Strategy
Concept of how firms will achieve its objectives
External vs Internal Strategic Analysis
External: Industry/competitor analysis
Internal: Resource based view
Mission vs Objective
Mission: Fundamental purpose/values
- View of the future
Objective: Specific targets
- Measurable outcomes
AVDSE
5 Elements of Strategy
- Arenas
- Vehicles
- Differentiators
- Staging
- Economic Logic
Arenas
Where?
- Product categories
- Market segment
- Geographic areas
Vehicles
How will we get there?
- What means will we use to attain the needed presence in the chosen arena
- How will we grow/market ourselves
Differentiators
How will we win?
- How do we differentiate ourselves from competitors to attract customers
- Requires choices & trade-offs
Staging
What will be our speed & sequence of moves?
- Order & speed of implementing initiatives
Economic Logic
How will we obtain our returns?
- Analysis of costs, expected profits, returns, etc.
3 Types of Industry Structures
Fragmented: Many firms, low entry barriers, competitive pricing
In Between: Few firms, shared dominance (oligopoly)
Consolidated: 1 dominant firm (monopoly )
Internal Analysis - Is this resource..? (4)
- Valuable
- Rare
- Easily Substituted
- Inimitable/Unique
Barriers to Imitation (3)
- Restrictive Access (patents, trademarks, lack of access to resources)
- Path Dependency (Brand loyalty)
- Causal Ambiguity (Culture, reputation, trust)
5 Forces that Shape Strategy
- Competitive rivalry within an industry
- Threat of new/potential entrants
- Bargaining power of suppliers
- Bargaining power of buyers
- Threat of substitute products
