Basic Definitions & Strategies Flashcards
What is a strategy and how is its long-term direction formed?
Strategy is the long-term direction of an organization.
The long-term direction is formed by choices and actions about its resources and scope of activities to create advantageous position in changing environmental and stakeholder contexts.
Describe strategy in terms of:
- Current positioning
- Future direction
Current positioning asks:
* Where are we competing?
- Products or services scope
- Geographical markets scope
- Vertical scope
& *How are we competing?
- What is the basis of our competitive advantage?
Future direction asks:
*What do we want to become?
- Vision statement
*What do we want to achieve?
- Mission statement
- Performance goals
*How will we get there?
- Guidelines for development
- Priorities for capital expenditure
- Growth modes: organic growth, M&A, alliances
State two classic definitions of strategy
Michael Porter: Competitve strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.
Henry Mintzberg: a pattern in a stream of deicisions.
How can an organisation state its purpose?
Through these:
* Mission Statement
* Vision Statement
* Statement of Corporate Values
* Statement of Objectives
What’s a mission statement?
Tells employees and stakeholders with clarity about what the organisation is fundamentally there to do.
e.g. ‘What business are we in?’
‘What would be lost if the organisation did not exist?’
‘How do we make a difference?’
What’s a vision statement?
A vision statement is concerned with the future an organisation seeks to create.
e.g. ‘What do we want to achieve?’
‘If we were here in twenty years, what do we want to have created or achieved?’
Statement of corporate values?
The underlying/core ‘principles’ that guide an organisation’s strategy and define the way that the organisation should operate.
E.g. PwC five. Act with integrity, care, professionalism etc.
They dont change.
Statement of objectives?
Statements with specific outcomes that company wants to achieve.
e.g. 20% Market share / £1M Profit / 25% of the Board to be from BAME background
Three key points in a strategy statement?
Goals (wants to achieve)
Scope (within what sector)
Capabilities (How it can deliver)
What’s a functional strategy?
how different parts of the organisation deliver the strategy in terms of managing resources, processes and people.
Whats a business strategy?
How a business seeks to compete successfully in a particular market.
Whats a corporate level strategy?
the overall scope of an organisation and how to add value to business units.
e.g. (other sectors to go into?)
What do top managers do that middle level managers do not?
Top managers formulate and control strategy
Middle managers meet strategic objectives and deal with constraints.
All managers provide feedback back up to help control strategy.
