Boundaries of the Firm Flashcards
What is strategy?
- Porter: “…about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value”
What does good strategy provide answer for?
- Where do we compete?
- What unique value do we bring to markets?
- What resources/ capabilities do we utilize to deliver value?
§ E.g. Unique reputation, specialist knowledge - How to sustain ability to create and provide unique value?
What is the valuable approach?
○ Understand how firms organise and compete
○ Understand markets and nature of competition
○ Secure foundation for good strategic decisions
What are horizontal boundaries of the firm?
Positioning in a market and how much space a firm wants to take up in a market
Size in any given market/ Scope
What are vertical boundaries of the firm?
linear framework of supply chain
How to create/provide a product or a service
What is strategic positioning?
§ On what basis does a firm compete?
§ Achieving and sustaining a competitive advantage
Key target: Value
What is internal organisation?
§ Architecture or structure of the firm
§ Incentive structures