u Test Questions

Strategies

Strategy is all about making choices. It’s about deliberately choosing to be different. It speaks about spelling about a territory where the business seeks to be unique. To survive and flourish in a competitive environment, marked by rapid change, every business has to deliver value by building capabilities that help serve customers better. While doing so, the business needs to separate itself from the crowd and state its value proposition very clearly—how it seeks to use its resources in order to meet a set of goals. Here the business has to be careful in not doing the same thing as rivals, if all you are trying to do is essentially the same thing as your rivals, then it is unlikely that you will be very successful. To achieve success, every business must have a strategy. Strategy, essentially, seeks to answer two questions: where should we compete and how should we compete. If a firm is able to address these two questions successfully, then it can outperform rivals, consistently and deliver superior returns. The purpose of strategy is to create a competitive advantage that generates superior, sustainable financial returns. u Where you want to compete: To create a good strategy, a firm should have an understanding of its own strengths and weaknesses, apart from knowing how the competition works. It must have a clear view of where it wants to compete, based on its own unique capabilities. u How you want to compete: The second choice is about how it wants to operate, the kind of position it wants to take, the type of business model that is needed to execute things and other set of activities required to sustain the business in the long run. Every business has a set of resources that can be put to good use in order to create value and generate superior returns. When the resources are not deployed properly, businesses will collapse under their own weight. Good strategies help a firm position itself in its industry & gain a competitive advantage through an integrated set of actions—aimed at delivering unmatched value to key stakeholders. The choices, it must be remembered, need to be made in an uncertain environment, prioritizing things carefully (because you have finite resources). You cannot be everywhere. If you want to be everywhere, you get killed. Your strategy can fail if you choose a position in the business landscape that is pretty difficult to handle. With your existing set of capabilities that you have, you are unable to adjust or adapt to a dynamic environment and fight competition putting resources and skill sets to best use. You may also trip and fall if the set of actions initiated by you are not fully integrated and & consistent with the position that you have taken in the business landscape. To be useful and effective, a strategy must ensure consistency—striking rapport between internal strengths and external challenges through a coordinated set of activities in an ever-changing environment. Every business must make choices that fit together in a holistic, consistent manner in order to achieve success in a dynamic environment. Those choices are the essence of strategy. It must be clearly understood here that deployment of resources, developing a suitable structure, building an appropriate culture are all important, but strategy is not about these choices. Likewise, cutting costs, boosting productivity etc. are not to be construed as strategy. They are tactics