Chapter 1

-results in a product offering that wins buyer applause -helps strengthen the firms competitiveness and ability to compete successfully -well-matched to ongoing shifts in market conditions -lessens the likelihood different managers will inadvertently make decisions -improve the firm's financial performance -helps produce a competitive edge over rivals

Every company's management team needs a clear, specific, and deliberate action plan that:

a distinctive element that attracts customers and produces a competitive edge

Every strategy needs:

winning strategy

Fits the company's internal and external situations, builds sustainable competitive advantage, and improves company performance

come up with a distinctive element that builds strong customer loyalty and yields a winning competitive edge

Frequently used successful and dependable strategic approach:

it provides buyers with superior value compared to rival sellers or offers the same value at a lower cost

A company achieves a competitive advantage when:

sets forth key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner

A company's business model:

zeros in on the customer value proposition and its profit formula

A company's business model:

Management's action plan for outperforming competitors and achieving superior profitability

A company's strategy concerns:

grow the business, stake out market position, attract and please customers, compete successfully, conduct operations, and achieve performance objectives

A company's strategy consists of the action plan management is taking to:

the ongoing need of company managers to react and respond to changing market and competitive conditions

A company's strategy is a work in progress and evolves over time because of:

Management's commitment to provide direction and guidance, in terms of not only what the company should do but also what it should not do

A company's strategy is most accurately defined as:

proactive and reactive strategy elements

A company's strategy is typically a blend of?

is a company's most reliable ticket to above average profitability and a competitive advantage

A creative distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage:

focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche

A frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?

distinctive product offering

A strategic approach needs to feature a ________________________________ that buyers believe delivers superior value and that offers potential for winning a competitive advantage over rivals.

managerial commitment to undertake one set of actions rather than another

A strategy represents:

The Fit test, Competitive Advantage test, and The Performance test

A winning strategy must pass which 3 tests?

strategy

Consists of the competitive moves and business approaches that managers employ to attract and please customers, compete successfully, capitalize on opportunities to grow the business, respond to changing market conditions, conduct operations, and achieve the targeted financial and market performance:

compete differently from rivals

Crafting a good strategy entails deliberately choosing to compete differently from rivals

-attracts buyer attention -delivers superior value -converts buyers into loyal customers =gives the company added competitive power

Distinctive elements:

act to boost profitability and help gain a competitive edge over rivals

Distinctive elements:

managers need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals

In crafting a company's strategy:

the competitive advantage test

Is the strategy helping the company achieve a sustainable competitive advantage?

the performance test

Is the strategy producing good company performance?

the goodness of fit test

Is the strategy well-matched to the firm's internal and external situation?

-abandon certain strategy elements that have grown obsolete -modify the current strategy when conditions take an unexpected turn -modify the current strategy in response to the fresh strategic maneuvers of rival firms -take proactive actions to improve this or that piece of the strategy

It is common for management to do what while crafting a strategy?

customer value proposition

Lays out the company's approach to satisfying buyer wants and needs at a price customers will consider a good value:

company's business model

Management's blueprint for how it will generate revenues sufficient to cover costs and yield an attractive profit:

-changing circumstances that affect performance -competitor moves in the market and shifting needs of buyers -stagnating market and restrictive industrial opportunities -mounting evidence that the strategy is less effective

Managers must be prepared to modify their strategy in response to:

distinctive element

Really successful strategies contain a:

business model

Sets forth how its strategy and operating approaches will create value for customers while also generating ample revenues to cover costs and realize a profit

strategy relates broadly to a company's competitive moves and business approaches, a business model relates to whether the revenues and costs flowing from the strategy demonstrate that the business is viable from the standpoint go being able to generate revenues sufficient to cover costs and realize a profit

The difference between company's strategy and business model:

more attractive value proposition

The greater the value delivered to customers and the lower the price:

involves coming up with moves and actions that produce a durable competitive edge over rivals

The heart and soul of a company's strategy-making effort:

more appealing profit proposition or profit formula

The lower a firm's costs are in relation to the revenues generated:

good strategy-making combines with good strategy execution

The most telling signs of a well-managed company are:

-What is the firm's present situation? -What direction to head and what performance targets to set? -How to run the firm in ways that produce good results?

What are the 3 strategic questions all firms must answer?

-How can a company attract, keeps, and please customers? -How should the company respond to changing economic and market conditions? -How should the company be competitive against rivals? -How should the company position itself in the marketplace

What are the managerial considerations in determining how to compete successfully?

crafting a strategy that yields a competitive advantage over rivals

What is a company's out reliable means of achieving above-average profitability and financial performance?

what must managers do, and do well, to make a company a winner in the marketplace?

What is the foremost question in running a business enterprise?

competitive advantage

When an attractive number of buyers are drawn to purchase its products or services rather than those of competitors:

sustainable competitive advantage

When the basis for buyer preferences for its product/service offering relative to the offerings of its rivals is durable despite competitors best effort to nullify or overcome the appeal of its offering:

How well does the strategy fit the company's situation?

Which question can be used to distinguish a winning strategy from a mediocre or losing strategy?

profit proposition or profit formula

how the firm will create and deliver customer value in a cost-efficient manner and at a price that produces enough revenues to cover costs and enable attractive profits