Chapter I

WHAT IS STRATEGY AND WHY IS IT IMPORTANT?

 I. What is Strategy?

bullet A company's strategy consists of the competitive moves and business approaches that managers employ to attract and please customers, compete successfully, grow the business, conduct operations, and achieve targeted objectives.

 

II. Identifying a Company's Strategy

bullet See Fig. 1.1, page 6
bullet Company executives typically lay out key elements of their strategy in presentations to security analysts

 

III.  Strategy and the Quest for Competitive Advantage

bullet A company achieves sustainable competitive advantage when an attractive number of buyers prefer its products/services over offerings of competitors and when this preference is durable.

 

IV. Strategy is Partly Proactive and Partly Reactive

bullet See Fig. 1.2, page 8
bullet A company's strategy emerges incrementally and then evolves over time
bullet Crafting strategy calls for good entrepreneurship

 

V. The Relationship Between a Company's Strategy and its Business Model

bullet A company's strategy relates broadly to its competitive initiatives and business approaches while a company's business model deals with whether the revenue and costs flowing form the strategy demonstrate business viability

 

VI. What Makes a Strategy a Winner?

bullet Must ask three questions:
bullet How well does the strategy fit the situation?
bullet Is the strategy helping the company achieve a sustained competitive advantage?
bullet Is the strategy resulting in better company performance?

 

VII. Why are Crafting and Executing Strategy Important?

bullet Need managers to shape/craft how company's business will be conducted
bullet Strategy-focused organization will be strong bottom line performer
bullet Good strategy and good execution equals good management

 

Next Steps:  Please review the PowerPoint Overview slides (1-10) for this chapter.  Then proceed to the Lecture Notes for chapter two.

 
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