Arbus 200 - Chapter 4 Flashcards
(19 cards)
4 parts of strategy concept
- customer offering or value proposition
- company’s capabilities
- competitors offerings
- industry context (disruptive forces of technology)
examples of industry context
- globalization
- changing demographics
- climate change
- technology advances
- pandemic
- social media
strategy vs mission/vision/values
Vision: defines the desired future
Mission: outlines the present purpose and how it will achieve the vision
Values: are the core principles and strategy
Strategy: details the plan to achieve the vision and mission
e.g. of strategy is tesla
what is beachhead strategy
- focuses on conquering a small, manageable segment of a market to establish a strong base/gain dominance and expand from there to a more competitive market
Core Company Capabilities - external and internal
- External advantages are how customers would describe a company’s advantages
- Internal advantages are how the company itself would describe its advantages
Customer offering (value proposition)
- begins with core product or service
- expands to extended set of features in the offering
- expands further to the elements of a broader solution
e.g. iphone began with device, extended to innovative interface, and expanded further to itunes store, third party apps etc.
Definition of Porter’s Five Forces Framework
analyzes the competitive environment of an industry and how a business can achieve competitive advantage
List Porter’s Five Forces
- threat of new entrants
- bargaining power of suppliers
- bargaining power of buyers
- threat of substitute products or services
- rivalry among existing competitors
Porter’s Generic Competency Model (how to achieve competitive advantage in the market)
- cost leadership
- cost focus
-differentiation - differentiation focus
cost leadership
- cost efficiency
- competitve manufacturing (cheap raw materials)
- targets entire market e.g. streaming services
- be the most competitive company in cost in the entire market
differentiation strategy
- advantage is its uniqueness
- quality of products or character of the company allows it to target an entire market
- uniqueness is present in all products not just one
- be a distinctive company
cost focus strategy
- competitive in cost for a SPECIFIC product or market niche (trying to be the lowest in a specific segment not the overall market)
- targets niche market segment instead of large markets
Differentiation Focus
- has very unique product, the rest of their products are ordinary
- product targets small market segment
- the segment itself is unique
- e.g. designer bags, Ferrari
Blue Ocean Strategy
- find the untapped market
- get the product on the market before the competitors appear
- create new demand
- get product on market with low cost and unique value before others
e.g. The ordinairy skincare
Red Ocean Strategy
- Enter saturated market
- Differentiate to win over the competitors
- Serve existing demand
- Choose between providing lower cost or special value to customers
e.g. L’oreal
Lean startup principle
- eliminate uncertainty
- work smarter not harder (don’t ask “can this product be built” ask “should it be built?” and “can we build a sustainable business around this product/service”
- develop MVP
- feedback loop
- validated learning
what is the Feedback loop
Build>Measure>Learn
Validated Learning
adapting plans incrementally based on feedback from customers, using the lean startup method
What is the sweet spot in a business strategy?
a compelling offering linked to well-chosen set of target customers supported by powerful capabilities that are uniquely different from the competition
