GEB 4890 Final - Part 1 Latest Update

GEB 4890 Final - Part 1 Latest Update Strategy The coordinated set of actions that its managers take in order to outperform the company's competitors and achieve superior profitability. Competitive Advantage Advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices Strategic Advantage Refers to those marketplace benefits that exert a decisive influence on an organization's likelihood of future success. Frequently are sources of an organization's current and future success relative to other providers of similar products Business strategy Primarily concerned with strengthening the company's market position and building competitive advantage in a single-business company or in a single business unit of a diversified multi-business corporation Business model Sets forth the logic for how its strategy will create value for customers and at the same time generate revenues sufficient to cover costs and realize a profit Two Elements of a Business Model - Customer value proposition - Profit formula Vision where you want to be in the future Mission describes what you are here to do Objectives how you're going to reach your goals Financial objectives Targets expressed in money terms such as making a profit, earning income or building wealth. Obligations of an investor-owned company's board of directors - Oversee accounting and make sure they comply with the GAAP - Evaluate senior executives and their leadership skills - Create a compensation plan that rewards top executives for actions and results that serve stakeholder and shareholder interests Porter's Five Forces Model 1) The threat of new entrants 2) Threat of substitutes 3) Bargaining power of suppliers 4) Bargaining power of buyers 5) Existing rivalry Barriers to Entry business practices or conditions that make it difficult for new firms to enter the market Strategic Groups Industry members with similar competitive approaches and positions in the market ("key competitors")