Crafting and Executing Startegy (Chapter 1)

1398 WordsOct 18, 20126 Pages
CHAPTER 1 WHAT IS STRATEGY AND WHY IS IT IMPORTANT? 1. Understand why every company needs a sound strategy to compete successfully, manage the conduct of its business, and strengthen its prospects for long-term success. 2. Develop an awareness of the four most dependable strategic approaches for setting a company apart from rivals and winning a sustainable competitive advantage. 3. Understand that a company’s strategy tends to evolve over time because of changing circumstances and ongoing management efforts to improve the company’s strategy. 4. Learn why it is important for a company to have a viable business model that outlines the company’s customer value proposition and its profit formula. 5. Learn the three tests of a winning…show more content…
All rights reserved. 1–20 IS OUR STRATEGY A WINNER? The Strategic Fit Test The Competitive Advantage Test Winning Strategy Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. The Performance Test 1–21 WHAT MAKES A STRATEGY A WINNER? ♦ A winning strategy must pass three tests: ● ● ● The Fit Test Does it exhibit dynamic fit with the external and internal aspects of the firm’s overall situation? The Competitive Advantage Test Can it help the firm achieve a significant and sustainable competitive advantage? The Performance Test Can it produce good performance as measured by the firm’s profitability, financial and competitive strengths, and market standing? Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. 1–22 WHY CRAFTING AND EXECUTING STRATEGY ARE IMPORTANT TASKS ♦ Strategy provides: A prescription for doing business. ● A road map to competitive advantage. ● A game plan for pleasing customers. ● A formula for attaining long-term standout marketplace performance. ● Good Strategy + Good Strategy Execution = Good Management Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. 1–23 THINKING STRATEGICALLY ♦ Google’s web browser-based Chrome operating system and its online applications suite are now challenging Microsoft’s long-term dominance of those marketplace sectors. ● What should be Microsoft’s first response to this competitive challenge? ● How will Microsoft’s response to this

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