Crafting & Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases18 Edition, 2012
Arthur A. Thompson, Jr., The University of Alabama
Margaret A. Peteraf, Dartmouth College
John E. Gamble, University of South Alabama
A. J. Strickland III, The University of Alabama
PART ONE Concepts and Techniques for Crafting and Executing Strategy
Section A: Introduction and Overview
Chapter 1: What Is Strategy and Why Is It Important? Key Points of the Chapter
Power Point Presentation
Chapter 2: Charting a Company’s Direction: Vision and Mission, Objectives, and Strategy - Key Points of the Chapter
Section B: Core Concepts and Analytical Tools
Chapter 3: Evaluating a Company’s External Environment - Key Points of the Chapter
Chapter 4: Evaluating a Company’s Resources, Capabilities, and Competitiveness - Key Points of the Chapter
Section C: Crafting a Strategy
Chapter 5: The Five Generic Competitive Strategies: Which One to Employ? - Key Points of the Chapter
Chapter 6: Strengthening a Company’s Competitive Position: Strategic Moves, Timing, and Scope of Operations - Key Points of the Chapter
Chapter 7: Strategies for Competing in International Markets - Key Points of the Chapter
Chapter 8: Corporate Strategy: Diversification and the Multibusiness Company - Key Points of the Chapter
Chapter 9: Ethics, Corporate Social Responsibility, Environmental Sustainability, and Strategy - Key Points of the Chapter
Section D: Executing the Strategy
Chapter 10: Building an Organization Capable of Good Strategy Execution: People, Capabilities, and Structure - Key Points of the Chapter
Chapter 11: Managing Internal Operations: Actions That Promote Good Strategy Execution - Key Points of the Chapter
Chapter 12: Corporate Culture and Leadership: Keys to Good Strategy Execution - Key Points of the Chapter
What Is Strategy and Why Is It Important?
A company's strategy is the game plan management is using to stake out a market position, attract and please customers, conduct its operations, compete successfully, and achieve the desired performance targets.
Company has to identify a product - target marketing combination where it will be able to occupy a durable position for a long time to come. In that position, it should be able to attract the attention of potential customers, bring them to buy and use its products and satisfy their needs through its product-services combination. The customers are expected to repeat their purchases. The company needs operations function which will produce and distribute the product with features and services that the customers value. In the product-target position occupied by a company, competitors may already be there, or new competitors may emerge and try to imitate its products and services. The company must be able develop a competitive advantage that allows to it provide that something extra which will make customers loyal. The company needs a price point at which there is adequate demand and company's capability to produce and distribute the product at a required profit at that price point.
A company achieves a sustainable competitive advantage and remain in business for a long time, when it can meet customer needs more effectively or efficiently than rivals and the basis for this is durable, despite the best efforts of competitors to match or surpass this advantage.
A company is producing goods and service to meet a customer needs. The needs are felt by the customer first and these needs become wants for a specific product and brand.
A company's strategy typically evolves over time, emerging from a blend of (1) proactive and deliberate actions on the part of company managers to improve the strategy and (2) reactive, as-needed adaptive responses to unanticipated developments and fresh market conditions.
A company's business model is management's story line for how the strategy will be a moneymaker. It contains two crucial elements: (1) the customer value proposition —a plan for satisfying customer wants and needs at a price customers will consider good value, and (2) the profit formula —a plan for a cost structure that will enable the company to deliver the customer value proposition profitably. In effect, a company's business model sets forth the economic logic for making money in a particular business, given the company's current strategy.
A winning strategy will pass three tests: (1) Fit (external, internal, and dynamic consistency), (2) Competitive Advantage (durable competitive advantage), and (3) Performance (outstanding financial and market performance).
Crafting and executing strategy are core management functions. How well a company performs and the degree of market success it enjoys are directly attributable to the caliber of its strategy and the proficiency with which the strategy is executed.