Block 1 Flashcards
Define a company’s strategy:
The set of actions that its
managers take to outperform the
company’s competitors and
achieve superior profitability.
What is meant by a company’s strategy? (6)
- What is our present situation?
● Business environment and industry conditions.
● Firm’s financial and competitive capabilities. - Where do we want to go from here?
● Creating a vision for the firm’s future direction. - How are we going to get there?
● By crafting an action plan that heads the firm in the direction of its intended market position.
What is strategy about? (6)
● How to position the firm in the marketplace.
● How to attract customers.
● How to compete against rivals.
● How to achieve the firm’s performance targets.
● How to capitalize on opportunities to grow the business.
● How to respond to changing economic and market conditions.
Explain Strategy as a choice: (4)
● It’s about deciding to compete
differently from rivals
● Is likely to be successful when its
actions, business approaches, and
competitive moves appeal to
buyers in ways that:
- Set a company apart from its
rivals.
- Stake out a market position that
is not crowded with strong
competitors.
How can a company compete differently from rivals? (5)
● Doing what they don’t do or
doing it better.
● Doing what they cannot do.
● Doing things that attract
customers and set a firm
apart from its rivals.
● Doing things calculated to
produce a competitive edge
over rivals.
● Doing what the firm must
do and also knowing what it
must not do.
Why does a company need a strategy? (3)
● To improve its financial
performance.
● To strengthen its competitive
position.
● To gain a sustainable competitive
advantage over its market rivals.
What does a good strategy do for a company? (2)
● Helps produce above-average
profits.
● Increases competitive pressures on
rivals.
What should you look for when identifying a company’s strategy?
Actions to:
- Gain sales and market share with lower prices based on lower costs.
- Enter new markets or exit current ones.
- Capture emerging market opportunities and defend against external threats.
- Strengthen market standing by merging with other companies.
- Strengthen competitiveness through strategic alliances.
-Upgrade, acquire or build important resources.
Define a competitive advantage:
Meeting customer needs
either more effectively (with
products or services that customers
value more highly) or more
efficiently (by providing products or
services at a lower cost to customers)
Define a Sustainable competitive
advantage:
Giving buyers lasting reasons to prefer a firm’s products or services over those of its competitors.
What are the five basic strategic approaches?
- Low-cost provider
- Focused low-cost
- Best-cost provider
- Focused differentiation
- Broad differentiation
How do you create a sustainable
competitive advantage? (4)
● 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.
Why does a company’s strategy evolve over time? (6)
Managers modify strategy in response to:
● Changing market conditions
● Advancing technology
● Fresh moves of competitors
● Shifting buyer needs
● Emerging market opportunities
● New ideas for improving the strategy.
Explain a Realised (current) strategy:
A Realised (current) strategy is a blend of:
● Proactive (deliberate) strategy elements that include planned initiatives to improve the company’s financial performance and
secure a competitive edge.
● Reactive (emergent) strategy elements developed on the fly in response to unanticipated developments and fresh market conditions.
● Abandoned and superseded strategy elements that no longer fit with the firm’s ongoing strategy.
Define a deliberate strategy:
A firm’s deliberate strategy consists of proactive strategy elements that are both planned and realized as planned.