C HAPTER ONE I NTRODUCTION & O VERVIEW continue 1

What is a strategy? A company’s strategy is the game plan management is using to stake out a market position, attract and please customers, compete successfully, conduct operations and achieve organization objectives. The task of crafting and executing company strategy are the heart and soul of managing a business enterprise and wining in the marketplace. 2

What is a strategy? Indicates the choices its managers have made among alternative markets, competitive approaches, and ways of operating. It is partly the result of trial and error organization learning about what worked in the past and what didn’t and partly the product of managerial analysis and strategic thinking about all the circumstances surrounding the company’s situation. 3

Striving for Competitive Advantage Strengthen the company’s long-term competitive position and financial performance. Offensive elements Direct challenges to competitors' market positions and seek to establish a competitive edge. Defensive elements Defending against competitive pressures, the maneuvers of rivals, and other developments that threaten the company’s well-being. 4

Striving for Competitive Advantage Four of the most frequently used strategic approaches to building competitive advantage are: Striving to be the industry’s low-cost provider, thereby aiming for a cost-based competitive advantage over rivals. Outcompeting rivals based on such differentiating features as high quality, wide product selection, reliable performance, excellent service, attractive styling, technological superiority, or unusually good value for the money. Focus a narrow market niche and winning a competitive edge by doing a better job than rivals of satisfying the special needs and tastes of buyers comprising the niche. Developing expertise and resource strengths that give the company competitive capabilities rivals can’t easily imitate or trump with capabilities of their own. 5

Strategy A company’s strategy is typically a blend of Proactive and purposeful action on the part of company managers As-needed reactions to unanticipated developments and fresh market conditions. A company’s actual strategy is partly proactive and partly reactive to changing circumstances. 6

A Company’s Strategy Evolves over time Constantly developing external and internal events make it common place for managers to initiate fresh strategic moves and business approaches of one kind or another. “ A company’s strategy is a work in progress” Disruptive to the organization and confusing to customer – if keep on changing. Persistently tweaking a basic sound strategy to keep freshly tuned to changing market circumstances offers greater rewards. 7

A Company’s Strategy Evolves over time Changing circumstances dictate that a company’s strategy change and evolve over time – a condition that makes strategy an ongoing process, not a one-time event. When strategy is clearly failing, market conditions or buyer preferences are undergoing significant change – an opening is appearing for new strategy elements with powerful buyer appeal, competitor are doing something that demands a dramatic response, Company is being hit with a major financial crisis – fine tuning the existing strategy is not enough – A major strategy shift is called for. 8

A Company’s Strategy Evolves over time Neither the market and competitive conditions nor the company’s situation stay the same for long, company managers are obligated to continually reevaluate their strategy, re-crafting it as often and as extensively as they feel is needed to keep in step with changing times. 9