Chapter 1

What is a winning strategy?

is a detailed plan for achieving success in the situation.

The customer value proposition lays out the company's approach to?

to satisfying buyer wants and needs at a price customers will consider a good value. ●The greater the value provided (V) and the lower the price (P), the more attractive the value proposition is to customers ●The lower the costs (C) for a given customer value proposition (V-P), the greater the ability of the business model to be a moneymaker.

Conditions under which company achieves sustainable competitive advantage

Sustainable competitive advantage requires giving buyers lasting reasons to prefer a firm's products or services over those of its competitors. Strategies include(pg.7 of textbook): -low cost provider -focused low cost -best cost provider -focused differentiation -broad differentiation How to create a sustainable competitive advantage: ●Develop valuable expertise and competitive capabilities over the long-term that rivals cannot readily copy, match, or best ●Put the constant quest for sustainable competitive advantage at center stage in crafting your strategy

A winning strategy must pass which three tests?

To determine if your strategy is a winner, you perform the following three test: -The competitive advantage test -The fit test -The performance test (see pg. 12 of textbook for further details)

Why is it important to craft a business model?

a business model is a company'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.

What is an excellent execution of strategy?

One that is paired with good overall strategy and good management to carry out the good day-in day-out strategy execution and operating excellence. How well a company performs and the degree of market success it enjoys are directly attributable to the caliber of its strategy and the proficiency with which the strategy is executed.

Why are crafting and executing business strategies the foremost task of any organization?

-A clear and reasoned strategy is management's prescription for doing business, its road map to competitive advantage, its game plan for pleasing customers, and its formula for improving performance. Success will not be lasting unless the companies subsequently craft a strategy that capitalizes on their luck, builds on what is working, and discards the rest. -Even the best strategies will result in performance shortfalls if they are not executed proficiently. The processes of crafting and executing strategies must go hand in hand if a company is to be successful in the long term.

Elements of a company's business strategy

-Proactive (deliberate) strategy elements -Reactive (emergent) strategy elements -Abandoned and superseded strategy elements

What factors should managers consider when elevating existing strategies?

-changing market conditions -advancing technology -fresh moves of competitors -shifting buyer needs -emerging market opportunities -new ideas for improving the strategy

Difference between a company's strategy and a company's business model

A company's strategy is the set of actions that its managers take to outperform the company's competitors and achieve superior profitability. A firm's business model sets forth the logic for how its strategy will create value for customers, while at the same time generate revenues sufficient to cover costs and realize a profit.