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23 Cards in this Set
- Front
- Back
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Strategy |
Coordinated set of actions that it’s managers take in order to outperform the company’s competitors and achieve superior profitability |
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All businesses face three central questions |
1. what is our present situation 2. what should the company‘s future direction be and what performance targets should be set 3. what’s our plan for running the company and achieving good results |
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The how’s of strategy |
- How to position the firm the marketplace - how to attract customers - how to compete against rivals - how to achieve the firms performance targets - How to capitalize on opportunities to grow the business - How to respond to changing economic and market chain conditions |
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Competitive advantage requires |
Meeting customer needs either more effectively - with products or services that customers value more highly Or more efficiently - by providing products or services at a lower cost to customers |
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Sustainable competitive advantage requires |
- Giving buyers lasting reasons to prefer firms products over competitors - Developing expertise and long-term competitive capabilities that cannot be readily overcome - Putting the constant quest for sustainable competitive advantage at center stage in crafting your strategy |
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The five basic strategic approaches |
- Low cost provider strategy - broad differentiation strategy - A focused low cost strategy - Focused differentiation strategy - Best cost provide a strategy |
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Low-cost provider strategy |
Achieving a cost based advantage over arrivals EX: southwest Amazon Walmart |
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Broad differentiation strategy |
Differentiating the firms products or services from rivals in ways that appeal to a broad spectrum of buyers EX: Mercedes Neiman Marcus Apple |
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Focused low-cost strategy |
Concentrating on a niche market segment By having lower costs to serve niche members at a lower price EX: harbor freight H&M dollar shave club |
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Focused differentiation strategy |
Concentrating on a market niche by offering buyers customize attributes that make their specialized needs and taste better than rival products EX: Ferrari Nike |
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Best cost provider strategy |
Giving customers more perceived value for their money by Satisfying their expectations on key quality features, performance, and/or service attributes that match or exceed their price expectations EX: Publix Trader Joe’s chipotle |
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Modify Strategy in response to: |
Changing market conditions Advancing technology Fresh moves of competitors Shifting buyer needs Emerging Market opportunities New ideas for improving the strategy |
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Realized strategy is a blend of |
Proactive, reactive and abandoned strategy elements |
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Competitive initiatives and business approaches are a part of what kind of strategy |
Realized strategy |
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Value proposition and profit formula is a part of |
The business model |
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Creates a cost structure that allows for acceptable profits given that pricing is tied to customer value proposition |
Creates a cost structure that allows for acceptable profits given that pricing is tied to customer value proposition |
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VPC stands for rule of the profit formula |
V - The value provided to customers P - the price to charged to customers C - The firms costs the firms costs |
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Rule of the profit formula |
The lower the cost (C) for a given customer value proposition (V - P) the greater the ability of the business model to be a money maker |
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The three Tests a winning strategy must pass |
The fit test The competitive advantage test The performance test |
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Does it fit the external and internal aspects of the firms dynamic situation? |
Does it fit the external and internal aspects of the firms dynamic situation? |
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Is it likely to result in a sustainable competitive advantage |
Is it likely to result in a sustainable competitive advantage |
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The performance test |
Is it producing superior performance as indicated by the markets profitability, financial and competitive strength, and market standing |
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Good management |
Strategy + strategy carried out well |
