Question details

A company’s answer to “how will we get there?” is its strategy Consists of
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Service Management Review questions answers:

1.

Briefly define each of the following terms:

a)

Strategy

A company’s answer to “how will we get there?” is its strategy Consists of

competitive

moves

and

business approaches

used by managers to run the company

Management’s

“action plan”

to:

Grow the business Attract and please customers Compete successfully

Conduct operations Achieve the targeted levels of organizational performance

The How’s That Define a Firm's Strategy

How

to grow the business

How

to please customers

How

to outcompete rivals

How

to manage each functional

Strategy is not a detailed plan or program of instructions;

it is

‘ a unifying theme that gives coherence and direction to the actions and decisions of

an individual or an organisation’.

b)

Sustainable competitive advantage

A company achieves

sustainable competitive advantage

when

An attractive number of buyers prefer its products/services over those of

rivals

and

The basis for this preference is durable

c)

Business model

A business model addresses

“How do we make money in this business?”

Is the company’s strategy capable of delivering

good bottom-line results?

Do the

revenue-cost-profit economics

of the strategy make good business sense?

Look at

revenue streams

the

strategy is expected to produce

Look at associated

cost structure

and potential

profit margins

Do resulting earnings streams and ROI indicate the strategy has good potential to deliver

acceptable profitability?

2.

Identify and briefly describe the four most frequently used strategic approaches to achieving a

sustainable competitive advantage. Provide examples.

Be the industry’s

low-cost provider

Achieve a cost-based competitive advantage

Wal-Mart

Southwest Airlines

 

 

 

Incorporate

differentiating features

Superior product/service keyed to higher quality, better

performance, wider selection, value-added services, or some other attribute

Johnson & Johnson

– Reliability in baby products

Harley-Davidson

– King-of-the-road styling

Rolex

– Top-of-the-line prestige

BMW

– Engineering design and performance

Amazon.com

– Wide selection and convenience

Focus on a

narrow market niche

Win a competitive edge by doing a

better job than rivals of serving the

needs and preferences of buyers in the niche

eBay

– Online auctions

Best Buy

– Home electronics

McAfee

– Virus protection

Starbucks

– Premium coffees and coffee drinks

The Weather Channel

– Info about the weather

Develop

expertise and resource strengths

not easily imitated or matched by rivals Achieve a

capabilities-based competitive advantage

Walt Disney

– Theme park management and family entertainment

Dell Computer

– Build-to-order manufacturing capabilities

Ritz-Carlton

– Personalized customer service

3.

.

Why does a company’s strategy tend to evolve over time?

A company’s

strategy

is a

work in progress

Changes

may be

necessary

to

react

to

Financial crisis

Fresh moves of competitors

Evolving customer preferences

Technological breakthroughs

Emerging market opportunities

Changing political or economic climate

New ideas to improve strategy

4.

Why is a company’s strategy partly proactive and partly reactive?

 

Available solutions