Components of Strategy

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.