ch 6 Flashcards
strategic management
what does strategic positioning attempt to do
achieve sustainable competitive advantage by preserving what is distinctive
corporate-level strategy
focuses on the organization as a whole
executives generally referred to as the “c-suite”
business-level strategy
focuses on individual business units or product/service lines
senior-level managers below the c-suite typically are responsible for this level
functional-level strategy
applies to each functional area of the organization to support higher level strategies
functional managers lead planning discussions at this level
does strategic management work for small as well as large firms
no
5 steps of the strategic management process
- establish the mission, vision, and values statements
- assess the current reality
- formulate the strategies and plans
- implement the strategies and plans
- maintain strategic control: the feedback loop
SWOT analysis
a situational analysis in which a company assesses its strengths, weaknesses, opportunities, and threats
internal environment
analysis of internal strengths and weaknesses
external environment
analysis of external opportunities and threats
external general environment
PESTEL - political, environmental, social, technological, environmental, legal
VRIO
a framework for analyzing a resource or capability to determine its competitive strategic potential by answering four questions about its value, rarity, imitability, and organization
trend analysis
a hypothetical extension of a past series of events into the future. the basic assumption is that the picture of the present can be projected into the future
scenario analysis
the creation of alternative hypothetical but equally likely future conditions
the growth strategy
a grand strategy that involves expansion - as in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served
innovation strategy
growing market share or profits by improvising existing products and services or introducing new ones
stability strategy
a grand strategy that involves little or no significant change
defensive strategy
(aka retrenchment strategy) a grand strategy that involves reduction in the organization’s efforts
BCG (Boston Consulting Group) Matrix
a management strategy companies use to evaluate their portfolio of strategic business units
related diversification
a company purchases a new business that is related to company’s existing business portfolio
unrelated diversification
a company acquires another company in a completely unrelated business. this strategy reduces risk
vertical integration
a firm expands into businesses that provide the supplies it needs to make its products or that distribute and sell its products
Porter’s Model for Industry Analysis
business-level strategies originate by evaluating five competitive forces in the firm’s environment:
threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threats of substitute products or services, rivalry among competitors
cost-leadership strategy
keeping costs and prices low for a wide market
differentiation strategy
offering unique and superior value for a wide market
cost-focus strategy
keeping costs and prices low for a narrow market
focused-differentiation strategy
offering unique and superior value for a narrow market
functional strategy
a plan of action by each functional area of the organization to support higher-level strategies (flow down)
a company’s overall ability to execute is a function of effectively managing three processes:
people, strategy, operations
4 execution roadblocks…
- misaligned organizational culture
- poor performance management leadership
- conflicting functional objectives
- employee’s resistance to change
strategic control
consists of strategic implementation and taking appropriate action based on results
progress is monitored and evaluated in the control phase
