Ch 1, 2 Flashcards
Two elements of a business model
- its customer value proposition
2. its profit formula
Strategies for winning a sustainable competitive advantage
- A low-cost provider strategy
- A broad differentiation strategy
- A focused low-cost strategy
- A focused differentiation strategy
- A best-cost provider strategy
What is a realized strategy?
a combination of deliberate planned elements and unplanned emergent elements. Some components of the planned elements become obsolete and become abandoned strategy elements.
The three tests of a winning strategy:
- How well does the strategy fit the company’s situation?
- Is the strategy helping the company achieve a sustainable competitive advantage?
- Is the strategy producing good company performance?
List the stages of crafting and executing a strategy!
- Developing a strategic vision
- Setting objectives
- Crafting a strategy
- Implementing and executing the chosen strategy
- Evaluating and analyzing the external environment and the company’s internal situation and performance.
What is strategic vision?
It describes “where we are going”… the companies future customer-market-technology focus.
List, with understanding, the characteristics of effectively worded Vision statement!
Graphic–builds a magnificent mental picture,
Directional–forward-looking,
Focused,
Flexible–not so focused,
Feasible,
Desirable,
Easy to communicate–can be reduced to a “slogan”
List the shortcomings in company vision statements!
- Vague or incomplete
- Not forward looking
- Too broad
- Bland or uninspiring
- Not distinctive
- Too reliant on superlatives
Mission statement:
describes the company’s present business and purpose: “who we are, what we do, and why we are here”.
What is a balanced scorecard?
it is a method that uses both financial and strategic objective achievements to measure the performance of management or the company as a whole
What are strategic objectives?
strengthening:
- market standing,
- competitive vitality,
- future business prospects.
list some examples of financial and strategic objectives:
fin’l:
- x percent increase in rev
- x increase in earnings/share
- bond and credit ratings
Strategic:
- win an x market share
- customer satisfaction rate
- acquire x number of new customers
Company’s strategy-making hierarchy:
- Corporate Strategy
- Business Strategy
- Functional Area Strategy
- Operating Strategy
Role of Board of directors in the strategy formulation, execution process:
- Oversee the company’s fin’l accounting and reporting practices,
- Diligently critique and oversee the company’s direction, strategy, and business,
- Evaluate the caliber of executives’ skills
- Institute a compensation plan for top execs.
