strategy guide

The competitive moves and business approaches that managers are employing to grow the business, attract and please customers, compete successfully, conduct operations, and acheive the targeted levels of organizational performance.

• Competitive Activities
• External "Intervations" (e.g. Lawsuits)
• Performance "Gaps" (e.g. Sales)
• Evolving Customer preferences/changes in technology
• Emerging market opportunities

Sustainable competitive advantage is when an attractive number of buyers prefer its product/services over those of rivals and when the basis for this preference can be maintained over time.

• Being the industry's low-cost provider
• Incorporate differentiating features
• Focusing on a narrow market niche
• Developing expertise and resource strengths

Business model states, how do we make money in this business. Puts the numbers to strategy. The strategy answers "How are we going to get there."

• How well does strategy fit the firm's situation?
• Does the strategy lead to a sustainable competitive advantage?
• Does the strategy boost firm performance based on the business model?

Is the view of what is morally "good" and "right" behavior in a particular setting.

Applies to business concerns a company's duty to operate in an honorable manner, provide good working conditions for employees, be a good steward of the environment, and actively work to better the quality of life in the local communities where it operates and in society at large.

No. People tend to have different point of views. Ammoral, immoral and moral.

• Utiliatarion View - If it is good for you, good for the company, and good for the customer, you should do it.
• Individual Rights - Is it fundamentally right to do this to others.
• Justice View - Is it fair and impartial to everyone involved and/or affected?

• Develop and communicate a corporate code of ethics.
• Hire ethical managers.
• Evaluate and promote employees on ethical performance
• Provide employee training and role-playing on ethics in the workplace.
• Encourage whistle blowing and ensure that whistleblowers are kept anonymous.

• Develop a strategic vision
• Conduct a "SWOT" Analysis
• Set Company Objectives
• Craft and overall Corporate Strategy to Allocate Resources among SBU's
• Craft Business-Level Strategies for each SBU within the company
• Forecast Sales and Profits
• Implement Strategis
• Monitor, Review, and Revise as necessary.

• Sometimes an order-of-magnitude change occurs in a company's environment that 1) Dramatically alters its future prospects. 2)Mandates radical revision of is strategic course.
• Ex: Deregulation of the airline industry
• Growth in the use of the internet as a retial outlet.

• Describes the route a company intends to take in developing and strengthing its business.
• Should clearly convey a company's long term direction, rather than hide it in foggy language.

Mission statement say much more about the enterprise's present business scope and purpose - "who we are, what we do, and why we are here."

• It crystallizes senior executives own views about the firm's long-term direction.
• It reduces the risk of rudderless decision making.
• It is a tool for winning support
• Provides a beacon for lower-level managers in forming departmental missions.
• Helps an organization prepare for the future.

• Converts mission into specific performance targets.
• Creates yardsticks to track performance.

• Specific
• Measurable
• Attainable
• Realistic with a Timetable

• Perform at its full potential, delivering the best possible results.
• Push firm to be more inventive.
• Exhibit more urgency to improve its business position.
• Be intentional and focused in its actions.

• Help set corporate direction and overall mission
• Hire and fire CEO and top management.
• Monitor and help supervise top management.
• Review and approve the use of resources
• Take care of shareholders interests.

Strengths, Weaknesses, Opportunities, and Threats.

• Declining Mass Market
• Changing household composition
• Changing pace of life
• Expanding seniors market
• Growing health consciousness

• Potential entrants
• Buyers
• Substitutes
• Suppliers
• Other Stakeholders

• Number of competitors
• Rate of industy growth
• Consumer switching costs
• Amount of fixed costs
• Diversity of rivals.

• "WO Strategies"
• Improvements in product quality
• Changes/ Improvements in service
• Changes/ Improvements in distribution on operations.

• Core Competency - Collection of competencies that the corporation does well. EX: Apple R&D and new product development.
• Distinctive Competency - When a core competency is superior to those of the competition.
• Key Success Factors - Factors that can significantly affect the overall competitve positions of companies within a particular industry.

