Components of Strategy
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In this section we are going to introduce two basic concepts in strategy analysis and
formulation; Critical Success Factors and Critical Value Activities. These two concepts
are highly related in that Critical Success Factors are industry related and can affect the
firm’s competitive position. Critical Value Activities are those that exist within a firm’s
value chain that allow them to address the Critical Success Factors in a given industry.
These activities can be classified in one of three ways: Business Value-added, Customer
Value-added or No Value-added activities. It is the relationship that exists between these
activities that will lead a firm in attaining or sustaining its competitive advantage relative
to the industry’s Critical Success Factors.