MGMT 330: Chapter 4: Planning and Strategic Management – Flashcards

quote: "manager your destiny or someone else will" - 1st isn't always better (e.g., technology advances so fast that the first company to provide a new product is quickly challenged by later entrants offering superior products)

the conscious, systematic process of making decisions about goals and activities that an individual, group, work unit, or organization will pursue in the future.

def: the conscious, systematic process of making decisions about goals and activities that an individual, group, work unit, or organization will pursue in the future a clear map for future activities is cyclic; ongoing, repetitive process

1) situational analysis 2) alt. goals and plans 3) goal and plan eval. 4) goal plan and selection (includes trade-offs) 5) implementation 6) monitor and control

target or end that management desires to reach goals should be SMART: specific, measurable, attainable, relevant, time-bound

actions or means managers intend to use to achieve org. goals

contingency plans that keep service levels high during a crisis can seal a companies reputation for caring about customers

"what if" plans

narrative that describes a particular set of conditions

tying plans to financials is a key element of success

set of procedures for making decisions about org.'s long-term goals and strategies strong external orientation top-level managerial activity 3-7 year time horizon

major targets or results relating to the org.'s log-term survival, value, and growth e.g., growth, increasing market share, improving profitability, boosting return on invest-ment, fostering both quantity and quality of outputs, increasing productivity, improv-ing customer service, and contributing to society should be mutually-reinforcing should come from all levels of the org. arise from strategic vision

pattern of actions and resource allocations designed to achieve the org.'s goals match the org. skills and resources to opportunities in ext. env. all have strengths, weaknesses

1) Where will we be active? 2) How will we get there (e. g., by increasing sales or acquiring another com-pany)? 3) How will we win in the marketplace (e. g., by keeping prices low or offer-ing the best service)?; where and how questions; requires offering better value proposition than the competition 4) How fast will we move and in what sequence will we make changes? 5) How will we obtain financial returns (low costs or premium prices)?

mid-level managerial activity def: set of procedures for translating broad strategic goals and plans into specific goals and plans that are relevant to a distinct portion of the organization, such as a functional area like marketing. e.g., installation of new equipment

def: process of identifying the specific procedures and processes required at lower levels of the org. font-line managerial activity e.g., sprint planning

communicate strategy to all levels of org. & pay attention to what's happening at all levels of the org.

when strategic, tactical, and operation goals are consistent, mutually supportive, and focused on achieving the common purpose and direction

a tool for mangers to communicate their strategic goals that enables every level of the org. to understand their part four key drivers: the skills of its people and their ability to grow and learn; the effectiveness of its internal processes; its ability to deliver value to customers; and ultimately its ability to grow its financial assets shows relationship between practices and long-term success

process that involves managers from all parts of the organization in the formulation and implementation of strategic goals and strategies.

1. Establishment of mission, vision, and goals. 2. Analysis of external opportunities and threats. 3. Analysis of internal strengths and weaknesses. 4. SWOT ( strengths, weaknesses, opportunities, and threats) analysis and strategy formulation. 5. Strategy implementation. 6. Strategic control.

def: org.'s basic purpose and scope of operations clear, concise what org. does, for whom, basic good or service, and its values describes org. as it currently operates

def: long- term direction and strategic intent of a company should inspire, offer worthwhile target for entire org. must have strong leadership support to be meaningful

clarify the org.'s purpose to key constituencies outside of org. help employees focus their talent, energy, and commitment review before seeking employment

strategic management depend upon accurate the thorough eval of competitive & macro env.

