sm chap 001 mba
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MBATRANSCRIPT
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Arthur A Thom
psonMargaret A PeterafJohn E Gamble
A J Strickland IIIArun Jain 1!eCopyright 2012 The McGraw-Hill Companies, Inc.Copyright 2012 The McGraw-Hill Companies, Inc.
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Chapter 1WHAT IS STRATEGY AND WHY IS IT IMPORTANT?
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1$ %nderstand &h' e(er' compan' needs a sound strateg' tocompete successfull') manage the conduct of its business) andstrengthen its prospects for long*term success$
"$ +e(elop an a&areness of the four most dependable strategicapproaches for setting a compan' apart from ri(als and
&inning a sustainable competiti(e ad(antage$
#$ %nderstand that a compan',s strateg' tends to e(ol(e o(ertime because of changing circumstances and ongoingmanagement efforts to impro(e the compan',s strateg'$
-$ .earn &h' it is important for a compan' to ha(e a (iablebusiness model that outlines the compan',s customer (alueproposition and its profit formula$
/$ .earn the three tests of a &inning strateg'$
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WHT !" W# M#$ %& STRATEGY'
( What is o)r present sit)ation'
* %)siness en+ironment an in)stry conitions
* irms /inancial an competiti+e capailities
( Where o we want to go /rom here'
* Creating a +ision /or the /irms /)t)re irection
( How are we going to get there'
* Cra/ting an action planthat will get )s there
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WHT I STRATEGY%"T'
( trategy is all ao)t How3
*Howto o)tcompete ri+als.
*Howto respon to economic an mar4etconitions an growth opport)nities.
*Howto manage /)nctional pieces o/ the
)siness.
*Howto impro+e the /irms /inancial anmar4et per/ormance.
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WH& !" STRATEGY '
( /irm oes strategy3
* To impro+e its /inancial per/ormance.
* To strengthen its competiti+e position.* To gain a s)stainale competiti+e.
a+antage o+er its mar4et ri+als.
( creati+e, istincti+e strategy3* Can yiel ao+e-a+erage pro/its.
* Ma4es competition i//ic)lt /or ri+als.
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STRATEGY$! C"M5#TIT"6
( trategy is ao)t competing differently
/rom ri+als7
* !oing what they ont o or oing it etter8
* !oing what they cant o8
* !oing that which sets the /irm apart an
attracts c)stomers.
* !oing what we sho)lor sho)l noto to
pro)ce a competiti+e ege.
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1$1 Identif'ing a 2ompan',s Strateg'34hat to .ook 5or
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9ey initiati+es o/ the 5lan-to-Win strategy3
: Impro+e resta)rant operations
: //orale pricing
: Wie men) +ariety an e+erage choices
: Con+enience an e;pansion o/ ining opport)nities
: "ngoing resta)rant rein+estment an international
e;pansion
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: Which o/ Mc!onals 5lan-to-Win strategy
initiati+es are associate with meeting
c)stomer nees moreeffectively'
: Which initiati+es are /oc)se on moreefficientlyeli+ering pro)cts an ser+ices'
: Which initiati+es will li4ely res)lt in the most
en)ring competiti+e a+antage'
: Which o/ the initiati+es will competitors li4ely
attempt to o+ercome /irst'
Follow-up
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The
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T6T#GIC 556"CH CH"IC#
.o&*costpro(ider
+ifferentiationon features
5ocus onmarket niche
8est*costpro(ider
8uilding 2ompetiti(e Ad(antage
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T6T#GIC 556"CH#
( %)iling a competiti+e a+antage y3
1. tri+ing to ecome the in)strys low-cost
pro+ier =efficiency>.
2. ")tcompeting ri+als on i//erentiating
/eat)res =effectiveness>.
?. oc)sing on etter ser+ing a niche mar4ets
nees =efficiency and\or effectiveness>.
@. "//ering the lowest =est> prices /or
i//erentiate goos =best-cost provider>.
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GI$I$G TI$%A# C"M5#TITIB#!B$TG#
( How to create a s)stainale competiti+e
a+antage3
* !e+elop +al)ale e;pertise an competiti+e
capailities o+er the long-term that ri+als
cannot reaily copy, match or est.
* 5)t the constant )est /or s)stainale
competiti+e a+antage at center stage incra/ting yo)r strategy.
