5 Global Strategy Debate_1

5 Global Strategy Debate_1 - Crafting and Executing...

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Crafting and Executing Strategy!
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Management's action plan for running the business & conducting operations. Crafting a strategy = a managerial commitment to pursue a particular set of actions
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STRATEGY = Competitive Moves and Business Approaches managers employ
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Five Forces – Competitive Analysis
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Sustainable Competitive Advantage = when (an attractive number of) buyers prefer products/services over the offerings of competitors. LASTING PREFERENCE Strong buyer preference leads to higher sales volume and/or the ability to charge a higher price.
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Taking the offensive approach launching fresh initiatives, one kind offerings, or making the company's product offering more distinctive and appealing
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Companies in a strong industry position are more prone to defensive strategies emphasize gradual gains - protecting market positioning Risk-averse companies often prefer "conservative" strategies following the successful moves other companies willing to take the risks
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Early bird vs second mouse What about switching costs?
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To set a company apart from rivals and win a sustainable competitive advantage which are: 1. Low-cost Provider 2. Differentiation-based Advantage 3. Serving a Niche Market 4. Developing Expertise & Resource Strengths
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Achieve low-cost advantages by underpricing competitors. Positioning within the industry as to have the “lowest price” How is this achieved??? How does this impact the industry??? Southwest Airlines - no frills flights!
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Differentiate according to: higher quality, wider product selection, added performance, value-added services, more attractive styling, technological superiority, or unusually good value for the money.
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The company needs to be innovative and creative to discourage copycats. Once a differentiation method is chosen - can it be altered??? Rolex Porsche Amazon China and Thailand are currently among the world’s biggest violators of intellectual property rights. In Latin America, about 68% of all software is pirated, and in China alone, 86% of software is pirated! http://www.youtube.com/watch?v=P4j240yhZpk
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Niche - specialized market needs requires specialized products/services
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Must develop expertise and/or have valuable capabilities that rivals can not match. FedEx = next-day delivery capabilities FedEx = next-day delivery capabilities Dell = manufacturing capabilities (JIT inventory) Dell = manufacturing capabilities (JIT inventory) Four Seasons = guest services capabilities Four Seasons = guest services capabilities
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Indicators = actions in the marketplace and statements by senior managers Steve Jobs
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Time, circumstances, and people change - therefore so does strategy Strategies evolve according t o: Market Conditions Advancing Technology Competitor’s Moves Buyer Needs/Preferences Emerging Market Opportunities New Ideas Strategies evolve according t o: Market Conditions Advancing Technology Competitor’s Moves Buyer Needs/Preferences Emerging Market Opportunities New Ideas
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5 Global Strategy Debate_1 - Crafting and Executing...

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