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14 Cards in this Set
- Front
- Back
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A company's strategy is... |
it's game plan to: - attract and please customers - outperform its competitors - achieve superior profitability |
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The central thrust of a strategy is... |
undertaking moves to build and strengthen the company's long-term competitive position and financial performance by competing differently from rivals and gaining a sustainable competitive advantage over them |
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How do companies achieve a competitive advantage? |
- by providing buyers with superior value compared to rivals - or offers the same value at a lower cost to the firm |
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What makes a competitive advantage sustainable? |
If it persists despite the best efforts of competitors to match or surpass this advantage |
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How do strategies evolve over time? |
- proactive deliberate actions to improve strategy - reactive emergent responses to unanticipated developments and changing market conditions |
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What does a company's business model do? |
-sets forth the logic for how the strategy will create value for customers and generate revenues sufficient to cover costs and realize a profit |
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What are two crucial elements of a business model? |
- the customer value proposition - the profit formula |
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What is a customer value proposition? |
A plan for satisfying customer wants and needs at a price customers will consider a good value |
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What is the profit formula? |
A plan for a cost structure that will enable the company to deliver the customer value proposition profitably. (Refer to Value-Price-Cost Framework) |
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What is the Value-Price-Cost Formula? |
Value (V) (customer's share - customer value proposition) Product Price (P) (firm's share - profit formula) Per-Unit Cost (C) |
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What is a profit formula? |
Price - Cost Reveals how efficiently a company can meet customer wants and needs and deliver on the value proposition |
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3 tests for a winning strategy |
1. Fit (inter,exter, dynamic consistency) 2. Competitive Advantage (durability) 3. Performance (financial and market) |
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Two performance indicators: |
1. competitive strength and market standing 2. profitability and financial strength |
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What can high company performance and a high degree of market success be attributable to? |
the caliber of the strategy and the proficiency with which it is executed |
