LO 1-1 / Explain the role of strategy in a
firm’s quest for competitive advantage.
■ Strategy is the set of goal-directed actions a firm
takes to gain and sustain superior performance
relative to competitors.
■ A good strategy enables a firm to achieve superior
performance. It consists of three elements:
1. A diagnosis of the competitive challenge.
2. A guiding policy to address the competitive
challenge.
3. A set of coherent actions to implement the
firm’s guiding policy.