Essentials of Strategic Management Ch.1

Strategies three central questions?
Where are we now? Where do we want to go from here? How are we going to get there?
A level of strategy: Corporate Strategy
In what business or businesses are we or should we be?
A level of strategy: Business Strategy
How should we compete in a particular level?
A level of strategy: Functional area strategy
How do we implement the chosen strategy?
A level of strategy: Operating strategy
What specific actions should each operating unit take?
Ways strategies can evolve over time?
Incrementally, dramatically, adaptively (reactive), and proactively
Strategy
consists of the competitive moves and approaches management has developed to attract and please customers, conduct operations, grow the business, and achieve performance objectives.
Business model
management’s blueprint for delivering a product or service to customers that will generate revenues sufficient to cover costs and yield an attractive profit.
Customer value proposition
A type of business model element that firms use for satisfying buyer wants and needs at a perceived good value.
Profit Formula
A type of business model element a firm sets out how cost structure will allow for acceptable profits given the pricing tied to its customer value proposition.
Fit (Test of a winning strategy)
How well does the strategy fit the company’s situation?
Competitive Advantage (Test of a winning strategy)
Is the company achieving sustainable competitive advantage?
Performance (Test of a winning strategy)
Is the strategy producing good company performance?
Strategic Management
is the process by which managers analyze the internal and external environments for the purpose of formulating strategies and allocating resources to develop a competitive advantage in an industry that allows successful achievement of organizational goals
Key Characteristics of Strategic Management
ongoing in nature, dynamic rather than static, oriented to the present and the future, concerned with conditions both inside and outside the firm, and concerned with performing well and satisfying stakeholders.
Primary stakeholders
employees, creditors, customers, distributors, suppliers, and shareholders.
Secondary Stakeholders
General public, government, and local communities
S.W.O.T.
Strengths, Weaknesses (Internal), opportunities, threats (External)
Vision
A firms vision outlines what the organization wants to be or how it wants the world to be in the future. Long-term and future oriented
Mission
A firms mission defines its current scope and purpose what it is, what it does, and why it exists. Short-term and oriented to the present and near future.
Values
Drive an organization culture and priorities and provide a frame work in which decisions are made.
Enacted Values
what value you actually follow
Espoused Values
What people say its important to them
Sub-goals
Distal goals- long-term and Proximal goals- short-term.
Objectives
Are an organization performance targets, the results management wants to achieve
Financial objectives
focus on shorter-term financial outcomes
Strategic objectives
focus on the content of strategic actions rather than the outcome.
S.M.A.R.T.
Specific, Measurable, Attainable, Realistic, and Timely
Balanced Score Card
This approach combines the use of both strategic and financial objectives, tracks their achievement and gives management a more complete and balanced view of how well an organization is performing.
Strength
A company’s patent
Threat
Shift in consumer tastes away from the firms products.
weakness
Poor reputation with customers
Strength
exclusive access to natural resources
Threat
Emergence of substitute products
Strength
Strong brand names
Opportunity
Unfulfilled customer need
Weakness
Lack of access to key distribution channels
Opportunity/Threat
Arrival of new technology
Opportunity/Threat
Loosening on industry regulations
Opportunity/Threat
Removal of trade barriers