What Do We Mean by Strategy Essay

533 WordsMar 13, 20143 Pages
WHAT DO WE MEAN BY STRATEGY ? * What is our present situation? * Business environment and industry conditions * Firm’s financial and competitive capabilities * Where do we want to go from here? * Creating a vision for the firm’s future direction * How are we going to get there? * Crafting an action plan that will get us there WHAT IS STRATEGY ABOUT? * Strategy is all about How: * 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 firm’s financial and market performance. 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. * A creative, distinctive strategy: * Can yield above-average profits. * Makes competition difficult for rivals. STRATEGY AND COMPETITORS * Strategy is about competing differently from rivals— * Doing what they don’t do or doing it better! * Doing what they can’t do! * Doing that which sets the firm apart and attracts customers. * Doing what we should or should not do to produce a competitive edge. The Quest for Competitive Advantage * Competitive Advantage * Meeting customer needs more effectively, with products or services that customers value more highly, or more efficiently, at lower cost. * Sustainable Competitive Advantage * Giving buyers lasting reasons to prefer a firm’s products or services over those of its competitors. STRATEGIC APPROACH CHOICES Low-cost provider Differentiation on features Focus on market niche Best-cost provider Building Competitive Advantage GAINING SUSTAINABLE
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