WHAT IS STRATEGY AND WHY IS IT IMPORTANT?
1. Understand why every company needs a sound strategy to compete successfully, manage the conduct of its business, and strengthen its prospects for long-term success. 2. Develop an awareness of the four most dependable strategic approaches for setting a company apart from rivals and winning a sustainable competitive advantage. 3. Understand that a company’s strategy tends to evolve over time because of changing circumstances and ongoing management efforts to improve the company’s strategy. 4. Learn why it is important for a company to have a viable business model that outlines the company’s customer value proposition and its profit ...view middle of the document...
Doing what we should or should not do to produce a competitive edge.
♦ A creative, distinctive strategy:
Identifying a Company’s Strategy—What to Look For
Key initiatives of the Plan-to-Win strategy:
• Improved restaurant operations • Affordable pricing • Wide menu variety and beverage choices • Convenience and expansion of dining opportunities • Ongoing restaurant reinvestment and international expansion
The Quest for Competitive Advantage
• Which of McDonald’s 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? • Which of the initiatives will competitors likely attempt to overcome first?
♦ 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 firm’s products or services over those of its competitors.
♦ Sustainable Competitive Advantage
STRATEGIC APPROACH CHOICES
STRATEGIC APPROACHES ♦ Building a competitive advantage by:
Building Competitive Advantage
1. Striving to become the industry’s low-cost provider (efficiency).
Differentiation on features
Focus on market niche
2. Outcompeting rivals on differentiating features (effectiveness). 3. Focusing on better serving a niche market’s needs (efficiency and\or effectiveness). 4. Offering the lowest (best) prices for differentiated goods (best-cost provider).
GAINING SUSTAINABLE COMPETITIVE ADVANTAGE ♦ How to create a sustainable competitive advantage:
Why a Firm’s Strategy Evolves over Time ♦ Managers modify strategy in response to:
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Develop valuable expertise and competitive capabilities over the long-term that rivals cannot readily copy, match or best. Put the constant quest for sustainable competitive advantage at center stage in crafting your strategy.
Changing market conditions Advancing technology Fresh moves of competitors Shifting buyer needs Emerging market opportunities New ideas for improving the strategy
The Evolving Nature of a Firm’s Strategy ♦ Realized (current) strategy is a blend of:
A Company’s Strategy Is a Blend of Proactive Initiatives and Reactive Adjustments
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.
THE RELATIONSHIP BETWEEN A FIRM’S STRATEGY AND ITS BUSINESS MODEL
A Company’s Business Model ♦ How the business will make money :
By providing customers with value. The firm’s customer value...