Sowt Analysis

In: Business and Management

Submitted By blaine
Words 6317
Pages 26
Strategic MT Study Sheets

Chapter 1

A strategy consists of competitive moves and business approaches used by managers to run the company. It is their action plan to grow the business, attract and please customers, compete successfully, conduct operations and to achieve target levels of organizational performance. It needs to appeal to customers and to help the company carve out its own market position. It uses efficiency and effectiveness to guide a company using as few resources as possible. It deals with initiatives.

Strategic management is setting a company’s strategy to differentiate itself within the industry and developing a competitive advantage, as well as altering it as needed.

A company achieves a sustainable competitive advantage when an attractive number of buyers prefer its products/services over those of rivals and when the basis for this preference can be maintained over time.

Four ways to attain that strategic advantage: low-cost provider, product differentiation, focusing on a narrow market niche/distinctive competency, develop specialties that are hard to duplicate.

Three strategic questions:
1) What is the company’s present situation? Use SWOT and “where are we now?”
2) Where does the company go from here? What is its direction?
3) How will we get there? This is the strategy.

Strategies evolve because of shifting market conditions, technological breakthroughs, competitors’ moves, evolving customer preferences, emerging market opportunities, new ideas to improve strategy and crisis situations.

A business model considers how to make money through the business. It checks to see if the company’s strategy will return income.

Testing a winning strategy:
1) Goodness of fit test: How well does strategy fit the firm’s situation?
2) Competitive advantage test: does strategy lead to sustainable competitive advantage?

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