Chapter 1 - what is strategy? Flashcards
Management
planning, organizing, leading and controlling of human/ other resources to achieve an organizational goal
planning
course of action to achieve appropriate goals
organizing
task + authority realtion
leading
motivate, coordinate, energize individuals + groups
controlling
measuring + monitoring systems => how well achieved
strategic management
- improvement financial performance
- strengthening long-term competitive position
- achievement of competitive edge over rivals
strategic management goal
sustainable competitive advantage
=> attractive number of buyers prefer the product + durable basis
the pattern of actions that define a company’s strategy
- actions to diversify (earnings/ Revenues) by new markets
- actions to enter new geographic/ product markets
- actions to capture emerging market opportunities + defend against external threats
- mergers + acquisitions => strengthen market standing
- strategic alliances + collaboration
- respond to changing market conditions
- key activities (production, sales, marketing etc.)
- strengthen competitive capabilities
- gain market share ( eg. lower prices, design…)
strategy is dynamic –> types
proactive vs reactive elements
proactive elements (dynamic strategy)
deliberate strategy => new planned + ongoing
reactive elements (dynamic strategy)
emergent strategy => react to changing circumstands
business model
how the strategy will be a money maker
V-P (business model)
costumer value proposition
how to: satisfy costumers value with a reasonable price
P-C (business model)
profit formula
how to: more revenue than costs
strategy process
- Stage of vision, mission and objective building
- strategic analysis
- strategy formulation
- strategy implementation
- evaluation
vision
(stage 1)
route company intends to take + future strategic course
1. helps to make sense
2. needs to be motivating
3. guides actions + activities
=> becomes only real when imprinted in minds of organization members
mission
company’s present state + purpose
> defining the business
> establishing major goals
values
guiding principals, beliefs, traits and behavioral norms => guidelines
integrated part => supported by top management
motivational effect
objectives
result + outcome management wants to achieve
- specific measurable + ambitious goals
- concrete steps towards vision
stage 2
strategic analysis
external vs internal analysis
external analysis (Stage 2)
competitive environment
market conditions
costumer demand
=> opportunities + threats
internal analysis (Stage 2)
resources
competencies
internal systems and processes
=> strength and weakness
crafting a strategy (Stage 3)
corporate strategy
business strategy
functional area strategy
operating strategy
corporate strategy
overall companywide game plan: CEO + senior management
business strategy
strengthen market position + gain competitive advantage: general manager of each unit
functional area strategy
relevant details for overall business strategy
game plan for particular activities => support overall business: heads of major functional activities
operating strategies
add details + completeness to overall + functional strategies
managing specific operating activities: eg. brand, operating manager
executing and implementing strategy (Stage 4)
What to change/improve? And how?
like:
- policies + procedures
- adopting best practices + continues improvement
- rewards + incentives for achievement of strategic/ financial achievements
- instilling a corporate culture => promotion of good strategy executions
- exercising strong leadership
- installing information + operating systems
evaluate performance (Stage 5)
evaluate performance + initiate corrective adjustments
fit test, competitive advantage test, performance test
fit test (Stage 5)
strategy matches external + Internal conditions
competitive advantage test (stage 5)
sustainable competitive advantage trough strategy?
performance test (stage 5)
profitability + financial strength
competitive strength + market share
balanced scorecard elements
- financial activities
- costumer relationship
- key internal process
- learning and growth
strategy
competitive moves and business approaches to:
grow the business, attract + please costumers, compete successfully, conduct operations, achieve targeted levels of organizational performance
