lecture one summaries Flashcards
strategy
vávizt najubg a choice. It is about deliberately choosing to be different.
Successful strategies contain the following four elements
consistent and long term goals
Formulated based on analyses
Effectively exploit resources
Business strategy
An idea, a business concept and a plan. It is also defined as the search for a favourable competitive positioning. It is a thoughtful plan by a company to produce desired outcomes in the marketplace vis-a-vis customers, channel members and competitors
Marketing strategy
is a functional strategy aimed at customer value creation, market orientation, segmentation, trgeting and positioning. marketing strategies for example involve decisions that involve selling a product or positioning a company om´n the market
The 5 Ps of strategy are
perspective
Position
Plan
Ploy
Pattern
The different uses for strategy
managers are likely to define strategy as a plan that specifies what the company intends to do and when, they have to define strategic goals, targets, strategic action programs.
Another understanding of strategy is specifically related to the position in the environment. In practical terms, there might be a particular industry a company is acting in. Whereas the position is outside of the organisation, the understanding of strategy can also be based on a more internal fuel. It is more about the perspective that includes vision, missino, andv values. Strategy can also be seen as a pattern. Successfully realized strategies are not always planed in advance, and planned strategies are not always realised. Overall strategy is abotu making hcoices and we would like ot make choices based on data
there are two success factors when we decide on a strategy to develop a new product. these include uniqueness and relevance. A matrix is shown below
Unique, not releevant:
customers dont need it, no repeat puchase, only product on the market
Unique, and relevant:
Relevant enough to survive in the long run, break through
Not unique and not relevant:
The same old things that nobody wants
Not unique, relevant:
Customers need it, much competition, tough to be profitable
Whenever we want to develop a new product there are 2 main success factors
it must be either unique or relevant or both. So, whenever you want to become the manager of your own start-up or launch a new product keep in mind that the new company/product must be unique and relevant
There are six principles that describe the essentials of strategy for company practice. These combine the most important aspects of conducting a successful strategy. They are also connected to each other
Quest for competitive advantage: Strategy is about gaining, sustaining, and renewing competitive advantage to ensure superior performance
Fit of markets and resources: Strategy is about creating a dynamic fit between the company and its environment
Being different and making different choices: Strategy is about being different and choosing what to do and what not to do
Path to a destination: Strategy pursues the achievement of a desired long term aspiration. It is a means to an end. A companys vision, mission and values represent its fundamental strategic intent and identity which guide strategy formulation
Consistency behaviour: Strategy is consistency in behaviour, whether intended (deliberate) or not intended (emergent)
Multiple level and theme alignment: Strategy is the symophony that results from multiple areas and strategic themes in an organization
There are several ways to measure a companys performance
Economic value
Accounting performance
Economic performance and shareholder value
Corporate sustainability performance
Two systems or modes of thinking
Intuitive thinking
Reflective thinking
Reflective thinking
Basically represents decisiosn taht are made based on logical norms and mathematical approaches
Most of the times strategic decisions can be best solved with sophisticated relational approaches
Controlled, concious, slow, explicit, logical and effortfulS
system 1 thinking
intuitive thinking
Automatic, unconscious, quick, implicit, emotional, effortless
Heuristics
are straightforward rules of thumb that we developed based on our past experiences, they ar ecognitive tools that help us make quick decisions or judgements. Life would be exhausting if we had to deliberate on every one of the hun dreds of choices tha twe make every day, so instead we use heuristics as shortcuts to make judgements about the world around us. Heuristics are helpful in strategic management as they provide time pressured professionals with a simple way of dealing with a complex world. Sometimes, however, heuristics lead to severe and systematic errors in decision making (people ar etypically unaware that they rely on heuristics). LEft unchecked, these subconscious cognitive biases undermine important strategic decision making
Strategic decisions
are directional with long term impact (usually about 1-7 yearrs), a strategic decision is company-wide and rather braod, a strategic decision is rather political than techincla or very specific, also when it comes to budget allocations strategies are about allocating resources rather than utilising different resources. So it is clear that there is a difference between strategic and operational decisions.
