STR581: Ch 1: What is strategy and why is it important?

The actions that a company takes in accordance with its established practices make up its ______ strategy, in contrast with actions the company takes in response to changing market conditions.

deliberate

The key for a company to achieve competitive advantage is either to provide superior value to customers or to deliver value more ____.

efficiently

Actions taken in response to new strategic maneuvers by rival firms or other unanticipated market circumstances make up a company's _______ strategy.

emergent

business model

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 and attractive profit.

A company's realized strategy is a combination of _____.

proactive and reactive elements

A company's approach to meeting or exceeding its customers' needs at a price they consider a good value is called the ____.

customer value proposition

True or false: it is easier for rivals to imitative a company's product line than it is for them to duplicate its capabilities.

true

What company invented the business model for fast food restaurants?

McDonalds

A strategy that changes in response to new market conditions and challenges is known as _____

an evolving strategy

What aspect of a company's operations is usually the easiest thing for competitors to duplicate?

attributes of the company's products or services

A blueprint that outlines the means for a company to deliver value to customers in a suitably profitable manner is known as its ______

business model

A sound company strategy is essentially about ______ in comparison to company rivals.

competing differently

When a business is more successful than its rivals at attracting customers and handling competition, it is said to have a(n) ____ advantage.

competitive

When a business is more successful than its rivals at attracting customers and handling competition, it is said to have a(n) _______ advantage.

competitive

deliberate strategy

consisting of proactive strategy elements that are both planned and realized as planned

emergent strategy

consists of reactive strategy elements that emerge as changing conditions warrant

The actions that a company takes in accordance with its established business practices make up its _____ strategy, in contrast with actions that company takes in response to changing market conditions.

deliberate

The profit ______ is the company's approach to determining a cost structure that will allow for acceptable profits, given the pricing tied to its customer value proposition.

formula

Which statement about the connection between good strategy and good execution is true?

good management consists of good strategy and good strategy execution.

What is one key characteristic of a focused low cost strategy?

it seeks to sell to a narrow market niche

A typical company's strategy is often both _____, meaning that it plans ways to improve the company's competitiveness, and _____, meaning that it responds to unforeseen market conditions.

proactive; reactive

competitive advantage

some type of edge over rivals in attracting buyers and coping with competitive forces.

strategy

the coordinated set of actions that its managers take in order to outperform the company's competitors and achieve superior profitability

What is the purpose of the fit test?

to determine how well a strategy matches the company's situation

Which three companies have broad differentiation strategies that have allowed them to maintain long term competitive advantages?

1. BMW 2. Johnson & Johnson 3. Apple

two elements of a company's business model

1. customer value proposition 2. profit formula

5 of the most frequently used and dependable strategic approaches to setting a company apart

1. a low cost provider strategy: achieving a cost based advantage over rivals. 2. a 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. 3. a focused low-cost strategy: concentrating on a narrow buyer segments and outcompeting rivals by having lower costs and thus being able to serve niche members at a lower price. 4. a focused differentiation strategy: concentrating on a narrow buyer segment and outcompeting rivals by uttering buyers customized attributes that meet their specialized needs and tastes better than rivals' products. 5. a 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.

Which performance indicators are signs of a winning strategy?

1. above average financial performance 2. gaines in competitive postion 3. increased market share

The general profit formula for fast food restaurants as invented by McDonald's involves which of the following?

1. advertising and in store promotions 2. strict specifications for ingredients 3. standardized store design

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 2. staking out a market position that is not crowded with strong competitors.

What are some fo the ways that companies typically implement a competitive strategy?

1. by delivering superior customer service 2. by focusing on quality 3. by diversifying product lines

What are two basic approaches in company strategy to improve chances of success in competing against rivals?

1. clearly differentiate a company from its rivals 2. establish a position in an uncrowded market

What performance indicators reveal the most about the merits of a company's strategy?

1. competitive strength and market standing 2. profitability and financial strength

two kinds of performance indicators

1. competitive strength and market standing 2. profitability and financial strength ***above average financial performance or gains in market share, competitive position, or profitability are signs of a winning strategy***

A company's ultimate success or failure is fundamentally tied to how well its management team does which of the following?

1. develops competitively effective strategies 2. charts the company's direction 3. facilitates internal operating excellence

A business strategy becomes unethical when it involves what elements?

1. disreputable behavior 2. unreasonable damage to the environment 3. deceitfulness

Which of the following are the components of a fit test that help evaluate how well a company's strategy matches its situation?

1. external fit 2. internal fit 3. dynamic fit

What are three of the most reliable ways a company can distinguish itself in the marketplace, build customer loyalty, and achieve a competitive advantage?

1. focused low cost strategy 2. broad differentiation strategy 3. low cost provider strategy

In what ways does a competitive advantage benefit a business?

1. greater success in the marketplace 2. larger profits

What choices must managers consider when committing to a company strategy for competing against rival companies?

1. how to capitalize on growth opportunities 2. how to attract customers 3. how to respond to market conditions

Which of the following impediments to a company's long term industry success?

1. imitative strategies 2. illogical strategies 3. inadequate attempts to improve

Which of the following are impediments to a company's long term industry success?

1. imitative strategies 2. inadequate attempts to improve 3. illogical strategies

Which circumstances commonly require the modification of a company's strategy?

1. new market opportunities 2. shift in buyer needs 3. technological advances

What are two characteristics of a broad differentiation strategy?

1. offering products or services that are difficult to imitate 2. appealing to a wide range of consumers

the typical company strategy is a blend of...

1. proactive: planned initiatives to improve the company's financial performance and secure a competitive edge 2. reactive: responses to unanticipated developments and fresh market conditions.

What are the two basic ways that companies achieve competitive advantage over their business rivals?

1. produce products or services at a lower cost 2. deliver higher perceived value to customers

3 ways to determine if a strategy is a WINNING STRATEGY

1. the first test: how well does the strategy fit the company's situation. A strategy must exhibit fit along three dimensions (1) external (2) internal (3) dynamic 2. the competitive advantage test: is the strategy helping the company achieve a competitive advantage? Is the competitive advantage likely to be sustainable? 3. the performance test: is the strategy producing superior company performance?

A company's business model is comprised of which of the following?

1. the profit formula 2. the customer value proposition

Which oof the following are reasons for crafting and executing strategies to be important managerial tasks?

1. the provide a path to competitive advantage 2. they lay out the means for pleasing customers 3. they establish a formula for improving performance

Which strategic actions fall into the "should not do" category and are probably unethical?

1. they have a negative effect on customers, employees, and the surrounding community 2. they make the company look bad 3. they cause a public backlash and accusations of being irresponsible