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BUAD 116 > Chapter 2 - Strategic Planning > Flashcards

Chapter 2 - Strategic Planning Flashcards

1
Q

What is a value proposition?

A

Thirty-second “elevator speech” stating the specific benefits a product or service offering provides a buyer

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2
Q

What do companies segment markets?

A

Firms typically segment markets and then identify different target markets, or groups of customers they want to reach when they’re developing their value propositions. Companies sometimes develop different value propositions for different target markets

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3
Q

What is Strategic Planning?

A
  • A process that helps an organization allocate its resources to capitalize on opportunities in the marketplace
  • Typically, it is a long-term process.
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4
Q

What does Strategic Planning Process involve?

A
  • Conducting a situation analysis

- Developing the organization’s mission statement, objectives, value proposition, and strategies

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5
Q

What does Situation Analysis involve?

A

Involves analyzing both the external and the internal environments

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6
Q

In what SWOT, what are the internal factors?

A

Strengths & Weaknesses

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7
Q

In what SWOT, what are the external factors?

A

Opportunities & Threats

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8
Q

What method should you use to assess the internal environment?

A

SWOT

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9
Q

What method should you use to assess the external environment?

A

PEST

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10
Q

What is the five forces model?

A
  • An approach for analyzing industries
  • Helps organizations understand their current competitors as well as organizations that could become competitors in the future
  • Helps firms can find the best way to defend their position in the industry
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11
Q

What are the five forces in the five forces model?

A
  • Potential New Entrants
  • Bargaining Power of Buyers
  • Bargaining Power of Suppliers
  • Substitutes
  • Competitive Rivalry
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12
Q

In the five forces model, what effect does ‘Potential New Entrants’ have?

A

Profitable markets attract new entrants, which drives down profitability

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13
Q

In the five forces model, what effect does ‘Bargaining Power of Buyers’ have?

A

Buyers to drive prices down

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14
Q

In the five forces model, what effect does ‘Bargaining Power of Suppliers’ have?

A

Suppliers to drive up prices

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15
Q

In the five forces model, what effect does ‘Substitutes’ have?

A

Close substitute products exist in a market, it increases the likelihood of customers switching to alternatives in response to price increases

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16
Q

In the five forces model, what effect does ‘Competitive Rivalry’ have?

A

Number and capability of competitors in the market

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17
Q

What does competitive analysis involve?

A

Looking at any information available on competitors

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18
Q

What does PEST in PEST Analysis stand for?

A
  • The Political and Legal Environment
  • The Economic Environment
  • The Social/Cultural Environment
  • Technology
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19
Q

What is a mission statement?

A

States the purpose of the organization and why it exists

20
Q

What are objectives?

A

What organizations want to accomplish

21
Q

What are end results?

A

What they want to achieve in a given time frame

22
Q

What are strategies?

A

What a firm is going to do to achieve its objectives

23
Q

What are tactics?

A

Specific actions taken to execute the strategy.

24
Q

What are the four terms in ‘Ansoffs Opportunity Matrix’?

A
  • Market Penetration
  • Product Development
  • Market Development
  • Diversification
25
Q

Market Penetration focuses on ___ products for ___ markets

A
  • Existing Products

- Existing Markets

26
Q

Market Development focuses on ___ products for ___ markets

A
  • Existing Products

- New Markets

27
Q

Product Development focuses on ___ products for ___ markets

A
  • New Products

- Existing Markets

28
Q

Diversification focuses on ___ products for ___ markets

A
  • New Products

- New Markets

29
Q

What is franchising?

A
  • A longer term form of licensing that’s extremely popular with service firms
  • Franchisees pay a fee for the franchise and must adhere to certain standards.
30
Q

What is Contract Manufacturing?

A

Companies hire manufacturers to produce their products in another country

31
Q

What are Joint Ventures?

A

Combine the expertise and investments of two companies and help companies enter foreign markets

32
Q

What is Direct Investment?

A

Owning a company or facility overseas as a way to enter a foreign market

33
Q

What does SMART in SMART GOALS stand for?

A
  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time-Bound
34
Q

What are the 3 different levels within an organization where Strategic Planning may occur?

A
  • Corporate Level
  • Business Level
  • Functional Level
35
Q

What are corporate level plans?

A

In large organizations top executives will develop strategic plans for the corporation as a whole.

36
Q

What is Strategic Business Unit (SBU)?

What are they also called?

A
  • Business-level plans
  • A business or product line within an organization that has its own competitors, customers and profit center for accounting purposes
37
Q

What is a portfolio?

A

A group of businesses

38
Q

What is the portfolio planning approach?

A

Analyzes a firm’s entire collection of business relative to one another

39
Q

What are the 2 most widely used approaches to portfolio planning?

A
  • BCG Matrix

- GE Approach

40
Q

What 2 criteria does the BCG Matrix evaluate its SBUs on?

A
  • The SBUs market growth rate

- The SBUs relative market share

41
Q

In the BCG Matrix, what are the 4 categories SBU products can fall into?

A
  • Stars
  • Cash Cows
  • Question Marks/Problem Children
  • Dogs
42
Q

Stars have:

  • ___ market growth
  • ___ market share

Companies should ___

A
  • High Market Growth
  • High Market Share
  • Invest
43
Q

Cash Cows have:

  • ___ market growth
  • ___ market share

Companies should ___

A
  • Low Market Growth
  • High Market Share
  • Leave them alone
44
Q

Question Marks have:

  • ___ market growth
  • ___ market share

Companies should ___

A
  • High Market Growth
  • Low Market Share
  • Invest or gradually eliminate/sell them
45
Q

Dogs have:

  • ___ market growth
  • ___ market share

Companies should ___

A
  • Low Market Growth
  • Low Market Share
  • Sell
46
Q

What is the General Electric (GE) Approach?

A
  • Examines a business’s strengths and the attractiveness of the industry in which it competes
  • Evaluate industries as high, medium, and low

BUAD 116 (9 decks)

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