Test 1-6 capstone.docx - Test 1-6 L1 Strategic Leadership Managing the Strategy-Making Process for Competitive Advantage A Lulu lemon Case Note the

Test 1-6 capstone.docx - Test 1-6 L1 Strategic Leadership...

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Test 1-6 L1: Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage A. Lulu lemon Case: Note the phrase: “It started with a focus on an unmet consumer need” (Yoga pants????) Contrast this with Steve Jobs at Apple: “Creating products that people don’t know that they yet want….” B. GBO: Genuine Business Opportunity a. Effective Demand b. In a sufficient quantity c. At high enough of price d. To produce a profit that is acceptable to the investors…. C. Key Definitions: a. Strategy: A set of related actions that managers take to increase their company’s performance. b. Strategic Leadership: How to most effectively manage a companies’ (organizations) strategy making process to create competitive advantage. The Strategic Planning Process: i. Vision (BHAG) (Describes a future state) ii. Goals (Milestones) (Four main Characteristics) 1. Precise and measureable 2. Address crucial issues (Keep the number reasonable, 4 or 5) 3. Challenging but realistic (BHAG…..achievement oriented) 4. Specify a time period for attainment iii. Strategy iv. Implementation v. Correction c. Risk Capital = Equity (Owner’s equity) i. This is an important definition because the authors refer to “Capital” as Debt plus Equity. 1.What is the difference? 2.Financial leverage: most commonly shown as Debt/Equity Ratio. What kind of ratio is it? Income Statement; Mixed; Balance Sheet? ii. Basic Accounting Formula: (A=L+OE); ratio of any two elements is a measure of financial leverage. d. Operating Leverage: The substitution of Fixed Costs for Variable Costs i. Measured by the ratio of variable costs to fixed costs, or vice versa. ii.What kind of ratio is it? e. Leverage=Risk
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f. Sustained Competitive Advantage: Competitive Advantage that leads to above average profits over a long period of time…..difficult to replicate g. Business Model: Describes how a company will integrate it’s various functional and operational strategies to: i. Select its customers (Market Segment) ii.Define and differentiate its product offerings (Differentiation) iii. Create value for its customers (Lulu lemon) iv. Acquire and keep customers v. Produce goods and services (Manufacture or outsource) vi. Increase productivity and lower costs vii. Deliver goods and services to the market (Supply chain choice vs. direct selling) viii. Organize activities within the company (organization) (Functional, divisional, geographically) ix. Configure its resources (tangible and intangible) x. Attain and sustain a high level of profitability xi. Grow the business (S-Curve f business growth) h. Two basic types of management positons: i. General managers ii. Functional managers i. Mission: describes what the company does: i. Facebook: “Give people the power to share and make the world more open and connected” ii. Ford Motor: “One Team (People working together)”; “One Plan” (Accelerate Product Development, Improve balance Sheet); One Goal (Delivering profitable growth for all) j. Luck (Serendipity) often impacts strategy i. Take advantage of good luck ii. Mitigate the impact of bad luck k.
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  • Winter '14
  • Stoltman

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