Class Notes: Understanding Winning Strategies for Companies
I. To summarize last night's lecture, the following points (from Gamble, Peteraf, etc.) should be highlighted:
A. A company's strategy is its action plan for outperforming its competitors and achieving superior profitability
B. The central thrust of a company's strategy is undertaking moves to build and strengthen the company's long-term competitive position and financial performance by competing differently from rivals and gaining a sustainable competitive advantage over them
C. A company achieves competitive advantage when it provides buyers with superior value compared to rival sellers or offers the same value at a lower cost to the firm. The advantage is sustainable if it persists despite the best efforts of competitors to match or surpass this advantage
D. A company's strategy typically evolves over time, emerging from a blend of (1) proactive deliberate actions on the part of company managers to improve the strategy, and (2) reactive emergent responses to unanticipated developments and fresh market conditions
E. A company's business model sets forth the logic for how its strategy will create value for customers, while at the same time generate revenues sufficient to cover costs and realize a profit. Thus, it contains two crucial elements: (1) the customer value proposition - a plan for satisfying customer wants and needs at a price customers will consider good value, and (2) the profit formula - a plan for a cost structure that will enable the company to deliver the customer value proposition profitably
F. A winning strategy will pass three tests: (1) Fit (external, internal and dynamic consistency), (2) Competitive Advantage (durable competitive advantage), and (3) Performance (outstanding financial and market performance).
G. Crafting and executing strategy are core management functions. How well a company performs and the degree of market success it enjoys are directly attributable to the caliber of its strategy and the proficiency with which the strategy
A. A company's strategy is its action plan for outperforming its competitors and achieving superior profitability
B. The central thrust of a company's strategy is undertaking moves to build and strengthen the company's long-term competitive position and financial performance by competing differently from rivals and gaining a sustainable competitive advantage over them
C. A company achieves competitive advantage when it provides buyers with superior value compared to rival sellers or offers the same value at a lower cost to the firm. The advantage is sustainable if it persists despite the best efforts of competitors to match or surpass this advantage
D. A company's strategy typically evolves over time, emerging from a blend of (1) proactive deliberate actions on the part of company managers to improve the strategy, and (2) reactive emergent responses to unanticipated developments and fresh market conditions
E. A company's business model sets forth the logic for how its strategy will create value for customers, while at the same time generate revenues sufficient to cover costs and realize a profit. Thus, it contains two crucial elements: (1) the customer value proposition - a plan for satisfying customer wants and needs at a price customers will consider good value, and (2) the profit formula - a plan for a cost structure that will enable the company to deliver the customer value proposition profitably
F. A winning strategy will pass three tests: (1) Fit (external, internal and dynamic consistency), (2) Competitive Advantage (durable competitive advantage), and (3) Performance (outstanding financial and market performance).
G. Crafting and executing strategy are core management functions. How well a company performs and the degree of market success it enjoys are directly attributable to the caliber of its strategy and the proficiency with which the strategy