CH 6 Flashcards
What is strategic positioning?
It attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company
What is sustainable competitive advantage?
It exists when other companies cannot duplicate the value delivered to customers
What is competitive advantage?
It is the ability of an organization to produce goods or services more effectively than competitors do, thereby outperforming them
What are the three types of strategies?
Level 1: Corporate-level strategy
Focuses on the organization as a whole
conducted by: c-suite
Level 2: Business-level strategy
Focuses on individual business units or product/ service lines
conducted by senior-level managers below C-suite
Level 3: Function-level strategy
A plan of action by each functional area of the organization to support higher level strategies
conducted by: functional managers
What are the principles of strategic positioning?
- Strategy is the creation of a unique and valuable position
SOURCES
few needs, many customers
broad needs, few customers
broad needs, many customers - Strategy requires trade-offs in competing
- Strategy involves creating a “fit” among activities
What are the five steps of the strategic management process?
- establish mission, vision, and values
- assess current reality
A.k.a. organizational assessment
To look at where the organization stands and see what is working and what could be done differently, so as to maximize efficiency and effectiveness in achieving the organizations mission - formulate strategies and plans
Strategy formulation is the process of choosing among different strategies and altering them to best fit the organization’s needs - implement strategies and plans
Strategy implementation is putting strategic plans into affect - maintain strategic control
Strategic control consists of monitoring the execution of strategy and making adjustments, if necessary - feedback: revise actions, if necessary, based on feedback
What is a swot analysis?
it’s when you evaluate the internal environment (strengths and weaknesses) and external task and general environment (opportunities and threats) of an organization
What is strategic implementation?
Strategy implementation is putting strategic plans into affect
What is a BCG matrix?
aka Boston Consulting Group
It is a management strategy companies use to evaluate their portfolio of strategic business units on the basis of (1) their market growth rates and (2) their market share
How would you use a BCG matrix as a manager?
You can use it to evaluate each business unit, to recalibrate the company’s portfolio; or you can identify which business units to invest in and which ones to divest from
What is benchmarking?
A process by which a company compares its performance with that of high-performing organizations
What are Porter’s 5 competitive forces?
- threats of new entrants
- bargaining power of suppliers
- bargaining power of buyers
- threats of substitute products or services
- rivalry among competitors
What are Porter’s 4 competitive strategies?
- cost-leadership (keeping costs and prices low for a wide market)
*ikea - differentiation strategy (offering unique and superior value for a wide market)
*ritz carlton hotels and lexus - cost-focus strategy (keeping costs and prices low for a narrow market)
*often executed with low-end products sold in discount stores like Aldi and Dollar Tree - focused-differentiation strategy (offering unique and superior value for a narrow market)
*cruises
What is important to remember about execution of strategy?
We must use questioning, analysis, and follow-through to mesh strategy with reality, align people with goals, and achieve results promised
