Unit 11.6 Flashcards
The main objective of business strategy is to…
achieve superior performance in the marketplace
Competitive Advantage (Def)
Superior performance relative to other competitors in the same industry or industry average
Competitive Advantage is not…
absolute, but judged relative to the average profitability of an industry or to a firm’s direct competitors.
If a firm has outperformed competitors over a prolonged period of time, it is said to have…
sustainable competitive advantage
Competitive Parity
When firms perform at the same level
Competitive Disadvantage
Underperformance relative to other firm and below industry average
Elements of a Good Business Strategy
- Diagnosis of the competitive advantage
- Guiding policy to address competitive Advantage
- Set of Coherent actions to implement the firm’s guiding policy
Diagnosis is done through an…
analysis of the firm’s external and internal environments
Guiding Policy is backed up by…
Strategic commitment such as:
- Capital Investments
- Changes to the technical and business architecture, business processes, human capital, and organizational structure
Simple Aspirations or Grandiose statements are…
not strategy
