Which of the two primary drivers of the competitive landscape is more influential?


“Strategic Competitiveness”Please respond to the following:From the first e-Activity, determine which of the two primary drivers of the competitive landscape is more influential. Explain your rationale.E- ACTIVITYUse the Internet or the Strayer Library to research an industry with a significant impact on your local economy (a business in Maryland, like ex-football player’s bars). Be prepared to discuss. Use the Internet or the Strayer Library to research a business failure. Be prepared to discuss.Explain which model (I / O model or resource-based model) you believe will best help a firm in the industry you researched earn above-average returns.
Senior Seminar in Business Administration
Strategic Management and Strategic
Upon completion of this lesson, you will be
able to:
Identify the vision, mission, and stakeholders
of a firm
Supporting Topics
The Competitive Landscape
The I/O Model of Above Average-Returns
The Resource-Based Model of Above
Vision and Mission
Strategic Leaders
The Strategic Management Process
The Competitive Landscape
Competition is Changing
Money is scare
Markets are becoming volatile
Firms effectively using the strategic
management process
Challenge competitors
The Competitive Landscape, continued
Global Economy
Helps create opportunities and challenges
European Union
700,000,000 potential customers
Seen as a low competition market and low cost producer
Now is an extremely competitive market
The Competitive Landscape, continued
Seen as a product of large firms competing
against each other
Can increase the range of opportunities for
Higher Performance Standards
Firms must exceed global standards to
earn above average returns
The Competitive Landscape, continued
Technology Related Trends and
Technology Diffusion
Has increased greatly over 15-20 years
Perceptual innovation
Imitation of Competitor Actions
The Competitive Landscape, continued
Changes in Information Technology
Technological Developments
Cell phones, computers, and social networking
Declining Costs of Information Technologies
Global proliferation
Availability of Information Technologies
Price changes from ISPs
The Competitive Landscape, continued
Basis of technology and its applications
Shift from hard assets to intangible resources
Todays competitive landscape puts a huge value
on intangible resources
Capturing Intelligence
Turn intelligence into usable knowledge
Gaining of a competitive advantage
Develop and acquire knowledge to integrate into the
Strategic Flexibility
The I/O Model of Above- Average Returns
Determining Strategies to Be a Successful
External Environment
Industrial Organization Model of AboveAverage Returns
Performance based on range of industry properties
Contains four assumptions
Challenges firms to find the best industry to thrive
The I/O Model of Above-Average Returns,
The Five Forces Model of Competition
Competitive Rivalry Among Industry Firms
Product Substitutes
Potential Entrants to the Industry
Many firms use this model to identify the
attractiveness of an industry
The Resource- Based Model of Above
Average Returns
Assumes Organizations Consist of Unique
Resources and Capabilities
Three Categories of Resources
Organizational Capital
Either Tangible or Intangible
Core Competencies
The Resource- Based Model of Above
Average Returns, continued
Basis of Competitive Advantage
Resources and capabilities not being mobile across
Become stronger and more difficult to imitate
When Resources and Capabilities Dont Yield a
Competitive Advantage

Costly to Imitate
No substitutable
Strategic Competitiveness & Competitive
Strategic Competitiveness
Value-creating strategy
Competitive Advantage
Competitors do not duplicate
No competitive advantage is permanent
Above-Average Returns
Exploiting a competitive advantage
Average returns

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Affect the vision and mission
Affected by strategic outcomes achieved
Have enforceable claims
Not every stakeholder has the same level
of influence
Stakeholders, continued
Capital market holders
Shareholders and major suppliers
Product market holders
Customers, suppliers, host communities, and
Organizational stakeholders
Points the firm in the direction of where it
would like to be
Reflect a firms values and aspirations
Relatively short and concise
CEO is responsible for working with others
to form the firms vision
On passing, ‘Finish’ button:
On failing, ‘Finish’ button:
Allow user to leave quiz:
User may view slides after quiz:
Goes to Next Slide
Goes to Next Slide
At any time
At any time
Vision is the foundation for the firms
Specifies businesses in which to compete
and customers to serve
Should establish a firms individuality
Should be inspiring and relevant to all
Business ethics are a vital part
Strategic Leaders
Strategic Leaders
People located in different areas and levels of
the firm
Organizational Cultures
Force that drives or fails to drive the
Strategic Leaders, continued
Strategic orientation
Promote innovation
Innovative thinking
Add ideas to a global mindset
Effective Strategic Leaders
Provide a vision as the foundation of the firms
Use one or more strategies
Strategic Leaders, continued
Predicting of Outcomes Based on Decisions
Concerned with an uncertain future
Future plans
Mapping an industrys profit pool
Analyzing the Profit Pool

Define pool boundaries
Estimate the pools overall size
Estimate the size of the value-chain activity
Reconcile the calculations
Strategic Management Process
Analyze external and internal
Develop mission and vision
Continuously evolving strategies
The Competitive Landscape
The I/O Model of Above Average-Returns
The Resource-Based Model of Above
Vision and Mission
Strategic Leaders
The Strategic Management Process


In today’s competitive business environment, strategic competitiveness is critical for a company’s success. A strategic management process can help analyze and identify key factors that determine a firm’s competitiveness and enable firms to earn above-average returns. This discussion will focus on the primary drivers of the competitive landscape, I/O model and resource-based model for above-average returns, and the importance of strategic flexibility.