• A skill, specialized expertise
• Valuable physical assets
• Valuable human assets and intellectual capital
• Valuable organizational assets
• Valuable intangible assets
• Competitively valuable alliances.

• Is the reource strength hard to copy?
• Is the resource strength durable - does it have staying power?
• Is the resource really competitively superior?
• Can the resource strength be trumped by the different resource strengths and competitive capabilities of rivals?

• 1) Inferior or unproven skills, expertise, or intellectual capital.
• 2) Lack of important physical, organiztional, or intangible assets
• 3) Missing capabilities in key success areas.

• 1) Those that match up well with the company's financial and organizational resource capabilities.
• 2) Those that offer the best growth and profitability
• 3) Present and most potential for competitive advantage.

• 1) Correct the improtant weaknesses (those related to industy "key success factors")
• 2) Match a company's distinctive competencies to market opportunities.
• 3)Defend against critical external threats.

Are independent units of that company that are given primary responsibility and authority for strategice management of their own areas. I.E. Product Lines: Coke, Diet Coke, Cherry Coke

• Portfolio analysis allows companies to determine which of the following strategies should be used for each product line/ business unit.
• Growth- Maintenance/stability - Retrenchment/divestment/Sell-out

• Too Simplistic
• It assumes that market growth rate is uncontrollable
• It provides little guidance on specific management strategies.

Company’s craft an overall corporate strategy to allocate resources among SBU’s. Should the corporation’s strategy be one of growth, stability, or retrenchment.

Financial Objectives outcomes focused on improving financial performance, while strategic objectives focus o improving competitive vitality and future business positions.

Placing balanced emphasis on achieving both strategic and financial objectives.

• Is the firm meeting financial objectives and is it an above-average industry performer.
• Trend in stock market price and stockholder value.
• Trend in sales and market share.
• Acquiring and/or retaining customers
• Overall financial strength and credit rating.
• Image and reputation with customers.

• 1. Scrutinize historical income statements and balance sheets.
• 2. Calculate changes that occur in individual categories from year to year, as well as the cumulative total change.
• 3. Determine the changes as a percentage as well as an absolute amount.
• 4. Adjust for inflation (especially if it is a significant factor).
• 5. Benchmark against key competitors and the industry as a whole.

Is a tool that allows a company to compare its performance to other companies within the same industry on key performance indications.

• A low-cost provider strategy.
• A broad differentiation strategy
• A focused (or market niche) strategy based on differentiation.
• A focused (or market niche) strategy based on low costs.
• A best cost provider strategy.

Company managers must scrutinize each cost-creating activity and determine what factors cause costs to be high or low.

• Price competition among rivals’ sellers is vigorous.
• The products of rivals’ sellers are essentially identical and supplies are readily available from any of several eager sellers.
• There are few ways to achieve product differentiation that have value to buyers.
• Most buyers use the product in the same ways.
• Buyers incur low costs in switching their purchases from one seller to another.
• Buyers are large and have significant power to begin down prices.
• Industry newcomers use introductory low prices to attract buyers and build a customer base.

• Buyer needs and uses of the product are diverse.
• There are many ways to differentiate the product or service and many buyers perceive these differences as having value.
• Few rival firms are following a similar differentiation approach.
• Technological change is fast-paced and competition revolves around rapidly evolving product features.

• The target market niche is big enough to be profitable and offers good growth potential.
• Industry leaders do not sec that having a presence in the niche is crucial to their own success.
• It is costly or difficult for multi segment competitions to put capabilities in place to meet the specialized needs of buyers.
• The industry has many different niches and segments, thereby allowing a focuser to pick a competitively attractive niche suited to its resource strengths and capabilities.
• Few, if any, other rivals’ are attempting to specialize in the same target segment.

Works best in markets where product differentiation is the norm and attractively large numbers of value-conscious buyers can be induced to purchase midrange products rather than the cheap basic products of low-cost producers or the expensive products of top-of-the-line differentiators.

The big risk is getting squeezed between the strategies of firms using low-cost and high-end differentiation strategies.