Lecture 2 What is Strategy

Lecture 2 What is Strategy - Lecture 2 What is Strategy?...

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Lecture 2 What is Strategy? and Firm Performance
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What is Strategy? How does strategic positioning differ from operational effectiveness? Which companies have been successful in strategic positioning? What makes Southwest Airlines and Ikea different? Why does strategic fit matter (Activity maps)?
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What is Strategy? What went wrong with Continental Lite? Why are tradeoffs so important? Why is it difficult to achieve strategic fit? Why do new entrants have advantage in superior positioning? What is growth trap? What happened to Maytag and Neutrogena?
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What is Strategy? Strategy is creation of a unique and valuable position, involving a different set of activities Strategy is making trade-offs in competing Strategy is about not to imitate everything about competitors Strategy is about combining activities and maintaining strategic fit Strategy is about pursuing profitable growth
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Starbucks Pike Creek Store, Seattle (Taken by Andrea Mesko, Summer, 2009)
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Starbucks and Schultz Dominant Logic (1985 - 2000): Key managerial assumptions and beliefs Well-trained, well-compensated baristas deliver high quality coffee and experience 60% turnover compared to 140-400% in fast food industry Company-owned stores Did not franchise to control quality Helped maintain employee expertise & culture; build brand equity
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Changes in Dominant Logic Accelerated growth, penetration of the industry + efficient (fast) service + compromise on quality Baristas push buttons instead of drawing espressos A logistics and efficiency mental model Overtaking quality and premium customer experience model Proliferation of licensing partnerships Airports, smarkets, schools, businesses Maximum distribution of the product = commoditization of experience
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Source: http://brandautopsy.typepad.com/brandautopsy/2007/03/solving_star buc_2.html
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drink a shot of espresso from the new machine that will be introduced into company stores, during a demonstration Wednesday, March 19, 2008, at Starbucks' annual shareholders meeting in Seattle. Helping is Starbucks coffee educator Ann-Marie Kurtz, right. http://hbr.org/2010/07/the-hbr-interview-we-had-to-own-the-mistakes/ar/1
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This note was uploaded on 07/04/2011 for the course MGMT 478 taught by Professor May during the Fall '11 term at South Carolina.

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Lecture 2 What is Strategy - Lecture 2 What is Strategy?...

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