2eIM-LN-Chapter1 - Section 6 Lecture Notes for Chapter 1 C...

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325 Section 6 Lecture Notes for Chapter 1 Chapter 1 Strategy and the Quest for Competitive Advantage Chapter Summary Chapter One explores the concepts surrounding organizational strategy. It begins with an explanation of the term strategy and offers a basis for how to identify a company’s particular strategy. Next, it explores the importance of striving for competitive advantage in the marketplace and examines the role strategy plays in achieving this advantage. The chapter then explores the idea that strategy is partly proactive and partly reactive. This is followed by a close look at the relationship between a company’s strategy and its business model. The chapter proceeds forward with a look at what makes strategy a winner and then presents reasons for why crafting and executing strategy are important. The chapter concludes with thoughts on the equation: good strategy + good strategy execution = good management. Lecture Outline I. The Importance of Managing Strategically 1. Three questions must be answered by managers of all types of organizations: a. Where are we now? b. Where do we want to go? c. How are we going to get there? 2. “Where we are now?” prompts managers to evaluate industry conditions and competitive pressures, the company’s current performance and market standing, its resource strength and capabilities and its competitive weaknesses. 3. “Where do we want to go?” this lies within managements vision of the company’s future direction. It pushes managers to make choices about the direction the company should be headed—what new or different customer groups and customer needs it should endeavor to satisfy, what market positions it needs to be staking out, what changes in its business makeup are needed. 4. “How are we going to get there?” challenges managers to craft and execute a strategy—a full- blown action plan—capable of moving the company in the intended direction, growing its business, and improving its fi nancial and market performance. Core Concept A company’s strategy consists of the competitive moves and business approaches management has developed to attract and please customers, conduct operations, grow the business, and achieve performance objective. 325
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Section 6 Instructor’s Manual for Essentials of Strategic Management 326 II. The Scope of a Company’s Business Strategy 1. The specifi c elements that comprise management’s answer to the question “How are we going to get there?” defi ne a company’s business strategy. Management must have deliberate plans for addressing such issues Changing economic and market conditions. Features and attributes to be included in the company’s products or services. Pricing of the company’s products or services.
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This note was uploaded on 10/28/2011 for the course BUSINESS 205 taught by Professor Lewis during the Spring '11 term at AIB College of Business.

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2eIM-LN-Chapter1 - Section 6 Lecture Notes for Chapter 1 C...

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