Articles on the Basics of Strategy Flashcards
(17 cards)
Name two effects of a clear strategy definition?
- Formulation becomes easier because executives know what they are trying to create
- Implementation becomes much simpler because the strategy’s essence can be readily communicated by everyone in the organization
Name the three components of a good strategy?
- Objective
- Scope
- Advantage
What is a strategy’s objective?
What the strategy is designed to achieve + time frame to reach it in. Should be SMART.
What is meant with scope in strategy?
Part of the landscape in which a firm will operate. Has three dimensions:
- Customer or offering
- Geographic location
- Vertical integration
What is advantage in strategy?
What will your business do better than others.
External: value proposition why target customers should buy your products
Internal: how must activities be aligned so that only your firm can deliver the value proposition
Name the six steps in creating a strategy spine?
- Sources of revenue
- Key assumptions
- Key goals by your time horizon
- Revenue implications by your time horizon
- Necessary support investments
- Additional infrastructure needs?
What is meant with necessary support investments in the strategy spine?
- Articulate investments specific to creating a complete offering for each revenue provider
- Make stakeholders understand connection between current investments and future potential revenue
What is meant with additional infrastructure needs in the strategy spine?
- Investments aimed at keeping things up to date
- Distinguish between stuff you need to invest in to operate in the first place and particulars for your strategy
What is meant with operational effectiveness?
performing similar activities better than rivals perform them. It encompasses any practice allowing a company to better utilize its inputs
What is strategic positioning?
performing different activities from rivals’ or performing similar activities in a different way.
What is the productivity frontier?
sum of all existing best practices at any given time. Can apply to individual activities and business activities, possible of improving it with investments and it shifts outward due to technological advancements.
Name 3 sources of strategic positioning?
- Variety-based positioning: producing a subset of an industry’s products or services
- Needs-based positioning: serving most or all of the needs of a segments
- Access-based positioning: segmenting customers who are accessible in different ways, where configuration of activities to reach them is different
Name two common ways of repositioning to imitate competitors?
- Repositioning itself to match superior performance
- Straddler: matching benefits of a successful position while maintaining its existing position
Name three types of fit?
- Simple consistency between each activity and the overall strategy
- Activities are reinforcing
- Optimization of effort: often by eliminating redundancy and minimize wasted effort
What makes a competitive advantage sustainable?
when strategic positions are built on systems of activities. Activities should complement each other
How is growth a business trap?
One of the biggest traps is growth. Many firms are desperate to grow and enter markets they shouldn’t have. Strategy based on broadening product portfolio and target segments along low prices.
How do firms achieve sustainable growth?
deepening strategic positions by leveraging existing activity systems to offer features or services deemed impossible or too costly by competitors.
To broaden a strategic position, it is best to create stand-alone units with its own brand names and tailored activities.
