Management Chapter 6:Strategic Management – Flashcards
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Business Plan
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A document that outlines a proposed firm's goals, the strategy for achieving them, and the standards for measuring success.
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Strategy
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A large-scale action plan that sets the direction for an organization.
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Strategic Management
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A process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals.
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Why Strategic Management & Strategic Planning Are Important?
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An organization should adopt strategic management and strategic planning for three reasons: They can provide direction and momentum, encourage new deas and above all develop a sustainable competitive advantage.
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Strategic Positioning
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Attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. "Performing different activities from rivals, or performing similar activities different ways"
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The Five Steps of the Strategic-Management Process
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Establish the mission and the vision, establish the grand strategy with environmental scanning, formulate the strategic plans, carry out the strategic plans, and maintain strategic control.
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Grand Strategy
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After an assessment of current organization performance, then explains how the organization's mission is to be accomplished. Focuses on growth, stability and defensive.
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Growth Strategy
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is a grand strategy that involves expansion-as in sales revenues, market share, number of employees or number of customers or (for nonprofits) clients served.
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The Stability Strategy
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is a grand strategy that involves little or no significant change.
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The Defensive Strategy
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is a grand strategy that involves reduction in the organization's efforts.
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Strategy Formulation
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is the process of choosing among different strategies and altering them to best fir the organization's needs.
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Strategic control
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consist of monitoring the execution of strategy and making adjustments if necessary. Focus on the following: engage people, keep it simple, stay focused, keep moving.
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Competitive intelligence
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Means gaining information about one's competitor's activities so that you can anticipate their moves and react appropriately.
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Environmental Scanning
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careful monitoring of an organization's internal and external environments to detect early signs of opportunities and threats that may influence the firm's plans.
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SWOT Analysis
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search for the strengths, weaknesses, opportunities, and threats affecting the organization. Provide a realistic understanding of your organization in relation to its internal and external environments so you can better formulate strategy in pursuit of its mission.
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Forecast
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Is a vision or projection of the future
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Trend Analysis
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Hypothetical extension of a past series of events into the future.
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Contingency plan
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the creation of alternative hypothetical but equally likely future conditions.
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Porter's Five Competitive Forces
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business-level strategies originate in five primary competitive forces in the firm environment: threats of new entrants, bargaining power of suppliers, bargaining power of buyers, threats of substitute products or services and rivalry among competitors.
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Porter's Four Competitive Strategies
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cost leadership, differentiation, cost-focus, and focused-differentiation
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Cost leadership strategy
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to keep the costs, and hence prices of a product or service below those of competitors and to target a wide market.
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Differentiation strategy
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is to offer products or services that are of unique and superior value compared with those of competitors but to target a wide market.
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Cost-Focus strategy
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to keep the costs and hence prices of a product or service below those of competitors and to target a narrow market.
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Focused-differentiation Strategy
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is to offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market.
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Single product strategy
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a company makes and sells only one product within its market
