Podcast
Questions and Answers
Who is the founder of the Boston Consulting Group?
Who is the founder of the Boston Consulting Group?
Competitive strategy is about ensuring that all activities are the same across different businesses.
Competitive strategy is about ensuring that all activities are the same across different businesses.
False
What is the primary focus of a strategy in a firm?
What is the primary focus of a strategy in a firm?
What is the primary aim when establishing a strategy according to the provided definitions?
What is the primary aim when establishing a strategy according to the provided definitions?
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Sustainable competitive advantage refers to consistently outperforming competitors in the long term.
Sustainable competitive advantage refers to consistently outperforming competitors in the long term.
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What is one action a firm can take to capitalize on growth opportunities?
What is one action a firm can take to capitalize on growth opportunities?
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According to the definitions, strategy involves a deliberate search for a _____ of action.
According to the definitions, strategy involves a deliberate search for a _____ of action.
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Match the following definitions with their corresponding authors:
Match the following definitions with their corresponding authors:
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Strategic actions are essential for how a firm can compete against its _____ .
Strategic actions are essential for how a firm can compete against its _____ .
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Match the following key terms with their definitions:
Match the following key terms with their definitions:
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What defines competitive advantage?
What defines competitive advantage?
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Competitive disadvantage occurs when a company outperforms its competitors.
Competitive disadvantage occurs when a company outperforms its competitors.
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How is the economic value created calculated?
How is the economic value created calculated?
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The formula for economic value created is: ________ - ________.
The formula for economic value created is: ________ - ________.
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Match the types of competitive advantage with their descriptions:
Match the types of competitive advantage with their descriptions:
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Which of the following increases profit potential in competitive advantage?
Which of the following increases profit potential in competitive advantage?
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Decreasing supplier’s opportunity cost can allow a company to offer lower prices without losing customers.
Decreasing supplier’s opportunity cost can allow a company to offer lower prices without losing customers.
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What happens when both supplier's opportunity cost decreases and buyer's willingness to pay increases at the same time?
What happens when both supplier's opportunity cost decreases and buyer's willingness to pay increases at the same time?
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Study Notes
Strategic Thinking in a Complex World - Session 1
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Definitions of Strategy:
- Strategy is a deliberate plan to develop a business's competitive advantage. (Bruce Henderson, Boston Consulting Group)
- Competitive strategy is about choosing different activities to deliver a unique value mix. (Michael Porter, Harvard Business School)
- A company's strategy is a set of actions managers take to outperform competitors and achieve superior profitability. (Textbook Thompson et al.)
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Discussion on Strategy:
- Strategy is different from chess or warfare, despite similarities.
Content of Strategy
- Positioning: How to position the firm in the marketplace.
- Attracting customers: How to attract and retain customers.
- Competing against rivals: How to compete effectively in a competitive market.
- Performance targets: Achieving the firm's performance targets.
- Capitalizing on opportunities: Seizing opportunities for growth.
- Responding to changes: Adapting to economic and market conditions.
Strategic Actions
- Strengthening bargaining position: Improving bargaining power with suppliers, distributors, etc.
- Gaining market share: Increasing sales and market share through improved features, design, quality, or customer service.
- Gaining market share through lower prices: Exploiting lower costs to offer lower prices.
- Upgrading resources and capabilities: Enhancing necessary resources/capabilities.
- Managing key activities: Efficiently managing research, production, sales, marketing, finance, etc.
- Strategic alliances: Forming beneficial partnerships.
- Entering/exiting markets: Entering new markets or exiting existing ones.
- Capturing opportunities/defending against threats: Utilizing new markets or opportunities, and defending against outside threats.
- Acquisitions/mergers: Strategically making acquisitions and/or mergers.
The Aim of Strategy
- Creating and sustaining competitive advantage: Aiming to maintain a significant edge over competitors.
- Superior profitability: Outperforming rivals to gain superior profitability.
- Delivering unique mix of value: Devising a unique value proposition.
- Being different: Distinguishing the company from competitors.
Competitive Advantage - Key Terminology
- Competitive advantage: Superior performance relative to competitors.
- Sustainable competitive advantage: Outperforming competitors over a prolonged period.
- Competitive parity: Equal performance of two or more companies.
- Competitive disadvantage: Underperforming relative to competitors.
Competitive Advantage Foundations
- Economic Value Created: Buyer's willingness to pay minus the supplier's opportunity cost.
- Profit Potential: A result of the economic value created.
Types of Competitive Advantage
- Differentiation advantage: Increased buyer's willingness to pay without a significant increase in supplier cost, enabling premium pricing.
- Cost advantage: Decreased supplier cost without compromising buyer willingness to pay, enabling lower pricing.
- Dual advantage: Decreasing supplier cost and simultaneously increasing buyer's willingness to pay.
The 5 Generic Strategies
- There are five general categories for competitive strategies.
- Low-cost, Differentiation, Broad-cost leadership, Focused cost leadeship, Focused differentiation, Best-cost provider.
Generic Strategies: Examples
- Provided slide examples of diverse companies using different generic strategies. (e.g., Crêperie Saint-Georges, LIDL, Bugatti, Costco, IKEA)
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Description
Explore the fundamental concepts of strategy through key definitions and discussions. This session covers positioning, attracting customers, competing against rivals, and achieving performance targets. Dive into the intricacies of strategic thinking essential for business success.
