Professional Documents
Culture Documents
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How to outcompete rivals. How to respond to economic and market conditions and growth opportunities. How to manage functional pieces of the business. How to improve the firms financial and market performance.
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Business environment and industry conditions Firms financial and competitive capabilities Creating a vision for the firms future direction
Strategy
An integrated set of choices that position a firm, in an industry, to earn superior returns over the long run
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WHY DO STRATEGY ?
A firm does strategy:
To improve its financial performance. To strengthen its competitive position. To gain a sustainable competitive. advantage over its market rivals. Can yield above-average profits.
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Follow-up
Which of McDonalds Plan-to-Win strategy initiatives are associated with meeting customer needs more effectively?
Which initiatives are focused on more efficiently delivering products and services? Which initiatives will likely result in the most enduring competitive advantage?
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Competitive Advantage
Meeting customer needs more effectively, with products or services that customers value more highly, or more efficiently, at lower cost.
Giving buyers lasting reasons to prefer a firms products or services over those of its competitors.
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Changing market conditions Advancing technology Fresh moves of competitors Shifting buyer needs Emerging market opportunities New ideas for improving the strategy
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The Evolving Nature of a Firms Strategy Realized (current) strategy is a blend of:
Proactive (deliberate) strategy elements that include both continued and new initiatives. Reactive (emergent) strategy elements that are required due to unanticipated competitive developments and fresh market conditions.
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Realized Strategy
Competitive Initiatives
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Business Model
Value Proposition
Business Approaches
Profit Formula
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Winning Strategy
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The Fit Test Does it exhibit dynamic fit with the external and internal aspects of the firms overall situation? The Competitive Advantage Test Can it help the firm achieve a significant and sustainable competitive advantage? The Performance Test Can it produce good performance as measured by the firms profitability, financial and competitive strengths, and market standing?
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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.
THINKING STRATEGICALLY
Googles web browser-based Chrome operating system and its online applications suite are now challenging Microsofts long-term dominance of those marketplace sectors.
What should be Microsofts first response to this competitive challenge? How will Microsofts response to this competitors actions affect its business model? Which competitors strategy will likely be the eventual winner in the marketplace?
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What must managers do, and do well, to make a firm a winner in the marketplace?
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.