management 301 chapter 6

strategy
is a large-scale action plan that sets the direction for an organization
strategy management
is a process that involves managers from all parts of organization in the formulation and the implementation of strategies and strategic goals
strategic positioning
attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company
What Portor means by strategic positioning
it means performing different activities from rivals, or performing similar activities in different ways
1. Strategy is the creation of a Unique & Valuable Position
2. Strategy Requires trade-offs in competing
3. Strategy involves creating a “Fit” among activities
What are the 3 key principles that underlie strategic positioning
Being responsive to customers
Innovation
Quality
Effectiveness
4 areas an organization should stay ahead to achieve sustainable competitive advantage
Few needs, many customers
Strategic position can be derived from serving the few needs of many customers
Broad needs, few customers
A strategic position may be based on serving the broad needs of just a few customers.
1. Establish the mission and the vision
2. Establish the grand strategy with environmental scanning
3. Formulate the strategic plans
4.Carry out the strategic plans
5. Maintain strategic control
Bonus part: revise actions, based on feedback
The five steps of the strategic-management process
1. The Growth Strategy
2. The Stability Strategy
3. The Defense Strategy
What are the 3 grand strategies?
Growth Strategy
is a grand strategy that involves expansion-as in sales revenues, market share, number of employees, or number of customers or clients served.
The Stability Strategy
Is a grand strategy taht involves little or no significant change
The Defensive Strategy (retrenchment strategy)
is a grand strategy that involves reduction in the organizations efforts.
SWOT analysis (situational analysis)
is a search for the strengths, weaknesses, opportunities, and threats affecting the organization.
SWOT internal analysis
Strengths – what are our key assets & skills?
Weaknesses – what don’t we do well relative to competitors?
SWOT external analysis
Opportunities – based on external analysis what could we do in the future?
Threats – what external issues should we worry about?
Porters model for industry analysis
business-level strategies originate in 5 promary competitive forces in the firms environment:
1.threats of new entrants,
2. bargaining power of suppliers
3. bargaining power of buyers
4. threats of substitute products or services
5. rivalry among competitors
Cost-leadership strategy
is to keep the costs and hence prices of a product or service below those of competitors and to target a wide market
The Differentiation strategy
is to offer products and services that are of unique and superior value compared with those of competitors but to target a wide market
Cost-focus strategy
is to keep the costs, and hence prices, of a product or service below those of competitors and to target a narrow market
Focused differentiation strategy
is to offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market
The BCG Matrix
is a means of evaluating strategic business units on the basis of
1.their business growth rates and
2 their share of the market
single product strategy
a company makes and sells only one product within its market
the benefit-focus of single product strategy
Making just one product allows you to focus your manufacturing and marketing efforts just on that product
the risk-vulnerability
the risk of course is that if you do not focus on all aspects of the business, if a rival gets the jump on you, or if an act of god intervenes your entire business may go under
Diversification
operating several businesses in order to spread the risk
unrelated diversification
operating several businesses under one ownership that are not related to one antoher
related diversification
in which an organization under one ownership operates separate businesses that are related to one another.
related diversification 3 advantages
1. Reduced Risk-because of more than one product
2. management efficiencies-administration spread over several businesses
3. Synergy-the sum is greater than the parts
1. People
2. Strategy
3.Operations
the 3 core processes of business are?