Week 1 Flashcards
Who benefits from a good business strategy?
STAKEHOLDERS!
Capital market (banks, shareholders)
Product market (customers, suppliers)
Organizational (employees)
Community (communities, government, activists)
Who is responsible for business strategies?
Strategic leaders
They formulate and implement strategy through strategic management process, in order to ensure the survival and success of an organization
Board of directors, other top management for guidance
Deliberate strategies?
A plan formulated deliberately and that is carried out to achieve company mission/goals
Made as result of analysis of markets, customers, competitors and the firm’s resources/capabilities
Done intentionally
Emergent strategy?
A plan of action that develops and emerges over time despite a mission and goals of company
What are the keys to a successful implementation strategy
- in the overall strategy, the functional strategies within it has to align with the unique value
- the structure, skills, system, employees and shared values need to be designed to facilitate the execution of the strategy
- how to sustain the competitive advantage
What is a resource? and the different types
Intangible and tangible assets a firm employs to create value and competitive advantage
Physical
Financial
Human
Intangible
What is a capabilitiy? (and types)
Capabilities are processes and activities a firm develops using its resources
Operating capabilities - McDonald’s take orders fast
Dynamic capabilities - P&G have many brands, refined its capability to make new brands
Why do some firms earn more than others?
Firms with higher profits may be in an industry with a higher average profitability
Four choices that are part of strategy formulation
How to develop a strategy
- what market
- what unique value should the firm offer in that market
- what resources and capabilities can allow the firm to deliver unique value to customers than competitors
- how will the company sustain advantage to prevent imitation
What is a strategy?
A plan of action to gain and sustain competitive advantage
What is a competitive advantage?
Operating with an attribute or set of attributes that allows an organization to outperform its rivals (generate higher profits)
What is a competitive sustained advantage?
An attribute that is difficult for competitors to imitate
