Managers face three central questions in evaluating their company's business prospects:

What's the company's present situation?,Where does the company need to go from here?, How should it get there?

Strategy

Management's action plan for running the business and conducting operations

A company's strategy is all about how:

how management intends to grow the business
how it will build a loyal clientele and outcompete rivals
how each functional piece of the business will be operated
how performance will be boosted

Companies intent on gaining sales and market share at the expense of competitors, managers typically opt for:

Offensive Strategies

Companies already in a strong industry position are more prone to strategies that:

Emphasize gradual gains in the marketplace

Risk-averse companies often prefer:

"conservative strategies"

A company achieves Sustainable Competitive Advantage when:

an attractive number of buyers prefer its products or services over the offerings of competitors and when the basis for this preference is durable.

4 of the most frequently used and dependable strategic approaches to setting a company apart from rivals, building strong customer loyalty, and winning a sustainable competitive advantage are:

1. Striving to be the industry's low-cost provider (ex: walmart)
2.Creating a differentiation-(can be powerful so long as a company is sufficiently innovative to thwart clever rivals in finding ways to copy)
3. Focusing on serving the special needs and tastes of buyers, comprising a narrow market niche
4. Developing expertise and resource strengths that give the company competitively valuable capabilities that rivals cant easily match, copy, or trump with substitute capabilities.

The best indicators of a company's strategy are:

its actions in the marketplace and the statements of senior managers about the company's current business approaches, future plans, and efforts to strengthen its competitiveness and performance

Changing circumstances and ongoing management efforts to improve the strategy cause a company's strategy to:

evolve over time- a condition that makes crafting a strategy a process, not a one time event

A company's strategy is shaped partly by

management analysis and choice, and partly by the necessity of adapting and learning by doing

The evolving nature of strategy means that the typical company strategy is a blend of:

1. proactive decisions to improve the company's financial performance and secure a competitive edge, and 2. as needed reactions to unanticipated developments of fresh market conditions

A company's business model explains:

the rationale for why its business approach and strategy will be a moneymaker. Absent the ability to deliver good profitability, the strategy is not viable and the survival of the business is in doubt.

3 questions can be used to distinguish a winning strategy from a so-so or flawed strategy:

1. How well does the strategy fit the company's situation?
2. Is the strategy helping the company achieve a sustainable competitive advantage?
3.Is the strategy resulting in better company performance?

Additional Criteria for judging the merits of a particular strategy include:

1. the degree of risk the strategy poses as compared to alternative strategies and
2. the degree to which it is flexible and adaptable to changing circumstances

A strategy focused enterprise is more:

likely to be a strong bottom-line performer than a company whose management team does not take its strategy making responsibilities seriously.