Contemporary Business Strategy
Contemporary Business Strategy BCOR 460
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This 3 page Class Notes was uploaded by Mrs. Lavada Turcotte on Saturday September 12, 2015. The Class Notes belongs to BCOR 460 at West Virginia University taught by Gary Insch in Fall. Since its upload, it has received 13 views. For similar materials see /class/202810/bcor-460-west-virginia-university in Business at West Virginia University.
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Date Created: 09/12/15
1 2 3 What is Strategy P0rter lecture BCOR 460 Class 2 Hypercompetition is a selfin icted wound What does this mean By constantly focusing on efficiencies companies are not focusing on competitive positioning Hence companies are improving efficiency yet because their competitors are doing the same thing profit margins are falling due to price pressures and little differentiation Terms Do you know them a U C D 39D 395 IQ Total Quality Management A management approach that focuses organizationwide attention on delivering total quality to customers and includes 1 employee involvement39 2 focus on the customer39 3 benchmarking and 4 continuous improvement Defect prevention not detection Benchmarking The continuous process of measuring products services and practices against major competitors or industry leaders Timebase Competition A strategy of competition based on the ability to deliver products and services faster than the competition Outsourcing The contracting out of a company s inhouse function to a preferred vendor Partnering Joining forces assets equity etc with another entity to in order to accomplish strategic goals share risk and costs of new product development and RampD greater market access andor gain access to critical core competencies Reengineering Radically redesigning business processes to achieve dramatic improvements in cost quality service and speed Change Management Concept that describes managing the organizational change process by which companies alter their strategy and structure to improve performance Managed through a series of stages Recognize need for change39 Decide ideal future state39 Develop change plan39 Analyze and Remove obstacles to change39 Implement change39 Evaluate change to assess its effects on organizational performance What is the Productivity Frontier Why is it important Productivity Frontier is the sum of all existing best practices at any given time Think of it as the maximum value that a company delivering a particular product or service can create at a given cost using the best available technologies skills management techniques and purchased inputs 4 5 6 7 8 What is the Essence of Strategy The essence of strategy is choosing to perform activities differently than rivals do A company can outperform rivals only if it can establish a difference that it can preserve What is positioning Placing product or service in a particular market space Process of perceiving new positions that woo customers from established positions or draw new customers into the market Not necessarily mutually exclusive Varietybased subset of products niche Jiffy Lube Vanguard Mutual Funds Needsbased Groups of customers of differing needs and tailored set of activities can serve those needs Bessemer Trust Citibank Private Bankers Closest to traditional target customers Accessbased Based on geography or customer scale niche Carmike Theaters only in towns under 200000 Smaller airlines larger airlines What is Strategy The creation of a unique and valuable position involving a different set of activities How do competitors often according to Porter try to copy its successful rivals a Competitor can reposition itself to match the superior performer JC Penny Sears b Straddler seeks to match the benefits of a successful position while maintaining its existing position Continental and Continental Lite Why are TradeOffs important Difficult to be all things to all people Reasons for Types of Tradeoffs a Inconsistencies in image or reputation Company known for one kind of value may lack credibility or confuse customers if it delivers another kind Ivory Soap vs Neutrogena b Activities themselves different positions with their tailored activities require different product configurations equipment employee behavior skills management systems Ikea on low cost selfserve less like full service furniture store c Limits on Internal Coordination and Control Can only do so many things well Do not want to confuse customers or employees with regards to service product etc Continental Lite lessons Positioning choices determine not only which activities a company will perform and how it will configure individual activities but also how activities relate to one another 9 What is Strategic Fit The alignment of all the assets of a company with each other stakeholder needs and their environment to achieve superior performance Simple consistency between activity and overall strategy Activities that are reinforcing Optimization of effort coordination and information exchange across activities product design coordination with suppliers etc 06 10 What is Sustainable Competitive Advantage a Unique competitive position for the company b Activities tailored to strategy c Clear tradeoffs and choices visavis competitors d Competitive advantage arises from fit across activities e Sustainability comes from activity system f Operational effectiveness is a given But my definition for this class is a Unique Rare b Valuable c Not easily imitated or substituted