Ch 1: What is Strategy

Question 1

strategic management

Answer 1

the integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage

Question 2

strategy

Answer 2

a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors. To achieve superior performance, companies compete for resources.

Question 3

What does a good strategy enable?

Answer 3

enables a firm to achieve superior performance relative to its competitors

Question 4

What is a good strategy?

Answer 4

1. Diagnosis of the competitive challenge
2. A guiding policy
3. Set of coherent actions

Question 5

1. Diagnosis

Answer 5

The diagnosis of the competitive challenge is accomplished through analysis of the firm’s external and internal environments

Question 6

2. Guiding policy

Answer 6

A guiding policy to address the competitive challenge. Accomplished through strategy formulation, resulting in the firm’s corporate, business, and functional strategies

Question 7

3. A set of coherent actions

Answer 7

A set of coherent actions to implement the firm’s guiding policy. This element is accomplished through strategy implementation.

Question 8

competitive advantage

Answer 8

when a firm achieves superior performance relative to other competitors in the sam industry.

Question 9

sustainable competitive advantage

Answer 9

outperforming competitors over a prolonged period

Question 10

competitive disadvantage

Answer 10

when a firm underperforms its rivals or industry average

Question 11

competitive parity

Answer 11

when two or more firms perform at the same level

Question 12

What can be achieved through strategic positioning

Answer 12

achieve a combination of value and costs

Question 13

The greater the difference btw. value creation and cost, the greater the firm’s

Answer 13

economic contribution and the more likely it will gain competitive advantage

Question 14

Are operational effectiveness, competitive benchmarking,… strategy?

Answer 14

No they are not . They are not sufficient to achieve competitive advantage. Strategy is the firm’s overall effort to gain and sustain competitive advantage.

Question 15

Vision

Answer 15

What do we want to accomplish ultimately?

Capture an org. aspirations.

Question 16

Mission

Answer 16

How do we accomplish our goals?

Question 17

Values

Answer 17

What commitments do we make, and what guardrails do we put in place, legally and ethically as we pursue our vision and mission?

Question 18

What is an effective vision?

Answer 18

pervades the org. with a sense of winning and motivates employees to aim for the same target.

Question 19

strategic intent

Answer 19

a stretch goal that pervades the organization with a sense of winning, which it aims to achieve by building the necessary resources and capabilities through continuous learning.

Question 20

What do firms need to do to be effective in vision and mission?

Answer 20

They need to back up their visions and missions with strategic commitments

Question 21

What do customer-oriented vision statements allow companies to do what product-oriented vision statements do not?

Answer 21

Customer-oriented vision statements allow companies to adapt to changing environemnts

Question 22

core values statement

Answer 22

statement of principles to guide an org. as it works to achieve its vision and fulfill its mission, for both internal conduct and external interactions; it often includes explicit ethical considerations

Question 23

AFI Strategy Framework

Answer 23

Analyze
Formulate
Implement