Chapter 1 Flashcards
What is the Arena part of the Strategy Diamond?
Area’s in which the company will be active
What are some key components of the Arena?
May encompass products, services, distribution channels, market segments, geographic areas, technologies, and even stages of value creation process. eg. sell through big box, independent dealers and agents.
What is the Vehicle part of the strategy diamond?
Vehicles are the means for participating in targeted arenas.
What are some key components of vehicles?
How will they get there? Internal development, joint ventures, licensing/franchising, alliances, Acquisitions.
What is the differentiator part of the strategy diamond?
Company that understands why its customers regularly choose its products or services over those of the competitors has identified its differentiators.
What are some key components of differentiators?
Image, customization, price, styling, product reliability, speed to market. Feature’s and attributes that makes a company win.
What two critical factors are there for selecting differentiators?
- Decision must be made early. Companies without valuable key differentiators tend to lose market place battles. 2. Tradeoffs and tough choices must be made.Trying to satisfy too broad a spectrum, can comprise and execute poorly on most diemensions.
What is the staging and pacing part of the strategy diamond?
Staging refers to the timing and pace of strategic moves.
What are some key components of staging and pacing?
Speed of expansion, sequence of initiatives. Typically reflects available resources, including cash, human capital, and knowledge.
What drives the staging and pacing?
Several different factors: resources, urgency, credibility, and the need for early wins. Most companies cannot do everything so matching resources with opportunity would be the tradeoff.
What is the economic logic part of the strategy diamond?
It refers to how the company will earn profit.
What are some key components of economic logic?
How will a company make positive returns over and above its capital costs. eg. west jet is able to have cheaper flights by having one type of aircraft, and making the staff more invested by making them part owners.
What is Competitive Advantage?
Providing an offer that the customers find more attractive relative to the cost of creating the offer than the competitors do.
What is strategy?
It’s the means by which a company will achieve its objectives.
Determinants of competitive advantage
Internal perspective - focuses on potential internal sources of uniqueness.
External perspective - focuses on the structure of industries in which companies can position themselves within them for competitive advantage
Dynamic - bridges internal and external perspective. This view shows why companies cannot usually sustain the advantage
