Strategic Management Flashcards
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What is a
strategy?
A coordinated set of actions
to outperform competitors
and achieve profitability
Strategy is
about (pacacr)
How to position the firm in the market place,
how to attract customers, how to compete
against rivals, how to achieve firms’
performance targets, how to capitalize on
opportunities to grow the business
Strategy is successful when its
actions, businesses approaches,
and competitive moves appeal to
buyers in ways that:
Set it apart from its rivals by either providing
products with higher perceived values or
efficiently producing at lower costs. Stake
out (find) a market position that is not
crowded with strong competitors
Competitive
advantage
Requires meeting customer
needs either more effectively
or more efficiently
Sustainable
competitive
advantage requires
Giving buyers lasting reasons to prefer a firm’s
products or services over those of its
competitors.
.Developing expertise and long-term competitive
capabilities that cannot be readily overcome
.Putting the constant quest for sustainable
competitive advantage at center stage in crafting
your strategy
Name 5 basic
strategic approaches
Low-cost provider strategy .Broad differentiation strategy .Focused low-cost strategy .Focused differentiation strategy .Best-cost provider strategy
Low-cost
provider strategy
Achieving a
cost-based
advantage over rivals
Broad Differentiation
strategy
differentiating the firm’s
product or service from rivals
in ways that appeal to broad
spectrum of buyers
A focused
low-cost strategy
Concentrating on a narrow
buyer segment by having
lower costs to serve niche
members at a lower price
Focused
differentiation
strategy
concentrating on a narrow buyer segment by offering buyers customized attributes that meet their specialized needs better than rivals'products
Best-cost
provider strategy
giving customers more perceived
value for their money by
satisfying their expectations on
key quality futures
Managers modify
strategy in response
to (CAFSEN)
Changing market conditions, advancing technology, fresh moves of competitors, shifting buyer needs, emerging market opportunities, new ideas for improving the strategy
Proactive
strategy elements
Include planned initiatives to
improve the company’s
financial performance and
secure a competitive edge
Reactive strategy
elements
Developed on the fly in
response to unanticipated
developments and fresh
market conditions
Superseded
strategy
Elements that no longer
fit with the company’s
ongoing strategy
How the firm will
make money
By providing customers with value
By generating revenues sufficient to
cover costs and produce attractive
profits
Customer value
proposition
Satisfying buyer wants and
needs at a price customers
will consider a good value
Profit formula
Creates a cost structure that
allows for acceptable profits,
given that pricing is tied to the
customer value proposition