The five components of a business strategy are: target market, competitive positioning, value creation modes, financial returns, and timing approach.

According to the text, a business strategy consists of five equally important components. The target market defines which products and services a firm offers, to which customers, and in which geographical regions. Competitive positioning describes how a firm plans to win the market by differentiating through product or service quality and price. Value creation modes determine how a firm installs effective business processes, potentially through internal development, acquisitions, partnerships, or outsourcing. Financial returns outline how the firm will become profitable through revenue generation and cost advantages. The timing approach states the strategy's time horizon and the sequence of planned core actions for execution.

Key points

Target market: which products and services are offered to which customers in which regions.
Competitive positioning: how to differentiate through value-price ratio, quality, and price.
Value creation modes: how to realize well-functioning value creation processes.
Financial returns: how to generate profit through revenue and cost advantages.
Timing approach: the overall time horizon and sequence of executed actions.

What are the five components of a business strategy according to the text?

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