Chapter 1 Flashcards
What must all managers of a business determine a clear understanding of?
Why a company exists and wht the company matters in the marketplace.
Spells outs why the company matters in the marketplace by defining its approach to creating superior value for customers and how capabilitiies and resources will be employed to deliver the desired value to customers
Strategy
When does a strategy stand a chance of being sucessful?
When it foxuses on setting itself apart from its competitors.
What is strategy at its essence?
Doing what rivals cannot or will not do.
sets forth how its strategy and operating approaches will create valjue for customers, while at the same time generating revenues to cover costs and turn a profit.
Business Model
What are two major parts of a a business model
Customer value proposition
Profit Formula
Lays out company’s approach to satisfying buyer wants and needs at a price customers will consider a good value
Customer value proposition
company’s approach to determining a cost structure that will allow for acceptable profits given the pricing tied to its customer value proposition.
Profit Formula
Study Porter’s general strategies
Okay
What is the first part of a sustainable advantage?
Attracting a large number buyers that develop a durable preference for its products or services over competitors
What is the second part of a sustainable advantage?
despite the efforts of competitors to overcome or erode its advantage.
How do company’s strategies often evolve over time?
incrementally as management fine-tunes various pieces of the strategy and adjusts the strategy to respond to unfolding events.
What are some cases in which major strategy shifts are called for?
Failing strategy, or large market shift.
What are the two natures of evolving strategy?
Proactive moves
Adaptive Reactions
reactions to unanticipated developes and fresh market conditions
adaptive
moves to improve the company’s financial performance and secure a competitive edge
proactive
Management’s action plan for running the company is its proactive
deliberate strategy
What are failed deliberate strategies?
abandoned strategy elements
What are unplanned, reactive adjustsments that come from shifts in preferences, technology, or market opportunities
emergent strategy
What is the comination of deliberated planned elements and unplanned emergent elements?
Realized strategies
What are 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?
What are two metrics used in judging strategies performance?
- Gains in profitability and financial strength
2. Advances in the company’s competitive strength and market standing.
How well a company performs is directly attributable to the:
- Caliber of its strategy
2. proficiency with which the strategy is carried out.
