Strategy,

Value Chains,

CHAPTER TWO: Business

Initiatives, and
Competitive
Advantage
 STRATEGY

Porter defines business strategy as a broad formula for how a

business is going to compete, what its goals should be, and
what policies will be needed to carry out these goals.

Strategy is a plan to address an issue. A strategy is made up of a series

of planned actions that help make decisions and achieve the best
possible results. The strategy is aimed at achieving an objective by
following a pattern of action.

A strategy comprises a series of tactics that are more concrete

measures to achieve one or more objectives.
 PORTER’S MODEL OF COMPETITION

Porter emphasizes that the essence of formulating competitive

strategy is relating a company to its environment. Porter
identifies five changes in the competitive environment that can
force a company to adjust its business strategy.
 INDUSTRIES, PRODUCTS AND VALUE
PROPOSITIONS

A value proposition is a resource to transmit objectively and directly the

advantages that a company can bring to its customers.
The value proposition relates the most outstanding aspects of a
company and positions it among its consumers, which improves its
ability to solve the problems they have. All this is shown in objective,
transparent and creative content.

Value proposition example:

OXXO

The strong point of its value proposition: to sell the customer the idea that
in their stores they can find practically everything they are looking for. In
addition, their service is available 7 days a week and 24 hours a day.
 STRATEGIES FOR COMPETING

In this sense, there are special strategies for the world of

competitiveness that have the purpose of positioning yourself
above your direct competition, thus capturing the attention of
more customers and increasing sales.
 Differentiation strategy
 leader in prices
 Focus or segmentation
 BUSINESS MODELS

Three elements that a Business Model must A business model is the way
have: that a company or person
creates, delivers and captures
Profitability: No business is set up to lose value for the customer ”
money, therefore it must generate profit.
Alex Osterwalder
Scalability: That one can be assembled today,
another tomorrow and so on until having a
model that conquers the market.

Repeatability: That they can be standardized to

make them replicable anywhere, for example
franchise products.