Bsiness strategy policy (chapter #1 Strategy, Business Models, and Competitive Advantage)

Strategy

A coordinated set of actions managers take to outperform competitors and achieve superior profitability.

Business Model

Management’s blueprint for delivering value to customers while generating profit.

Customer Value Proposition

How a firm satisfies buyer needs/wants at a price buyers consider good value.

Profit Formula

The company’s cost structure and pricing approach that ensures acceptable profits.

Competitive Advantage

When a company’s strategy leads to superior market position and profitability compared to rivals.

Sustainable Competitive Advantage

A lasting buyer preference for a company’s offerings despite competitors’ efforts to match or surpass them.

Low-Cost Provider Strategy

A strategy that achieves cost-based advantage over rivals by offering lower prices.

Broad Differentiation Strategy

Differentiating products or services in ways that appeal to a wide range of buyers.

Focused Low-Cost Strategy

Outcompeting rivals in a narrow market segment by achieving lower costs.

Focused Differentiation Strategy

Offering unique, customized attributes that appeal to a narrow/niche market.

Best-Cost Provider Strategy.

Giving customers more value by meeting quality expectations while beating price expectations.

Realized Strategy

A blend of deliberate planned initiatives and unplanned reactive responses to changing circumstances.

Abandoned Strategy Elements

Planned strategy components that fail in the marketplace and are discarded.

Strategic Fit

The degree to which a strategy aligns with the firm’s external and internal situation.

Good Strategy Execution

Effective implementation of a well-conceived plan, reflecting strong management and leading to good performance.

What is strategy?

Coordinated actions managers take to outperform competitors and achieve profitability.

What makes a strategy distinctive?

Competing differently—doing what rivals don’t or can’t do.

What is a business model?

Management’s blueprint for delivering value to customers while generating profit.

Two elements of a business model?

Customer Value Proposition + Profit Formula.

Five main strategic approaches?

Low-cost provider, broad differentiation, focused low-cost, focused differentiation, best-cost provider.

What is sustainable competitive advantage?

Durable buyer preference for a company’s offerings despite competitors’ efforts.

Why does strategy evolve?

Competitor moves, buyer shifts, market opportunities, new ideas, failing strategies.

What is realized strategy?

Combination of deliberate planned elements and unplanned emergent elements.

Three tests of a winning strategy?

Strategic fit, competitive advantage, performance.

Why is strategy execution important?

It reflects management quality and determines firm performance.