Chapter 2 Flashcards
When developing a strategic plan an organization must consider?
Marketing, operations,human resources(personnel), and finance
In order to have an effective strategic plan, an organization must?
First define its mission, conduct a SWOT analysis,and establish a set of priorities based on the organization(objectives that align with the mission).
Fundamental purpose for existing. Defines who the organization is, their values, and the customers they wish to serve.
Mission Statement
A mission statement should clearly articulate?
The basic product or service. Organizational goals. Organizational philosophy Organizational self-concept Public image
What is essential to a successful mission statement?
The recognition of what the business is and what the customer wants.
An analysis of the organizations environment and of the organization itself.
Situational Assessment
Access the environment (what are the changes, how will they affect the organization, and what opportunities do these changes present).
Situational Assessment
Conditions that’s a company must overcome in order to pursue a business opportunity.
Barriers to Entry
Examples: Are regulations, technology, financial, or strategic.
Barriers to Entry
Cost of leaving a particular business line.
Barriers to Exit
Examples: Fixed assets or specialized personnel.
Barriers to Exit
Benefits of a product relative to competing products that are important to the buyer and perceived by the buyer.
Differential Advantages
Able to sustain the operation for a period of time
Sustainable ( criteria of good diff adv)
Sources of Differential Advantage:
Product
Market
Cost
Trust
Company has unique technology,capability or clinical expertise that allows it to have a competitive position.
Product ( sources of diff adv)
Available to those who focus on a particular market segment.
Market (sources of diff adv)
Operational efficiency, expense control.
Cost (source of diff adv)
No party will exploit another’s vulnerabilities
Trust (source of diff adv)
Value seen by customers
Visible Value
Value that the producer builds into its product or service.
Invisible Value
Long-term performance targets the company hopes to achieve. Ex: Sales
Organizational Objectives
Organization is attempting to gain more sales from an existing business line or penetrate new markets.
Growth Market Strategies
Types of Market Growth Strategies:
Market penetration
Market development
Product development
Increasing sales of a present product and service in present market. Example: Attracting new customers(same product, same market).
Market Penetration
Initiating sales of existing products and services in new market. (Example: Same product, different market.)
Market Development
Provide new products to existing markets. (Example: same market, different product)
Product Development
Incorporating related service or products previously developed or offered by others to the marketplace.
Vertical Integration
Becoming your own supplier. (Example: hospital establishes their own PHO’s)
Backward Integration
Company offers new services or product closer to the customer than existing services.
Forward Integration
Developing new products or services for new market.
Diversification
Formal arrangement by two companies to operate in a particular market
Strategic Alliances
Organizations focuses on smaller sets or markets products, or services.
Consolidation Strategies
4 Types of Consolidation Strategies:
Divestment
Punting
Retrenchment
Harvesting
Selling off a business of product line
Divestment (4 Types of Conso Strat)
Reduces the number of products or services offered
Pruning (4 Types of Conso Strat)
A company decides to withdraw from certain markets.
Retrenchment (4 Types of Conso Strat)
Gradually withdrawing support from a product until there is no market demand
Harvesting (4 Types of Conso Strat)
Quantitative measures of accomplishment by which the success of marketing strategies can be measure. (Example: retention and new sales growth)
Market Objectives
Steps in determining the target market:
Mass Marketing
Multisegment Marketing
Market Concentration
Treating the entire market as one target market
Mass Marketing (steps in determining target market)
Distinct marketing strategy might be developed for each group, addressing different issues for each segment.
Multisegment Marketing (steps in determining target market)
Targeting only one segment of the market (boutique style)
Market Concentration (steps in determining target market)
Developing marketing strategies:
Market Leader
Market Challenger
Market Follower
Market Niche
Firm that has the largest market share and dominates the competitors. Dictates pricing, and is the first to introduce products.
Market Leaders (devel market strat)
The firm that attempts to confront the market leaders. Tend to be smaller than market leaders, but aggressive in strategy.
Market Challenger (devel market strat)
Business that competes in the marketplace by following the market leader rather than by attacking it directly. Try to maintain existing customers and also attract new ones. Tries to prevent aggressive competition.
Market Follower (devel market strat)
Target a narrow semen in a large market.
Market Niche (devel market strat)
Direction an organization will pursue within its chosen environment (how a business about achieving a goal)
Strategic Planning
