Management Chapter 8

strategic management
refers to the set of decisions and actions used to formulate and execute strategies that will provide a competitively superior fit between the organization and tis environment so as to achieve organizational goals.
competitive advantage
what sets the organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the marketplace.
core competence
something the organization does especially well in comparison to its competitors
synergy
when organizational parts interact to produce a joint effect that is greater than the sum of the parts acting alone
Corporate Level strategy
pertains to the organization as a whole and the combination of business units and product lines that make up
Business level strategy
pertains to each business unit or product line within the organization.
Functional Level strategy
pertains to the major functional departments within the business unit, such as manufacturing, marketing, and research and development
SWOT analysis
an audit or careful examination of strengths, weaknesses, opportunities, and threats that affect organizational performance
Strategic Business Units (SBU’s)
a division of the organization that has a unique business, mission, product or service line, competitors, and markets relative to other units of the same organization
Portfolio Strategy
pertains to the mix of SBUs and product lines that fit together in a logical way to provide synergy and competitive advantage
Porters 5 Competitive forces
1) Potential new entrants 2) Bargaining power of buyers 3) Bargaining power of suppliers 4) Threat of substitute products 5) Rivalry among competitors
strategy
the plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining goals
Strategy formulation
the stage of strategic management that includes the planning and decision making that lead to the establishment of the organization’s goals and a specific strategic plan
Strategy execution
the stage of strategic management that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomes
BCG matrix
a concept developed by the Boston Consulting Group that evaluates SBUs with respect to two dimensions-business growth rate adn market share-and classifies them as cash cows, stars, question marks, or dogs.
Diversification
the strategy of moving into new lines of business
Related diversification
moving into a new business that is related to the corporation’s existing business activities
Unrelated diversification
expanding into totally new lines of business
Vertical integration
expanding into businesses that either provide the supplies needed to make products or distribute and sell the company’s products
Differentiation Strategy
a strategy with which mangers seek to distinguish the organization’s products and services from those of others in the industry
cost leadership strategy
a strategy with which managers aggressively seek efficient facilities, cut costs, and use tight cost controls to be more efficient than others in the industry
focus strategy
managers use either a differentiation or a cost leadership approach, but they concentrate on a specific regional market or buyer group
Globalization Strategy
product design and advertising are standardized throughout the world
Multidomestic strategy
means that competition in each country is handled independently; product design and advertising are modified to suit the specific needs of individual countries
transnational strategy
combines global coordination to attain efficiency with local flexibility to meed needs in different countries