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Terms in this set (18)
The set of actions that its managers take to outperform the company's competitors and achieve superior profitability
Strategy is about ...
Competing differently from rivals - doing what competitors dont do or, even better, doing what they can't do
A company achieves this when it provides buyers with superior value compared to rival sellers or offers the same value at a lower cost to the firm. The advantage is sustainable if it persists despite the best efforts of competitors to match or surpass this advantage
5 Basic Strategic Approaches
Low cost, brand differentiation, focused low cost, focused differentiation, best cost
Low-cost Provider strategy
Achieving a cost-based advantage over rivals. Produce a durable competitive edge when rivals find it hard to match
Brand differentiation strategy
Seeking to differentiate the company's product or service from that of rivals in ways that will appeal to a broad spectrum of buyers
Focused-low cost strategy
Concentrating on a narrow buyer segment and outcompeting rivals by having lower costs and thus being able to serve niche members at a lower price
Concentrating on a narrow buyer segment and outcompeting rivals by offering buyers customized attributes that meet their specialized needs and tastes better than rivals products
Best cost provider strategy
Giving customers more value for the money by satisfying their expectations on key quality features, performance, and / or service attributes while beating their price expectations. Hybrid strategy of low cost and differentiation.
Consists of proactive strategy elements that are planned
Consists of reactive strategy elements that emerge as changing conditions warrant.
Abandoned Strategy Elements
Comes off of deliberate strategy that didn't work out
Strategy in Toto (realized strategy)
A combination of proactive and reactive elements
Sets forth the logic for how its strategy will create value for customers and at the same time generate revenues sufficient to covers costs and realize a profit
A Winning Strategy must ...
Pass three tests (fit, competitive advantage, and performance)
How well does the strategy fit the company's situation?
Competitive Advantage Test
Is the strategy helping the company achieve a sustainable competitive advantage?
Is the strategy producing good company performance? 1) competitive strength and market standing 2) Profitability and financial strength