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Imax

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1 DEVELOPING A SUSTAINABLE COMPETITIVE ADVANTAGE THROUGH STRATEGIC POSITIONING By R. Murray Lindsay April 2002 Strategic management is the process by which senior management ensures that the organization’s strategy is carried out or that it is modified to reflect changing conditions or knowledge. Management accounting and control systems play a key role in strategic management. While a management control course will typically take strategy as a given, it is important for you to have a reasonable understanding of strategy before we can begin to discuss management control systems or strategic management. This is because a firm’s strategy is the starting point for the design of effective systems of performance measurement and control. Moreover, the word strategy is used in many different ways, reflecting the fact that it consists of multiple facets or dimensions. Progress on understanding the accounting and control issues requires that we share a common understanding of the term and its various dimensions. The purpose of this essay is therefore to provide you with an understanding of strategy, if only at an introductory level. After reading and thinking about the material in this reading you should understand: the vocabulary used in the strategy literature so that you can feel comfortable talking to people about strategy; how choosing a strategy represents an attempt to achieve a fit between the firm and its external or business environment; a firm’s value proposition to its customers; generic value propositions (strategies); Michael Porter’s key principles underlying competitive strategy and how it differs from operational excellence; and the strategic management cycle and a beginning of an appreciation of the role accounting information plays in it (strategic management accounting). Corporate Strategy versus Business Strategy In order for an organization to earn

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