What is Strategy? Flashcards
Why do change initiatives sometimes fail?
- Competing priorities
- Lack of skills
- Organization fatigue
- Poor vision
- Effort based vs Result based
Operational Effectiveness
Creating, producing, selling goods faster ad less defects than competitors.
Productivity frontier
Max value a company can provide at a given cost
Needs-based positioning
Serving most or all the needs of a particular group of customers
Ex. Vanguard
Hypercompetition
Hurting own company by becoming too efficient and copying other company’s models to stay ahead of the curve
Competitive convergence
Companies are less distinguishable as the productivity frontier increases and no company benefits as they all become more competitive.
Cost
Activities like creating, producing, selling and delivering products. 100s of different activities.
3 Types of Fit
- Consistency- aligned activities that are consistent with one another
- Reinforcing- Boost activities or complement each other
- Effort optimization- eliminate redundancy and minimize wasted effort. Efficiency
Competitive advantage
Basic units of a company to have an advantage or disadvantage over another
Variety-based positioning
Based on the subset of an industry’s products (niche) rather than the customer segments. Good when company can create product using distinctive activities
Ex. Jiffy Lube
Trade-off
When activities are incompatible. More of one, less of other or else face major inefficiencies
Southwest Airlines serves a small niche
Strategic advantage is that it performs different activities than its competitors
Access-based positioning
The best ways to reach a specific group of customers
Ex. Carmike
Why is OE alone bad?
It can create a rat race- everyone is lowering their profit margins
Also, it creates more competitive convergence (ubiquity)
Strategic positioning
Performing different activities from competitors, or similar activities in different ways
