207 Strategy and implementation Flashcards
Strategy
A medium to long term plan
Corporate strategy
A medium to long term plan that affects the entire the business. Decided by senior managers/leaders on how to achieve a businesses aims/vision
Divisional strategy
Plans that relate to divisions in a business, may be divided by products
Functional Strategy
Plans that relate to a single functional operation such as: production, marketing or HRM. Guided by Corporate strategy
Tactics
Short to medium decisions that implement strategic decisions. Carried out by middle management such as advertising
SWOT analysis
A tool to identify the internal strengths and weaknesses of an organisation, as well as external opportunities and threats created by the business and economic environment.
Poter’s 5 forces
A model that suggests that suggests 5 forces on a busines that determine behaviour and the likely levels of profitability.
Buyer Power
Supplier Power
Threat of substitues
Threat of new entry
Comptetitors
Ansoff’s Matrix
Strategic tool that helps businesses achieve growth, shows targetting customers and the risk involved
Market penetration
Product development
Market development
Diversification
Horizontal integration
when a business takes over another business in the same industry at the same stage of production
Organic growth
Involves expansion from within the business, ie expanding product ranges
Vertical integration
When a business merges or takes over another business in a different stage of the production process
Merger/takeover
Merger - two or more equals
Takeover - one larger to one smaller company
External growth
Growth that comes from buying new businesses, mergers/takeovers
Franchise
The legal right to use a brand name of an existing business, sells the brand name to others
Rationalisation
Reorganisation of a business to increase efficiency. Leads to reduction in business size, change of policy or alteration of strategy
