CH 6: strategic positioning Flashcards by shreya Khatri

what is strategic positioning

Attempts to achieve sustainable comp adv. By preserving what is distinct about a company

ex: Performing different activities from rivals or similar activities in different ways

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who developed strategic positioning

Michael Porter

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3 levels of strategy

corporate
business
functional

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corporate level

Focuses on the organization as a whole

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level

Focuses on individual business units or product/service lines.

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level

Applies to the key functional departments or units within the business units.

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Three key principles underlie strategic positioning

Strategy is the creation of a unique and valuable position.
Strategy requires trade-offs in competing.
Strategy involves creating a “fit” among activities.

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ex of corportation level strat and question

ULTA
-what business or businesses should we be in

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ex of bus level strat and question

Services unit
-how should we compete in this industry

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ex of funct level strat

-marketing
-how can business funct support business level strats

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Strategic management process

1-establish mission, vision, and value statements
2- asses current reality
3-formulate corporate, business, and funct. Strategies
4-execute strategies
5-maintain strat control

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feedback

revise actions if necessary based on feedback

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Establishing mission statement Qs

Who are our customers
What are our major products
What are our strengths

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Establishing vision statement qs

Does it set standards
Is it well articulated
Is it appropriate for the org and the time

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Establishing value statement Qs

Does it expresses the companies distinctiveness

Is it intended to guide all the organization’s actions

Will it be unchanging

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Step 2: assessing the current reality

Look where the org stands internally/externally, to determine what is working and what’s not

See what can be changed to increase efficiency/effectiveness in achieving the organization’s vision

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SWOT analysis

(STEP 2)
Environmental scanning-monitoring of an organization’s internal/external environments to detect early signs of opportunities and threats

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what does swot scan

Strengths (internal)
Weaknesses(internal)
Opportunities (external)
Threats (external)

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VIRO

(STEP 2)
Analyzes resource/capability to determine its competitive strategic question by answering 4 questions

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4 questions of viro

VALUE
RARITY
IMITABILITY
ORGANIZATION

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value

is it valuable

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rarity

Is the resource or capability currently controlled by only a few firms or no other firms?

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imitiablity

Is the resource or capability costly for other firms to imitate?

organization

Is the firm organized to exploit the resource

3 parts of forecasting

-forecasting trend analysis contingency planning

forecasting

A vision or projection of the future

Trend analysis

– Hypothetical extension of a past series of events into the future.

* Contingency planning

Creation of alternative hypothetical but equally likely future conditions. – Also called scenario planning and scenario analysis.

Benchmarking

Process by which a company compares its performance with that of high performing

what tools are included in step 2

swot analysis viro forecasting benchmarking

grand strategy

comes after assessing current reality

Strategy formulation

- process of choosing among diff strategies and altering them to best fit the org Translates the broad miss/vis state into corporate strategy

3 types of corporate strategies

growth stability defesnive

growth stratgey

Involves expansion, in sales revenues, market share, # of employees, or # of customers.

stabilitiy

Involves little or no significant change

Defensive

* Involves reduction in the organization’s efforts. * Retrenchment.

BCG matrix

question marks- high GR, Low MS stars- High GR, High MS cash cows- Low GR, High MS dogs- Low GR, low MS

Diversification

- operating several businesses in order to spread the risk (products may related or unrelated)

Vertical integration

Firm expands into businesses that provide the supplies it needs to make its products or that distribute and sell its products.

Porter's 5 competitive forces

Threat of new entrants Bargaining power of suppliers Bargaining power of buyers Threats of substitutes Rivarlity among competitors

Porters 4 competitive strategies

cost leadership differentiation cost focus focused differentiation

Cost-leadership strategy

Keep the costs & prices of a prod/ service below those of competitors and target a wide market.

Differentiation strategy

Offer prods that are unique compared to those of competitors and target a wide market.

Cost-focus strategy

Keep the costs of a product below those of competitors and target a narrow market.

Focused-differentiation strategy

Offer prods that are unique compared to those of competitors and target a narrow market.

Strategy implementation

Putting strategic plannings into affect meaning dealing w roadblocks within the org structure/culture and seeing if the right ppl and control systems are available to execute the plans

what is considered the greatest challenge for managers

strategy implementation

Execution

Consists of using questioning, analysis and follow thru in order to mesh strategy w reality, align ppl w goals, and achieve results

strategic control

Monitoring the execution strategy and taking corrective action if necessary To keep on track you must Engage people Keep it simple Stay focused Keep moving

3 core processes of business

People- consider who will benefit your future Strategy-consider how will success be accomplished Operations-consider what path will be followed

It is common practice today for most small business owners to engage in strategic planning. T or F

When other companies cannot duplicate the value provided by a competitor, then the competitor has established a(n) ______ competitive advantage.

sustainavble

What does business growth rate refer to, as used in the BCG matrix?

The speed of industry growth

The strategy of moving into new lines of business is called ______.

diversification