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trive to be the industry’s lowcost provider ? WalMart ? Southwest Airlines ?Outpete rivals on a key differentiating feature ? Johnson Johnson – Reliability in baby products ? HarleyDavidson – Kingoftheroad styling ? Rolex – Topoftheline prestige ? MercedesBenz – Engineering design and performance ? . Bean – Good value ? – Wide selection and convenience 114 Competitive Advantage Examples (cont) ? Focus on a narrow market niche ? eBay – Online auctions ? Jiffy Lube International – Quick oil changes ? McAfee – Virus protection auctions ? Starbucks – Premium coffees and coffee drinks ? The Weather Channel – Cable TV ? Develop expertise, resource strengths, and capabilities not easily imitated by rivals ? FedEx – Nextday delivery of small packages ? Walt Disney – Theme park management and family entertainment ? Toyota – Sophisticated production system ? RitzCarlton – Personalized customer service 115 Fig. : Identifying a Company’s Strategy 116 Test Your Knowledge A pany’s strategy and its quest for petitive advantage are tightly related because A. a pany’s strategy determines whether it will have lower or higher costs than rivals and thus be at a petitive advantage or disadvantage. B. petitive advantage is essential to having a profitable business model. C. choosing a petitive advantage to pursue also helps a pany choose which business model is most appropriate. D. petitive advantage enables a pany to achieve its strategic objectives. E. a strategy that leads to sustainable petitive advantage is a pany’s most reliable means of achieving aboveaverage profitability and financial performance. 117 Why Do Strategies Evolve? ?A pany’s strategy is a work in progress ?Changes may be necessary to react to ? Shifting market conditions ? Technological breakthroughs ? Fresh moves of petitors ? Evolving customer preferences ? Emerging market opportunities ? New ideas to improve strategy ? Crisis situations 118 Fig. : A Company’s Strategy Is Partly Proactive and Partly Reactive 119 Crafting Strategy Is an Exercise in Entrepreneurship ? Strategymaking is a marketdriven activity involving ? Studying market trends and petitors’ actions ? Keen observation of customer needs ? Scrutinizing business possibilities based on new technologies ? Building firm’s market position via acquisitions or new product introductions ? Pursuing ways to strengthen firm’s petitive capabilities ? Proactively searching out opportunities to ? Do new things or ? Do existing things in new or better ways 120 Linking Strategy With Ethics ?Ethical and moral standards go beyond ? Prohibitions of law and the language of “thou shalt not” ? to issues of ? Duty and “right” vs. “wrong” ?Ethical and moral standards address “What is the right thing to do?” ?Two criteria of an ethical strategy: ? Does not entail actions and behaviors that cross the line from “should do” to “should not do” and “unsavory” or “shady” and ? Allows managem