Crafting Competitive Advantage: Navigating Strategic Management and Business Strategy

Competitive Strategy/Strategic Management And the BUSINESS STRATEGY TEMPLATE MGMT 475 WB1 KEY CONCEPTS/TERMS STRATEGYTACTICSCOMPETITIVE STRATEGY CORPORATE STRATEGYFUNCTIONAL STRATEGYSTRATEGIC ALIGNMENT/FIT STRATEGIC MANAGEMENTCOMPETITIVE ADVANTAGEDISTINCTIVENESS PRODUCT FOCUSGEOGRAPHIC MARKET FOCUSTARGET CUSTOMERS VALUE PROPOSITIONBUSINESS MODEL Strategy: In the broadest sense, a strategy is a plan (i.e. set of interrelated choices) for achieving desired outcomes or goal. When strategy is planned, it is termed ‘deliberate’; if not planned but seen through choices and actions, it is referred to as emergent. For any single, specific desired goal, a person or entity has only ONE STRATEGY. But, a firm has many levels and layers of different objectives. Each division, department, team, functional area, etc. will have their own specific goal. Thus, within a firm there is a set of different strategies operating across levels and segments of the organization. HOWEVER, we are focusing on the entire firm…the entire enterprise. The desired outcome of a commercial firm is to achieve and sustain competitive advantage, that is, superior long-term economic performance. That outcome is the focus of the discipline of strategic management. That is, strategic management refers to managing the choices and variables relevant to achieving and defending a sustained (long-term) competitive advantage, which again is observed by sustained superior performance compared to peers (industry average). There are multiple levels and types of strategy that are distinct when talking about business enterprises. Competitive strategy is the set of choices made or actions taken directed at successfully compete in a specific industry (product-market). It represents a firm’s intended means of achieving competitive advantage in their specific market or industry. It should be obvious, then, that for a firm’s strategy to be considered successful (i.e. achieve superior results as compared to its rivals), a firm’s strategy must involve something distinctive. The firm must attract customers away from its rivals and do so in a way to capture value and reinvest in staying ahead of competitors. Successful firms have or do something different that is meaningful, valuable, and defensible. Corporate strategy refers to the choices and actions to manage two or more distinctive business units within the same firm, each with a different competitive strategy. For example, General Electric competes in the wind turbine industry, the locomotive engine industry, the medical equipment industry, etc. Each business unit has a competitive strategy for its specific product-market. Overall, however, GE has a corporate-level strategy on how to manage this portfolio of businesses. The aim of corporate strategy is to optimize the performance of the combined portfolio. Thus, corporate strategy involves decisions about what businesses to be in, how to allocate resources across units, how to create and exploit synergies across units, etc. Functional-level strategies are specific to the aims of an individual functional department (such as marketing or human resources). For example, to support the overall competitive strategy of Starbuck, the Human Resources department might have a strategy to attract, develop, and retain high quality baristas and store managers. The marketing strategy may focus on building brand recognition and customer loyalty. Each functional area of a firm plays a distinctive role, and each therefore has a specific purpose and aim it is trying to achieve to support the overall performance and goal achievement of the firm. Thus, each has a strategy for achieving their functional goal. In this capstone, integrate course, we will focus of competitive strategy. That i