Business strategy
Business strategy
- A strategy is a long-term plan to reach the firm's main objectives.
- Strategic management = setting the plan, acting on it, and checking it.
- Good strategy builds a competitive advantage — a reason customers choose you (lower cost or a better product).
Practice
A competitive advantage is:
Competitive advantage (e.g. lower cost or a better product) makes customers pick you over rivals.
Practice
A strategy is a long-term plan to reach a firm's objectives.
Strategy is long-term; tactics are the short-term actions that carry it out.
SWOT analysis
| Internal | External |
|---|---|
| strengths — what it does well | opportunities — chances to grow |
| weaknesses — what it does poorly | threats — dangers it faces |
- Use strengths to take opportunities; fix or protect against weaknesses and threats.
- Tools like decision trees weigh choices by their likely results.
Practice
Classify each SWOT element.
Strengths/weaknesses are internal; opportunities/threats are external.
You've got it
Key idea
- a strategy is a long-term plan; good strategy builds a competitive advantage
- SWOT: Strengths + Weaknesses (internal); Opportunities + Threats (external)
- use strengths for opportunities; manage weaknesses and threats