A winning strategy is one that
A. fits the company’s internal and external situation, builds sustainable competitive advantage, and improves company performance. B. can pass the ethical standards test, the strategic intent test, and the profitability test. C. is highly profitable and boosts the company’s market share. D. builds strategic fit, is socially responsible, and maximizes shareholder wealth.
The Correct Answer and Explanation is :
The correct answer is A. fits the company’s internal and external situation, builds sustainable competitive advantage, and improves company performance.
A winning strategy is multifaceted. It aligns the company’s internal resources, capabilities, and strengths with the external market conditions, creating a fit between what the company can offer and what the market needs or values. This alignment helps a company capitalize on opportunities and avoid or mitigate threats, setting a solid foundation for achieving competitive advantage.
Building a sustainable competitive advantage is essential because it enables the company to stand out in a crowded marketplace. This advantage may stem from unique products, efficient processes, exceptional customer service, or innovative technology, among other factors. What makes it sustainable is that it is not easily replicated by competitors, creating a protective moat around the company’s market position.
Lastly, a winning strategy must contribute to long-term improvement in company performance, not only through profitability but also by establishing a strong market position and achieving stable growth. This involves setting achievable yet challenging objectives that drive performance across various areas like market share, revenue growth, and customer satisfaction.
While the other answer choices touch on elements that can be part of a good strategy, they are either too narrow or emphasize only one aspect of strategic success. For example, focusing solely on profitability (Option C) or shareholder wealth (Option D) can overlook important aspects like alignment with market demands or maintaining a competitive edge. A truly successful strategy, as described in Option A, is comprehensive, adaptable to the company’s unique situation, and creates lasting value, setting it apart as a winning approach in both the short and long term.