Strategic Management Chapter 1
Competitive Advantage; sustainable
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. The advantage is ____________ if it persists despite the best efforts of competitors to match or surpass this advantage.
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
A strategy stands a better chance of succeeding when it is predicated on actions, business approaches, and competitive moves aimed at ....
Sustainable
An advantage is ___________ if it persists despite the best efforts of competitors to match or surpass this advantage.
Deliberate Strategy
Consists of proactive strategy elements that are planned
Emergent Strategy
Consists of reactive strategy elements that emerge as changing conditions warrant
1) Compete Successfully, 2) Manage Business Operations 3) Strengthen its prospects for long-term success
Companies need a distinctive strategy to......
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 attractive profit.
Strategy
The set of actions that a company's managers take to outperform the company's competitors and achieve superior profitability
Profit Formula
This describes the company's approach to determining the cost structure that will allow for acceptable profits, given the pricing tied to its customer value proposition
Customer Value Proposition
This lays out the company's approach to satisfying buyer wants and needs at a price customers will consider a good value
The Fit Test
This test assesses how well the strategy "fits" the company's situation
The Competitive Advantage Test
This test assesses whether the strategy is helping the company achieve a sustainable competitive advantage
The Performance Test
This test assesses whether the strategy is producing good company performance
A Low-Cost Provider strategy
Using this strategy, a company will aim to achieve a cost-based advantage over rivals. A company will produce a durable competitive edge when rivals find it hard to match the leader's approach to driving costs out of the business.
A Best-Cost Provider Strategy
Using this strategy, a company will aim to give customers more value for the money by satisfying their expectations on key quality features, performance, and/or service attributes while beating their price expectations
A focused low-cost strategy
Using this strategy, a company will concentrate on a narrow buyer segment and try to out-compete rivals by having lower costs and thus being able to serve niche members at a lower price.
A focused differentiation strategy
Using this strategy, a company will concentrate on a narrow buyer segment and try to out-compete rivals by offering buyers customized attributes that meet their specialized needs and tastes better than rivals' products.
A Broad Differentiation Strategy
Using this strategy, a company will seek to differentiate its product or service from that of rivals in ways that will appeal to the broad spectrum of buyers.
A Low-Cost Provider Strategy, A broad differentiation strategy, a focused low-cost strategy, A focused differentiation strategy, a best-cost provider strategy
What are the 5 most dependable strategic approaches?
1. Fit Test 2. The Competitive Advantage Test 3. The Performance Test
What are the three tests that a "Winning Strategy" must pass?
Walmart, Southwest Airlines
What are two examples of a low-cost provider strategy?
BMW, Apple
What are two examples of broad differentiation strategy?
Lululemon, Jiffy Lube
What are two examples of focused differentiation strategy
Target
What is an example of a best-cost provider?
Private-Label manufacturers of health, food, and beauty products
What is an example of a focused low-cost strategy?
Good Strategy + Good Strategy Execution
___________ + _____________ = Good Management