Introduction

Question 1

What is competitive advantage

Answer 1

Relative Measure, superior performance relative to other competitors in the industry.

Strategic positioning with superior performance creates superior value

In an attempt to cover all, management may lose sight and lose its strategic positioning, fail to capture value - failed to consider strategic tradeoffs

Question 2

Creating value for customers mean?

Answer 2

It means meeting the needs of target customers

Means combining a set of activities to stake out a unique strategic position within an industry

Involves facing up to competitive challenges from both new entrants and current incumbents

Value driven by firm performance is anchored by industry effects and firm effects

Industry: underlying economic structure of industry
Firm: actions managers taken resulting in differences among companies within the same industry

Question 3

What is strategy

Answer 3

Firm’s overall efforts to gain and sustain competitive advantage
AFI framework
Analyse - External & Internal analyses
Formulate - Business strategy (cost or differentiation), Corporate Strategy (where should the firm compete: industry, markets and geography), Global Strategy (local, national, international)
Implement - Executing the strategy