Business Strategy

Business Strategy


Choosing the right strategy:
Differentiation vs. Cost leadership

Professor: Manfred Brauchle
Benjamín Necker
Alan Tchimino
In this essay, we will discuss the competitive advantage leaning on the books of Michael Porter "Competitive Strategy" and "competitive advantage ", and also describe the five competitive strategies, explaining what is each strategy about. We will give an example of an existing company that is already operating with high success, and we will explain why and how they achieved this important position in the market.
First of all, how can we define strategy?
“Strategy means making clear-cut choices about how to compete” Jack Welch, former CEO , General Electric
“A strategy is a commitment to undertake one set of actions rather than another” Sharon Oster, Professor, Yale university
“Without a strategy, the organization is like a ship without a rudder” Joel Ross. Professor
What do we mean by strategy?
For us, the most accurate definition: A company´s strategy is management´s action plan for running the business and conducting operations. The crafting of a strategy represents a managerial commitment to pursue a particular set of actions in growing the business, attracting and pleasing customers, competing successfully, and finally improving the company´s financial and market performance.

When evaluating the company´s businesses prospects managers face three central questions:
What is the company´s present situation? Prompts managers to evaluate industry conditions and competitive pressures, the company’s current performance and market standing, its resource strengths and capabilities and its competitive weakness.
Where does the company need to go from here? Pushes managers to make choices about the direction the company should be headed.

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