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Why a irms trategy #+ol+es o+er Time
( Managers moi/y strategy in response to3
* Changing mar4et conitions
*+ancing technology
* resh mo+es o/ competitors
* hi/ting )yer nees
* #merging mar4et opport)nities
* $ew ieas /or impro+ing the strategy
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The #+ol+ing $at)re o/ a irms trategy
( 6ealiDe =c)rrent> strategy is a len o/3
* 5roacti+e=elierate> strategy elements that
incl)e oth contin)e an new initiati+es.* 6eacti+e=emergent> strategy elements that
are re)ire )e to )nanticipate competiti+e
e+elopments an /resh mar4et conitions.
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1$" A 2ompan',s Strateg' Is a 8lend of Proacti(e Initiati(esand 9eacti(e Ad:ustments
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TH# 6#ATI"$HI5 %#TW##$ I6M T6T#G& $! IT %I$#
M"!#A
9eali;ed
Strateg'2ompetiti(eInitiati(es
8usinessApproaches
8usiness
Model
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Companys %)siness Moel
(Howthe )siness will ma4e money 3
* %y pro+iing c)stomers with +al)e.
The /irms c)stomer +al)e proposition
* %y generating re+en)es s)//icient to co+er
costs an pro)ce attracti+e pro/its.
The /irms pro/it /orm)la
It takes a proven business modelone tat
yields appealin! profitabilityto demonstrate
viability of a firm"s strate!y#
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%)siness Moel #lements
( The C)stomer Bal)e 5roposition
* atis/ying )yer wants an nees at a price
c)stomers will consier a goo +al)e.
The greater the +al)e pro+ie =B> an
the lower the price =5>, the more
attracti+e the +al)e proposition is to
c)stomers.
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%)siness Moel #lements =cont>
( The 5ro/it orm)la
* Creating a cost str)ct)re that allows /or
acceptale pro/its, gi+en that pricing is
tie to the c)stomer +al)e proposition. B7the +al)e pro+ie to c)stomers
57the price charge to c)stomers
C7the /irms costs* The lower the costs =C> /or a gi+en c)stomer
+al)e proposition =BE5>, the greater the aility
o/ the )siness moel to e a moneyma4er.
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I "6 T6T#G& WI$$#6'
4inningStrateg'
The Strategic5it Test
The 2ompetiti(eAd(antage Test
The PerformanceTest
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WHT M9# T6T#G& WI$$#6'
( winning strategy m)st pass three tests3* The it Test
!oes it e;hiit ynamic /it with the e;ternal an
internal aspects o/ the /irms o+erall sit)ation'* The Competiti+e +antage Test
Can it help the /irm achie+e a signi/icant an
s)stainale competiti+e a+antage'
* The 5er/ormance Test Can it pro)ce goo per/ormance as meas)re
y the /irms pro/itaility, /inancial an
competiti+e strengths, an mar4et staning'
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Who listens to the raio anymore'
: Gi+en the shi/ts in how people listen to m)sic, are
the )siness moels o/ iri)s FM an o+er-the-air
roacasters +iale o+er the long term'
: !oes ir)s FMs strategy pass the three tests o/ a
winning strategy' !oes the strategy o/ o+er-the-air
roacasters pass the same tests'
: What internal an e;ternal /actors will create
i//ic)lties /or either competitor in changing its
strategy or )siness moel'
Follow-up
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WH& C6TI$G $! #F#CTI$GT6T#G& 6# IM5"6T$T T9
( trategy pro+ies3
* prescription /or oing )siness.
* roa map to competiti+e a+antage.* game plan /or pleasing c)stomers.
* /orm)la /or attaining long-term stano)t
mar4etplace per/ormance.
Good Strate!y $ Good Strate!y E%ecution &
Goo Management
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THI$9I$G T6T#GICAA&
( Googles we rowser-ase Chrome operating
system an its online applications s)ite are now
challenging Microso/ts long-term ominance o/
those mar4etplace sectors.* What sho)l e Microso/ts /irst response to this
competiti+e challenge'
* How will Microso/ts response to this competitors
actions a//ect its )siness moel'
* Which competitors strategy will li4ely e the e+ent)al
winner in the mar4etplace'
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TH# 6"! H#!
( trategy is ao)t as4ing the right )estions3
* What m)st managers o, an o well, to ma4e a
/irm a winner in the mar4etplace'
( trategy re)ires getting the right answers3* Goo strategic thin4ing an goo management o/
the strategy-ma4ing, strategy-e;ec)ting process.
* irst-rate capailities an s4ills in cra/ting an
e;ec)ting strategy are essential to managing
s)ccess/)lly.
'elcome and best (ises for your success)