Chapter 1 - Strategy Process Flashcards
What is an ecosystem?
Network of organisations involved in the delivery of product or service
What is a strategy?
Course of action, including the specification of resources required, to achieve a specific objective
What are the advantages of long term planning?
Forces managers to look ahead
Improved control
Identifies key risks
Encourages creativity
What are the disadvantages of long term planning?
Setting corporate objectives
Short term pressures
Difficulties in forecasting accurately
Bounded rationality
Rigidity
Cost
Management distrust
What are the three levels of strategy?
- Corporate Strategy
- Business Strategy
- Functional Strategy
What is corporate strategy?
Organisation as a whole
What is business strategy?
How organisation can compete successfully in individual markets
What is functional strategy?
day to day management strategies of the organisation
What is the rational model?
Logical, step-by-step approach
What is the emergent approach - Mintzberg?
Evolve in response to unexpected events that impact the organisation.
What is logical incrementalism?
Strategy tends to be a small-scale extension of past policy, rather than radical change
What is freewheeling opportunism?
Organisations should avoid formal planning and instead simply take advantage of opportunities as they arise
What organisations does formal planning suit?
Stable industries
Inexperienced managers
What organisations does informal planning suit?
Dynamic, fast changing industries
Experienced managers
Don’t need to raise significant external finance
What is strategic managment accounting?
Form of management accounting in which emphasis is placed on information which relates to factors external to the entity
What information is provided by strategic management accountants?
Competitor analysis
Customer profitability
Pricing decision
Portfolio analysis
Corporate decision support
Customer profitability analysis
Evaluation of brand value
Strategic information for acquisitions
Environmental and sustainability reporting
Investment in strategic management systems
