Ch 8 Flashcards
organizational strategy
plan of action for a company to achieve its long-term goals
designing and defining strategies is a continuous process that helps organizations to determine…….
what they do, why they should be in business, how they can win and sustain market share, and how they can innovate continually to keep ahead of the competition
on of the main responsibilities of managers is to…….
create, present, and implement strategies to defend the company against the threat of competition, ascertain the best market position, and determine the weaknesses that might make its position vulnerable in the industry
to design a successful strategy, managers must…….
use critical thinking to understand the full nature of the competitive forces present and take a holistic view of the industry structure
3 levels of strategy
organizational, divisional, and functional
organizational strategy
plan of action for a company to achieve its long-term goals
divisional strategy
determines how particular business units or divisions compete in a particular industry or market
functional strategy
determines how employees will implement and achieve a tactical plan
all business strategies seek to
gain competitive advantage
Competitive advantage
characteristics of an organization’s products or services that distinguish it from competitors and provide an advantage in the marketplace
Miles-Snow 4 types of strategic behavior
defender, prospector, analyzer, and reactor
5 forces that determine what managers should expect when competing in an industry
-power of suppliers
-power of buyers
-substitute products and services
-new entrants
-rivalry
barrier of entry
obstacle that makes it difficult for an organization to enter a particular market or replicate a competitor’s service and product offerings
examples of barriers of entry
supply-side economies of scale, customer switching costs, capital requirements, rivalry, access to distribution channels, restrictive gov policy
BCG matrix
-for evaluating business units according to growth and market share
-managers could quickly categorize their company’s position in the industry where it competes
4 quadrants in the BCG matrix
star
question mark
cash cow
dog
blue ocean strategy
-company that creates a new market space where there is little or no competition
-enables managers to break up long-held beliefs and assumptions
SWOT analysis
assessing an org’s strengths, weaknesses, opportunities and threats
big strategies to boost performance
growth strategies, stability strategies, and defensive strategies
4 competitive strategies to gain competitive advantage
cost leadership
differentiation
cost focus
differentiation focus
Why should orgs not use multiple strategies?
risk being stuck in the middle and lose focus on the direction of the organization
what happens when org’s lose focus on their direction?
perform poorly because fail to establish clear market usually because products and services not unique enough to attract customers nor are they competitively priced
