each other for the family's expenditure. This form of competition is also sometimes described as a competition of "share of wallet".
In addition, companies also compete for financing on the capital markets (equity or debt) in order to generate the necessary cash for their operations. Following are some other definitions for competition;
The act of competing, as for profit or a prize; rivalry.
A test of skill or ability; a contest: a skating competition.
Rivalry between two or more businesses striving for the same customer or market.
A competitor: The competition has cornered ...
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