Professional Documents
Culture Documents
What Is Strategy and Why Is It Important? What Is Strategy and Why Is It Important?
What Is Strategy and Why Is It Important? What Is Strategy and Why Is It Important?
What Is Strategy and Why Is It Important? What Is Strategy and Why Is It Important?
1-1
Chapter Roadmap
What Is Strategy?
Identifying a Company’s Strategy
Strategy and the Quest for Competitive Advantage
Strategy Is Partly Proactive and Partly Reactive
Strategy and Ethics: Passing the Test of Moral Scrutiny
The Relationship Between a Company’s Strategy and Its
Business Model
What Makes a Strategy a Winner?
1-6
Striving for
Competitive Advantage
To achieve sustainable competitive advantage, a
company’s strategy usually must be aimed at either
Providinga distinctive product or service or
Developing competitive capabilities rivals can not match
Achieving a sustainable competitive advantage greatly
enhances a company’s prospects for
Winning in the marketplace and
Realizing above-average profits
1-8
Fig. 1.2: A Company’s Strategy Is Partly
Proactive and Partly Reactive
1-9
Why Do Strategies Evolve?
A company’s strategy is a work in progress
Technological breakthroughs
Crisis situations
1-10
Linking Strategy With Ethics
Ethical and moral standards go beyond
1-13
Relationship Between
Strategy and Business Model
Strategy - Deals with a Business Model
company’s competitive -Concerns whether
initiatives and business revenues and costs flowing
approaches from the strategy
demonstrate the business
can be amply profitable
teg
y and viable
S tra ss
ne l
i
s e
Bu od
M
1-14
Tests of a Winning Strategy
GOODNESS OF FIT TEST
PERFORMANCE TEST
1-18
Levels of Strategy-Making
in a Diversified Company
Corporate-Level Corporate
Managers Strategy
Two-Way Influence
Business-Level
Business Strategies
Managers
Two-Way Influence
Functional
Functional Strategies
Managers
Two-Way Influence
Operating
Managers Operating Strategies
1-19
Levels of Strategy-Making in
a Single-Business Company
Business-Level
Business
Managers Strategy
Two-Way Influence
Functional
Functional Strategies
Managers
Two-Way Influence
Operating
Managers Operating Strategies
1-20
Tasks of Corporate Strategy
Moves to achieve diversification
Establishing investment
priorities and steering
corporate resources into the
most attractive businesses
1-21
Tasks of Business Strategy
Initiating approaches to produce successful performance
in a specific business
Crafting competitive moves to build
sustainable competitive advantage
Developing competitively valuable
competencies and capabilities
Uniting strategic activities of functional areas
Delegation of responsibility
to frontline managers
1-24