SUMMARY
1. Firms use SMP to achieve strategic competitiveness(SC) & earn above average returns(AAR).
-SC is achieved when firms develops & implements a value-creating strategy.
-AAR provide the foundation needed in order to satisfy all of the firm’s stakeholders.
2. Since the nature of competition is different in the current competitive landscape, those making strategic decisions must adopt a different mind-set, which allows them to learn how to compete in highly turbulent & chaotic(disorganized) environments that produce a great deal of uncertainty. The globalization of industries in their markets and rapid & significant technological changes are the two primary factors that contribute to the turbulence (instability) of the competitive landscape.
3. Firms use 2 major models to help develop their vision & mission and then choose 1 or more strategies in pursuit of SC and AAR.
(i) Industrial Organization (I/O) Model, assumptions:
- firm’s external environment has large influence on the choice of strategies > do the firm’s internal resources, capabilities and core competencies.
- thus, it used to understand the effects an industry’s characteristic can have on a firm when deciding what strategy or strategies with which to compete against rivals.
- ARR are earned when the firms locates attractive industry or part of an industry and successfully implements the strategy dictated by the industry’s characteristics.

(ii) Resource-Based model, assumptions:
- firm’s unique resources, capabilities, & core competencies have major influence on selecting and using strategies > does the firm’s external environment.
- AAR are earned when the firm uses its valuable, rare, costly to imitate, and non-substitutable resources and capabilities to compete against its rival in 1 or more industries.
**Both models yield insights that are linked to