What Is Strategy
Competitive Strategy – Introduction—————————————————————————————————————-The Concept of StrategySources of profit – Profit over the cost, industry attractiveness, competitive advantage: corporate strategy and business strategy respAreas to consider – What Product category, market segment, geographical areas, core technologies, value creation stagesProfit How?Speed of expansion, low cost thru economies of scale – replication advantages, premium prices thru unmatched service.Product featuresHow to get there? Internal development, joint ventures, licensing-franchising, acquisitionsHow to win? Brand image, customization, price, styling, product reliabilityIndustry Organization (I/O) model of above average returns – Firms Strategic choices: Diversification, product differentiation, barriers to market entry, economies of scale, industry concentration, market frictionsResource based model of above average returns – Resources strengths, capability of firm, comp advantages, attractive industry, strategy formulation, superior returns
5 forces -Potential entrants, suppliers, buyers, industry rivalry, substitutesCompetitive Strategy 1—————————————————————————————————————-Structural Determinants of competition – Buyer power – Sensitive to price, Relative bargaining powerThreat of Entry – Capital, Economies of scale, cost advantages, product differentiation, Legal barriers, and retaliationBuyer power – price sensitivity, buyer competition, bargain power – size and concentration, switch cost, buyer ability to backward integrate , Substitue competition, Industry rivalryAttractive industry – high entry barriers, supllier-buyers positions weak, fewer threats from substitutes, moderate rivalry among competitorsSources of Superior ProfitabilityStrategy as Decision Support – Improves the quality of decision making; Strategy as Coordination & Communication – Creates consistency and unity; Strategy as Target – Improves performance by setting high aspirationsChapter 3 – Industry Analysis: The Fundamentals——————————————————————————————————————————————