Question: Why has strategic management become so important to today’s corporations? Identify core elements of strategic management and discuss the inter-relationship between them.

Expert answer

Strategic management has become increasingly important to businesses in recent years due to the competitive landscape becoming increasingly global and ever-changing. There are a number of core elements to strategic management, which include:

1. Setting organizational goals: This involves establishing what the company wants to achieve, both in the short and long term.

2. Developing a strategy: A strategy is a plan of action that will help an organization achieve its goals. It should be tailored to the specific business and industry in question.

3. Implementing the strategy: Once a strategy has been developed, it needs to be put into action. This often involves allocating resources and making changes to how the business is run.

Identify and discuss the key drivers for internationalization. Using Porter’s diamond model, explains why some locations tend to produce firms with competitive advantages in some industries more than others. Support your answer with examples.

There are several key drivers that have contributed to the internationalization of businesses in recent years. The globalization of markets, the advancement of technology, and the increasing mobility of labor have all played a role in this trend.

Porter's diamond model is a useful tool for understanding why some locations tend to produce firms with competitive advantages in certain industries. The model posits that four factors - factor conditions, demand conditions, related and supporting industries, and firm structure and strategy - interact to give rise to a country's or region's comparative advantage in a particular industry.

For example, Japan has historically had a comparative advantage in the auto industry due to its strong factor conditions (e.g. skilled labor), demand conditions (e.g. high domestic demand for cars), related and supporting industries (e.g. a strong auto parts manufacturing sector), and firm structure and strategy (e.g. vertically integrated firms).

The internationalization of business is likely to continue in the years ahead, as companies increasingly look to tap into new markets and capitalize on opportunities for growth. Understanding the key drivers of this trend is essential for businesses that want to stay ahead of the curve.