Chapter 1

Question 0

What must a strategy be predicated on to be successful?

Answer 0

actions, business approaches, and competitive moves aimed at appealing to buyers in ways that set a company apart from rivals

Question 1

What is strategy?

Answer 1

an action plan for outperforming competitors and achieving superior profitability

Question 2

What does competitive advantage mean?

Answer 2

giving buyers what they perceive as superior value compared to the offerings of rival sellers or giving the same value as others at a lower cost to the firm

Question 3

What is sustainable advantage

Answer 3

if it persists despite the best efforts of competitors to match or surpass this advantage

Question 4

Why does a company’s strategy evolve over time??

Answer 4

changing circumstances and ongoing management efforts to improve the company’s strategy.

Question 5

What is a company’s strategy shaped by?

Answer 5

management analysis and choice & the necessity of adapting and learning by doing

Question 6

What is a deliberate strategy

Answer 6

proactive strategy elements that are both planned and realized as planned

Question 7

what is an emergent strategy

Answer 7

reactive strategy elements that emerge as changing conditions warrant

Question 8

What is a business model

Answer 8

sets forth the logic for how its strategy will create value for customers while at the same time generate revenues sufficient to recover costs and realize profit

Question 9

What three tests does a winning strategy pass

Answer 9

1. the fit test - ( external, internal, and dynamic consistency) how well does the strategy fit the company’s situation
2. the competitive advantage test- (durable competitive advantage) can the strategy help the company achieve a sustainable competitive advantage?
3. the performance test - (outstanding financial and market performance) is the strategy producing good company performance

Question 10

What two crucial elements does a business model contain

Answer 10

1. customer value proposition - a plan for satisfying customer wants and needs at a price customers will consider good value
2. profit formula- a plan for a cost structure that will enable the company to deliver the customer value proposition profitably