company strategy
the set of actions that its managers take to outperform the company's competitors and achieve superior profitability.
what makes
... [Show More] a competitive advantage sustainable:
are elements of the strategy that give buyers lasting reasons to prefer a company's products or services over those of competitors--reasons that the competitors are unable to nullify or overcome despite their best efforts.
most basic 5 approaches for setting a company apart from rivals and winning a sustainable competitive advantage
1-low-cost provider strategy, 2-broad differentiation strategy, 3-focused low-cost strategy 4-focused differentiation strategy, 5-best-cost provider strategy
company's strategy tends to evolve
because of changing circumstances and ongoing efforts by management to improve the strategy.
why should a company have a viable business model that outlines the company's customer value proposition and its profit formula?
A company's business model sets forth the logic for how its strategy will create value for customers and at the same time generate revenues sufficient to cover costs and realize a profit. Thus, it contains 2 crucial elements, (1) the customer value proposition, & (2) the profit formula. These elements are illustrated by the value-price-cost framework.
A winning strategy must pass three tests:
(1) fit (external, internal, and dynamic consistency), (2) competitive advantage ( durable competitive advantage), and (3) performance (outstanding financial and market performance).
low-cost provider strategy
achieving a cost-based advantage over rivals.
broad differentiation strategy
seeking to differentiate the company's product or service from that of rivals in ways that will appeal to a broad spectrum of buyers.
focused low-cost strategy
concentrating on a narrow buyer segment and outcompeting rivals by having lower costs and thus being able to serve niche members at a lower price.
focused differentiation strategy
concentrating on a narrow buyer segment (or market niche) and outcompeting rivals by offering buyers customized attributes that meet their specialized needs and tastes better than rivals' products.
best-cost provider strategy
giving customers more value for the money by satisfying their expectations on key quality features, performance, and/or service attributes while beating their price expectations. Blends low-cost provider and differentiation strategies; the aim is to have lower costs than rivals while simultaneously offering better differentiating attributes.
crafting a good strategy covers both S-T and L-T, achieving this entails making a managerial commitment to a coherent array of well-considered choices about how to compete: These include:
-How to position the company in the market place. '-How to attract customers. '-How to compete against rivals. '-How to achieve the company's performance targets. '-How to capitalize on opportunities to grow the business. '-How to respond to changing economic and market conditions.
A strategy stands a better chance of succeeding when it is predicated on actions, business approaches, and competitive moves aimed at:
(1) appealing to buyers in ways that set a company apart from its rivals and (2) staking out a market position that is not crowded with strong competitors.
A company achieves a __________ when it provides buyers with superior value compared to rival sellers or offers the same value at a lower cost to the firm.
competitive advantage
The advantage is _________ if it persists despite the best efforts of competitors to match or surpass this advantage.
sustainable
Changing circumstances and ongoing management efforts to improve the strategy cause a company's strategy to :
evolve over time--a condition that makes the task of crafting strategy a work in progress, not a one-time event.
A company's strategy is shaped partly by:
management analysis and choice and partly by the necessity of adapting and learning by doing.
The evolving nature of a company's strategy means that the typical company strategy is a blend of
(1) proactive and (2) reactive
Proactive
planned initiatives to improve the company's financial performance and secure a competitive edge
reactive
responses to unanticipated developments and fresh market conditions.
A deliberate strategy
consists of proactive strategy elements that are both planned and realized as planned (while other planned strategy elements may not work out and are abandoned in consequence).
A company's _______ consists of proactive strategy elements that are planned
deliberate strategy
A company's ________ consists of reactive strategy elements that emerge as changing conditions warrant.
emergent strategy
A company's ________ can be observed in the pattern of its actions over time, which is a far better indicator than any of its strategic plans on paper or any public pronouncements about its strategy
realized strategy
business model
is management's blueprint for delivering a valuable product or service to customers in a manner that will generate revenues sufficient to cover costs and yield an attractive profit.
the two elements of a company's business model are:
(1) customer value proposition and (2) profit [Show Less]