Crafting and Executing Strategy: MBA 690 -01
Test 1 Study Guide: Chapters 1 – 8
Strategy consists of competitive moves and business approaches used by managers to run the company. Management’s action plan:
Grow the business
Attract and please customers
Choosing the “how’s” of strategy
Trial and error
The 6 how’s of strategy:
How to grow your business
How to please customers
How to outcompete rivals
How to manage each functional piece of the business
How to respond to changing market conditions
How to achieve targeted levels of performance
Sustainable competitive advantage – when attractive to a number of buyers
Key elements of a successful strategy - developing a successful strategy hinges on making competitive moves aimed at: a.
Appealing to buyers in ways that set the enterprise apart b.
Involves developing a distinctive aha moment
A company’s strategy is:
Partly proactive – ahead & new
Partly reactive – adaptive & review
Strategy & Ethics - Allows managers to fulfill its ethical duties to all stakeholders
Strategy & Ethics – duty and right vs. wrong
Role of senior executives – linking strategy with ethics – make it clear that all employees are to act with integrity
Addresses – how do we make money in this business
Do the revenue-cost-profit economics make good business sense i.
Associated cost structure
Potential profit margins
Will earning streams and ROI indicate business model viability 11.
Business Model vs. Strategy
Strategy – deals with a company’s competitive initiatives and business approaches b.
Business Model – concerns whether revenues and costs flowing from the strategy demonstrate a business can be amply profitable and viable
Tests of a Winning Strategy
Goodness of fit – firms situation
Competitive Advantage – sustainable competitive advantage c.
Performance – boosts firms performance
What is the strategy-making strategy-executing process?
Develop a strategic vision
Set an objective
Craft a strategy to achieve the vision and objective
Implement and execute strategy
Monitor developments, evaluate performance, make corrective adjustments
Strategic vision – describes the route a company intends to take in developing and strengthening its business, it lays out the company’s strategic course for preparing for the future
7 characteristics of an effectively worded strategic vision:
Easy to communicate
6 characteristics of an ineffectively worded strategic vision:
Vague or incomplete
Not forward looking
To reliant on superlatives
Strategic Vision vs. Mission
Strategic Vision – concerns a firm’s future business path b.
Mission – concerns a firm’s present business path
Characteristics of Strategic Intent
Grandiose performance project
Relentless commitment to achieving a particular market position and competitive standing
Strategic intent – the relentless pursuit of an ambitious (bold and grandiose) strategic objective
Balanced score card – measures company performance
Sets financial and strategic objectives
Places balance on achieving both types of objectives
Tasks of Business Strategy
Produce successful performance
Build sustainable competitive advantage
Competitively valuable competencies and capabilities
Strategic activities of functional areas
Approval of business strategies
Overcoming resistance to a new strategic vision entails: a.
Addressing employee’s concerns head-on
Reiterating basis for new...
Please join StudyMode to read the full document