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Define strategy. Strategy is managements’ comprehensive plan for accomplishing organizational goals. Furthermore, strategic management is an ongoing process aimed at formulating and implementing strategies that achieve organizational goals effectively and efficiently. |
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Explain why the goal of strategy is to attain superior performance. In order for an organization to survive and beat competitors, an organization’s strategy is to attain superior performance by outperforming competitors for scarce resources and providing superior product or service offerings valued by consumers –all measured by high profitability and profit growth over time. |
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Describe what is meant by competitive advantage. Competitive advantage is an organization’s distinctive competence or competencies that cannot easily be imitated by rivals and are sustained over a long period of time. The competitive advantage can come from the ability of an organization to lower costs relative to competitors or the ability to differentiate its product or service offerings from that of its rivals. |
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Explain how business-level strategy can lead to competitive advantage. A business-level strategy is an organization’s strategic focus on a particular industry or market while capitalizing on the organization’s core competencies. A decision of differentiation, low-cost leadership, or focus strategy is made on how the organization is to compete within each focused or targeted markets. Decisions on which segments to serve and how to segment the markets are made for each industry served. Furthermore, an organization’s business-level strategy can be different for each of its product or service offerings in order to achieve competitive advantage. |
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Explain how operations strategy can lead to competitive advantage. An operations strategy is implementing the business-level strategy through decisions that continually improve operational efficiency in the value chain of primary and support activities including production, marketing and sales, logistics, R & D, human resources, information systems, and organizational infrastructure. Creating value for customers from each of these areas is critical in capturing a sustainable competitive advantage. For example, a firm’s customer service may be a premier core competency unmatched by rivals. |
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Explain how corporate-level strategy can lead to competitive advantage. A corporate-level strategy is an organization’s overall strategy that simultaneously governs its operation over all of the organization’s industries and markets, both domestically and internationally. Corporate-level strategy decisions involve knowing which businesses the organization will be in and how to enter new businesses and markets. Competitive advantage can be achieved by acquiring missing needed competencies from other organizations through, joint-ventures, acquisitions, or mergers. |