The competitive landscape is complex, dynamic, and ever-changing. It includes economic, social, political, technological, and legal factors that influence the industry’s attractiveness and competitive dynamics. Two primary drivers of the competitive landscape are the I/O model and resource-based model. The I/O model emphasizes external factors, such as industry structure and positioning, that determine a firm’s above-average returns. On the other hand, the resource-based model emphasizes a firm’s internal resources and capabilities that provide a basis for sustainable competitive advantage.

To understand how these models can be applied, it is important to examine a specific industry and business failure. Consider researching an industry, like the restaurant business, which has a significant impact on the local economy, and a business that failed due to strategic management issues. Based on your research, which model do you think can help a firm in the industry earn above-average returns? Resource-based model may be more useful in the restaurant industry since it relies heavily on human resources, organizational capital, and core competencies to differentiate itself from competitors.

In addition, strategic flexibility is an essential element for firms to stay competitive and respond to the changing business environment. This involves investing in intangible resources, capturing intelligence, and aligning the organization’s capabilities with its strategy. Therefore, firms need to constantly evaluate their strategies and make adjustments to ensure they are leading their industry in competitiveness.

– Define strategic competitiveness and its importance in achieving above-average returns in business.
– Differentiate between the I/O model and the resource-based model in explaining how firms can achieve above-average returns.
– Identify the primary drivers of the competitive landscape and their impact on businesses.

Learning Outcomes:
– Identify and analyze the primary drivers of the competitive landscape and their impact on a specific industry.
– Compare and contrast the I/O model and the resource-based model in terms of their applicability to a specific firm or industry.
– Evaluate the vision, mission, and stakeholders of a firm and their relevance to strategic competitiveness.
– Develop strategic flexibility by integrating unique resources and capabilities into a firm’s core competencies.
– Demonstrate an understanding of the strategic management process and how it can help businesses adapt to changing market conditions.

Solution 1:

Determining the Primary Driver of the Competitive Landscape: I/O Model vs Resource-Based Model

The two primary drivers of the competitive landscape are the industrial organization (I/O) model and the resource-based model. The I/O model focuses on external factors that affect a firm’s profitability, such as industry structure and competition. On the other hand, the resource-based model emphasizes internal resources and capabilities as drivers of above-average returns.

In terms of influence, it can be argued that the resource-based model is more influential. This is because the model places emphasis on a firm’s unique resources and capabilities, which are difficult to imitate by competitors. In contrast, the I/O model assumes that firms in the same industry have similar resources and capabilities, and the only way to achieve above-average returns is by selecting attractive industries. Therefore, the resource-based model provides a more sustainable source of competitive advantage.

Solution 2:

Selecting a Model for Above-Average Returns in a Local Industry

When it comes to earning above-average returns, the resource-based model is the better choice for a firm in the local industry. This is because the model emphasizes the importance of a firm’s unique resources and capabilities, which can be leveraged to create a sustainable competitive advantage.

For example, let us consider a local restaurant business in Maryland, owned by a former football player. To stand out in the highly competitive restaurant industry, the business can focus on developing their unique resources and capabilities. This could include the owner’s personal brand and reputation, the restaurant’s signature dishes, and the restaurant’s exceptional customer service. By leveraging their unique resources and capabilities, the business can create a differentiated position in the market, attracting customers and achieving above-average returns. Therefore, the resource-based model is the best choice for the business to succeed in the local industry.

Suggested Resources/Books:
– “Competitive Strategy: Techniques for Analyzing Industries and Competitors” by Michael E. Porter
– “The Resource-Based View of the Firm: Ten Years After” by Jay B. Barney
– “Strategic Management: Concepts and Cases: Competitiveness and Globalization” by Michael A. Hitt, R. Duane Ireland, and Robert E. Hoskisson

Similar Asked Questions:
1. What is the I/O model of above-average returns?
2. How does the resource-based model of above-average returns differ from the I/O model?
3. What are the primary drivers of the competitive landscape?
4. How do organizations develop core competencies?
5. What is the role of strategic leaders in the strategic management process?

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