Lesson 1 Introduction

"Business strategy is the planned and realized set of actions a firm takes to achieve its goals" (Rothaermel, 2014). Business strategy, as a subject, includes the decisions that management teams make in order to guide their way through the competitive landscape. As opposed to other subjects that you are studying (such as accounting, marketing, human resources, or finance), business strategy views the firm as a unit and addresses how this firm must act and react in order to survive from one time period to another. Much of what strategists analyze, therefore, is external to the firm.

Another way to define business strategy is as the study of competition. This course will focus, to a large degree, on how firms make decisions in order to outcompete rivals. Therefore, we can state that the main goals derived from an effective business strategy are that the corporation survives and that it thrives. But how do managers makes such decisions? It is not an easy task to be able to make important decisions in the face of incomplete and noisy information. In this lesson, we will study the types of issues, market actors, and events that managers must be cognizant of in order to effectively formulate and implement firm strategy.

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Learning Objectives

After completing this lesson, you should be able to

• define the nature of interorganizational competition,
• visualize competition as a chess match,
• define managerial decision-making constraints, and
• consider the effects of external actors and external events (shocks) on a competitive landscape.

Lesson 1 Readings and Activities 

By the end of this lesson, make sure you have completed the readings and activities found in the Lesson 1 Course Schedule.

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