1. strategic approach choices
1.1. Building Competitive Advantage
1.1.1. Low-cost provider
1.1.2. Differentiation on features
1.1.3. Focus on market niche
1.1.4. Best-cost provider
1.2. A firm achieves a competitive advantage when it provides buyers with superior value compared to rival sellers or offers the same value at a lower cost to the firm.
1.3. The firm achieves a sustainable competitive advantage if its advantage persists despite the best efforts of competitors to match or surpass its advantage.
2. different perspectives on strategy formulation
2.1. A company’s deliberate strategy consists of proactive strategy elements that are both planned and realized as planned; its emergent strategy consists of reactive strategy elements that emerge as changing conditions warrant
2.1.1. Proactive (deliberate) strategy elements that include both continued and new initiatives
2.1.2. Reactive (emergent) strategy elements that are required due to unanticipated competitive developments and fresh market conditions.
2.1.3. An intended strategy is one that the organization has delib- erately chosen to pursue and will therefore have been worked out in detail. A realized strategy is the strategy that the organization actually carries out
2.1.4. The competitive environment comprises both threats and opportunities. This provides the familiar SWOT analysis of strengths, weaknesses, opportunities, and threats. An external analysis is used to identify the opportunities and threats facing the firm, while an internal analysis of the organization identifies its strengths and weaknesses.
3. the linkages between an organization’s strategy and its external and internal environment
3.1. A company’s strategy and its business model, it takes a proven business model—one that yields appealing profitability—to demonstrate viability of a firm’s strategy.
3.1.1. A company’s business model sets forth the logic for how its strategy will create value for customers, while at the same time generate revenues sufficient to cover costs and realize a profit
3.1.2. By providing customers with value ; The firm’s customer value proposition
3.1.3. By generating revenues sufficient to cover costs and produce attractive profits ; The firm’s profit formula
3.2. Business model elements
3.2.1. The Customer Value Proposition : Satisfying buyer wants and needs at a price customers will consider a good value and The greater the value provided (V) and the lower the price (P), the more attractive the value proposition is to customers.
3.2.2. Creating a cost structure that allows for acceptable profits, given that pricing is tied to the customer value proposition and The lower the costs (C) for a given customer value proposition (V–P), the greater the ability of the business model to be a moneymaker
3.3. A winning strategy must pass three tests
3.3.1. The Fit Test ; Does it exhibit dynamic fit with the external and internal aspects of the firm’s overall situation?
3.3.2. The Competitive Advantage Test : Can it help the firm achieve a significant and sustainable competitive advantage?
3.3.3. The Performance Test Can it produce good performance as measured by the firm’s profitability, financial and competitive strengths, and market standing?
3.4. Strategy provides:
3.4.1. A prescription for doing business. A road map to competitive advantage. A game plan for pleasing customers. A formula for attaining long-term standout marketplace performance
3.5. The road ahead strategy
3.5.1. Strategy is about asking the right questions: What must managers do, and do well, to make a firm a winner in the marketplace?
3.5.2. Strategy requires getting the right answers: Good strategic thinking and good management of the strategy-making, strategy-executing process. First-rate capabilities and skills in crafting and executing strategy are essential to managing successfully.
4. is meant by strategy
4.1. is its action plan for outperforming its competitors and achieving superior profitability
4.2. Business environment and industry conditions and Firm’s financial and competitive capabilities
4.3. Creating a vision for the firm’s future direction
4.4. Crafting an action plan for heading the firm in the intended direction, staking out a market position, attracting customers, achieving the targeted financial and market performance, and getting the firm where it wants to go is its strategy.
4.5. Strategy is all about How: How to attract and please customers. How to compete against rivals. How to position the firm in the marketplace. How best to respond to changing economic and market conditions. How to capitalize on attractive opportunities to grow the business. How to achieve the firm’s performance targets.
4.6. A firm needs a strategy to specify what actions are going to be taken and Strategy is about competing differently from rivals: To improve its financial performance. To strengthen its competitive position. To gain a sustainable competitive advantage over its market rivals. A creative, distinctive strategy: Helps produce above-average profits. Increases competitive pressures on rivals.
5. strategic management process
5.1. Strategy Analys
5.1.1. This is also referred to as situation analysis. Whilst bearing in mind that the strategic management process is co-dependent, the undertaking of strategy analysis by the organization is a useful starting point. This involves an analysis of the general environment and the competitive environment. Strategy analysis also deals with the organization’s internal environment. It allows the organ- ization to evaluate how well it is positioned to exploit the opportunities in its external environment.
5.2. Strategy Formulation
5.2.1. A careful analysis of the firm’s internal environment and the needs of the external environment will allow the firm to assess where it can best achieve a strategic fit between the two. Without some form of analysis decisions can only be based on ex- perience.
5.3. Strategy Implementation
5.3.1. The best formulated strategy in the world will amount to nothing if it is poorly com- municated throughout the organization and incorrectly implemented. Effective implementation of strategies requires the organization to be sufficiently flexible in its organizational structure and design. Strategies need to be communicated, under- stood, and properly coordinated with stakeholders inside and outside the organ- ization
5.4. Strategy Principle
5.4.1. Changing circumstances and ongoing management efforts to improve the strategy cause a company’s strategy to evolve over time—a condition that makes the task of crafting strategy a work in progress, not a one-time event.
5.4.2. A company’s strategy is shaped partly by management analysis and choice and partly by the necessity of adapting and learning by doing.
6. Values, Visions, and Mission Statements
6.1. Vision
6.1.1. this is often associated with the founder of an organization and represents a desired state that the organization aspires to achieve in the future.
6.2. Mission
6.2.1. seeks to answer the question why an organization exists
6.3. Value
6.3.1. describe a core ideology which is made up of core values and purpose. The corevalues are an organization’s essential and enduring tenets which will not be compromised for financial expediency and short-term gains. They do not shift as competitive condi- tions change but remain largely inviolate. It is what members are expected to endorse and internalize as part of working for such organizations