Block 1 Flashcards
What is Company Strategy?
is the set of actions that its managers take to attract customers, 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 via more performance features, more appealing design
- Gain sales and market share with lower prices based on lower costs.
- Enter new markets or exit existing ones.
- Capture emerging market opportunities and defend against external threats.
- Strengthen market standing by merging with other companies.
- Strengthen competitiveness through strategic alliances.
- Managing R&D, production, sales and marketing and other key activities.
- Upgrade, acquire or build important resources.
- Strengthening the firm’s bargaining power with suppliers distributors and others
Define a competitive advantage:
Is when a company provides buyers with superior value compared to rival sellers or offers the same value at a lower cost to the firm.
Define a Sustainable competitive
advantage:
Is when a company’s competitive advantage persists despite the best efforts of competitors to match or surpass this advantage.
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 beat.
- 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.
Define an emergent strategy:
An emergent strategy consists of reactive strategy elements that emerge as changing conditions warrant.