Crafting and Executing Startegy (Chapter 1)

1398 Words6 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

More about Crafting and Executing Startegy (Chapter 1)

Open Document