def: Groups and individuals who affect and are affected by the achievement of the organization's mission, goals, and strategies. inc. buyers, suppliers, competitors, gov., regulatory agencies, unions, owners and shareholders, trade associations collab w/ key stakeholders can help org. successfully develop and implement strategic plans enviro. analysis should examine economic conditions, tech factors

outperform the intuitive assessments of experts judgment is susceptible to bias subjective judgments are input to quantitative models

diff between opportunity, threat e.g., landfills product methane gas, a fuel

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def: inputs to a system that can enhance performance 1) tangible assets such as real estate, production facilities, raw materials, and so on 2) intangible assets such as company reputation, culture, technical knowledge, and patents as well as accumulated learning and experience. resources produce competitive advantage if... 1) if the resource is instrumental for creating customer value — that is, if it increases the benefits customers derive from a good or service relative to the costs they incur— the resource can lead to a competitive advantage 2) resources are a source of advantage if they are rare and not equally avail-able to all competitors 3) if resources are difficult to imitate, they provide a source of competitive advantage - resources tend to be harder to imitate if they are complex, with many interdependent variables and no obvious links between easily explained behaviors and desired outcomes 4) if resources are well organized, they can enhance a firm's competitive advantage

def: a unique skill and/ or knowledge an organization possesses that gives it an edge over competitors e.g., Federal Express knows logistics - when resources are valuable, rare, inimitable, and organized, they can be viewed as a company's core capabilities. - typically refers to a set of skills or expertise in some activity rather than physical or financial assets

def: understand the " best practices" of other firms thoroughly and to undertake actions to achieve both better performance and lower costs bottom line: aligning a firm's bottom- line practices with best practices can improve its competitiveness. - only helps a company perform as well as its competitors; strategic management ultimately is about surpassing those companies - internal benchmarking: benchmarking different internal operations and departments against one another to disseminate the company's best practices throughout the organization and thereby gain a competitive advantage

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def: a comparison of strengths (e.g., brand), weaknesses (too few suppliers), opportunities, and threats that helps executives formulate strategy strengths, weaknesses = internal resources opportunities, threats = external (macro/competitive env.) - helps managers summarize the relevant, important facts from their external and internal analyses - helps identify the primary and secondary strategic issues an org. faces end goal: capitalizing on the org.'s strengths, neutralize its weaknesses, and countering potential threats - process should continue to evolve through contingency planning - the more uncertainty that exists in the external environment, the more the strategy needs to focus on building internal capabilities through practices such as knowledge sharing and continuous process improvement - self-SWOT helpful

def: set of businesses, markets, or industries in which an organization competes and the distribution of resources among those entities

def: a strategy employed for an organization that operates a single business and competes in a single industry e.g., Safeway

def: acquisition or development of new businesses that produce parts or components of the organization's product - used to eliminate uncertainties and reduce costs associated with suppliers or distributors. - vertical integration is often done to reduce costs

def: strategy used to add new businesses that produce related products or are involved in related markets and activities e.g., Cafe Rio moving into catering - take advantage of their strengths in one business to gain advantage in another

def: strategy used to add new businesses that produce unrelated products or are involved in unrelated markets and activities. - expansion into unrelated businesses GE purchased NBC - some argue hurts more often than helps; concentric diversification strategies usually perform better

def: the diversified business of an org.

high-growth, weak-competitive position = question marks high-growth, strong-competitive position = stars low-growth, strong-competitive position = cash cows low-growth, weak-competitive position = dogs just a tool

mergers and acquisitions

where economies are expanding the fastest (globalization)

find partners rather than add employees, offices, etc.

def: the major actions by which a business competes in a particular industry or market

org. builds competitive advantage by being efficient and offering a standard, no-frills product e.g., Southwest Airlines - usually requires low productions costs - can use size to negotiate favorable prices from suppliers and sell at prices below the competition - take advantage of economies in production & distribution - must be cost leader in industry or market segment

def: a strategy an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions. - often based upon high quality, excellent marketing and distribution, or superior service - more difficult for competitors to imitate

one that competitors are unable or unwilling to imitate

def: strategies implemented by each functional area of the organization to support the organization's business strategy typical functional areas: production, hr, marketing, r, finance, distro - typically developed by functional area executives

- strategies must be implemented efficiently and effectively trend: paricipative strategic management process to impl.; managers at all levels are involved with formulating strategy and identifying and executing ways to implement it

1) define strategic task 2) assess organization capabilities 3) develop and implementation agenda 4) create an implementation plan

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def: a system designed to support managers in evaluating the organization's progress regarding its strategy and, when discrepancies exist, taking corrective action - must develop performance indicators dual responsibility: efficiency, flexibility - divide budget in to strategic & operational?