GBA 490 ch 1 notes
GBA 490 ch 1 notes GBA 490
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This 2 page Class Notes was uploaded by Sody Gentry on Sunday September 11, 2016. The Class Notes belongs to GBA 490 at University of Alabama - Tuscaloosa taught by Joyce L. Meyer in Fall 2016. Since its upload, it has received 3 views. For similar materials see Strategic Management in Business at University of Alabama - Tuscaloosa.
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Date Created: 09/11/16
Ch. 1 WHAT IS STRATEGY and WHY IS IT IMPORTANT A company’s strategy is the set of actions that its managers take to outperform the company’s competitors and achieve superior profitability Strategy is all about How: How to attract and please customers How to compete against rivals How to position the company in the marketplace and capitalize on attractive opportunities to grow the business How to respond to changing economic and market conditions How to manage each functional piece of the business How to achieve the company’s performance targets Strategy is about competing differently from rivals— Doing what rival firms don’t do or what rival firms cant do o Appealing to buyers in ways that set a company apart from its rivals o Staking out a market position that is not crowded with strong competitors Competitive Advantage Meeting customer needs more effectively and efficiently Giving buyers what they perceive as superior value compared to the offerings of rival sellers or giving buyers the same value as others at a lower cost to the firm. Sustainable Competitive Advantage If it persists despite the best efforts of competitors to match or surpass this advantage. Strategies for Building Sustainable Competitive Advantage Low- Cost Provider Focused Low-Cost Best- Cost Provider Focused Differentiation Broad Differentiation Managers modify strategy in response to: Means: “pay attention to what’s going on out there” A company’s strategy tends to evolve because of changing circumstances and ongoing efforts by management to improve the strategy Realized (current) strategy is a blend of: Proactive: anticipating market and competition changes in advance of their actual occurrence and making appropriate organizational shifts in response. Reactive: changing in response to what someone else is doing The Profit Formula Creating a cost structure that allows for acceptable profits, given that pricing is tied to the customer value proposition. o V—the value provided to customers o P—the price charged to customers o C—the firm’s costs A company’s business model sets for the logic for how its strategy will create value for customers and at the same time generate revenues sufficient to cover costs and realize a profit 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. Strategy is about asking the right questions Strategy requires getting the right answers