Strategy Flashcards
Define strategy
a firm’s attempt to obtain sustainable competitive advantage and avoid commodification
Name four key aspects of strategy
the organizational mission
sources of customers
sources of competitive advantage
sources of corporate growth
Organizational mission
-often ignored or taken for granted
firm’s purpose- should focus on benefits or utility rather than products
Name four sources of customers
Increase market size- offense
Capture market share- offense
Build switching barriers- defense
Increase satisfaction- defense
Offense
-either increase the size of the market or increase your fraction of market share-
leading brands benefit from increased size, and market share does not always equate to profitability
Defense
-either build switching barriers or increase satisfaction-
Switching cost could slow attraction or be imitated.
Satisfaction does not mean more sales
Moderators for strategy
-maturity of the product category-
new, fragmented buyers prefer innovation and variety and less loyal- offense
mature, declining buyers prefer consistency and loyalty- defense
-customer turnover- high rate offense needs to be emphasized
monomaniacal
don’t overemphasize defection at the expense of acquisition
Summarize porters competitive advantage and three tactics
about being different- deliver unique mix of value
“operational effectiveness” is not LT advantage
-strategic positioning- needs or variety
-tradeoffs- valuable positions must be accompanied by tradeoffs
-fit- interlocked activities and difficult to disentangle
Resource based view
- competitive advantage is found through protected assets-
- identify and determine sustainability-
List potential assets, resources, and skills
- R&D capabilities
- Distribution
- Brand name
- Customer knowledge
- corporate culture
- customer service
- manufacturing processes
What are the three criteria for RBV sustainability
- inimitability- can it be copied
- appropriability - who owns it
- substitutability - are there substitutes
Positioning statement
represents marketing strategy
includes target market, frame of reference, point of difference, and reason to believe
Name four sources of growth
Same product - new markets
Related products- new markets
Unrelated product- same market
Unrelated product- new market
External criteria decision making
-traditional attractiveness criteria and porters five forces model should always be considered, growth is inherently risky
Incremental growth
-riskiness suggests diversifying into adjacent spaces in customer centric innovation is successful
List the 5 phases of customer centric innovation
- identify core customers
- extend products to address additional needs
- identify similar needs segments
- develop new capabilities
- identify unrelated segments but capabilities are applicable
Product-company fit
-exploitable and defensible opportunities
Name four ways firms error in judgement
- overestimate ability and uniqueness
- underestimate competencies needed for success
- overestimate transferability
- overestimate relevance
What drives long term growth?
core competencies that are central to creation of value and inimitable
attractive feature of thinking strategically
employers look for this skill and it does not degrade overtime
