What Is Strategy

The integrative management field that combines analysis, formulation and implementation in the quest for competitive advantage

A set of goal-directed actions a firm takes tog ain and sustain superior performance relative to competitors

A diagnosis of the competive challenge - analysis of the firm's external and internal environments. Guiding policy to adresse the competitive challenge - accomplished through strategy formulation. A set of coherant actions to implement the firm's guiding policy

Stock appreciation. Tesla underperforms when it comes to generating profts. Losses are common for startups espicially if the business requires arge upfront investments.

The firm needs to formulate an effective guiding policy in response. The formulated strategy needs to be consitent, often backed up with strategic commitments such as sizeable investments or changes to an porganisation's incenticve and reward system - big changes that cannot bve reversed. Without consist in the firm's guiding policy, employees become and cannot make effective day-to-day decisons that support the overall strategy. Also investors can become frustrated

Build a cost-competitve mass-market. $5 billion investment in a new lithium-ion battery plant in Nevada. Factory in Shanghai

A firm that achieves superior perfornce relative to other competitors in the same industry or the industry avergae has a competitve advantage

A firm that is bke to outerform its competitors or the industry average over a prolonged period of time has a sustainable competitve advantage

If a firm underperforms its rivals or the industry average it has a competitive disadvantage. For example, a 15 percent return on invested capital. In the consulting industry, though, where the average returnon invested capital is often above 20 percent.

Should two or more firms perform at the same level, they have competitive parity

A firm needs to provide either goods or services consumers value more highly than those of its competitors, or similar goods at a lower cost. Rewards are profitablity and market share

Strategy is about delievrig superior value while containing the cost or offering similar value at a lower cost. Managers achieve these combinatins of value and cost through strategic positioning

Firm stakes out a unique position withan an industry that allows the firm to provide value to customers while controlling costs. Positioning requires trade-offs

Statements of desire provide little managerial guidance and are not strategy

Organisations, groups and individuals that can affect or be affected by a firm's actions

Employees, stockholders, board members

Customers, suppliers, alliance partners, creditors, unions, communities, governments, media

An integrative approach to managing a diverse set of stakeholders effectively in order to gain and sustain competitve advantage

Provides a decision tool with which strategic leaders can recognise, prioritise and address the needs of different stakehholder. Heps the firm to achieve a competitive advantage while acting as a good corporate citizen

A stakeholder has power over a company, a stakeholder has a legitimate claim, a stakeholder has an urgent claim

Identify stakeholders

Identify stakeholder interests and claims

Identify opportunities and threats

Identify social responsibilities. Notion of CSR.

Economic. Legal - laws and regulations. Ethical - going beyond what is required by law. Philanthropic- idea of corporate citizenship

Address stakeholder concerns

Details a set of action that managers take to gain and sustain competitve advantage

Analysis, Formulation, Implementation

Stregoc leadership and the strategy process. External analysis, Internal analysis, compettive advantage, firm performance anjd business models

Business, corporate and global strategy

Organisational design and corporate governace and business ethics