Chapter 2-Strategy Flashcards
What does Strategy entail?
Select broad objectives- directs an enterprise to its goals
Plans the path to achievement
Long term
Whole picture not individual activities
Delivery through pattern of strategic decisions
HOW organisations deliver its p & s
The components of strategy
Mission- what business are we in
Vision-where do we want to be
Goal- general aim in line with mission
Objective- quantitative reflection of the target to be reached
Capability- which resources are required
Business model- the way resources combine to deliver value
Strategic control- monitoring to see if strategy is being followed
Key strategy definitions :
Top down?
Bottom up?
Market driven?
Top down- senior managers develop strategy and the operations are organised to deliver it
Bottom up- the capacity of the operations allow a company to engulf new markets
Market driven-opertunities are recognised and operations of the company are organised to address them
Competing factors
Price ? Quality ? Delivery ? Innovation ? Willingness to adapt? What does the customer pay for? How important are each of these factors
Quality
Consistent conformance to customers expectations
Speed
Elapsed time between customers request of p&s and their receiving of them
Dependability
Delivering p&s when they were promised to the customer
Flexibility
Degree to which operations process can change:
What it does
How it does it
When it’s doing it
Areas where flexibility is relevant
P&s- introduction of new/modified p&s
Mix flexibility- produce a wide range/ mix of products and services
Volume flexibility- change the level of output or activity to produce different quantities
Deliver flexibility - change the timing of the delivery of the p&s
Agility
Flexibility and speed combined
Responding to changes in appropriate speed/time
Exploit changes as opportunities
Response to market responsibility
Helps when system is disrupted by disaster
Reasons for change
Changes external to the company
Changes internal to the company eg innovation giving new capabilities
Macro environment
External factors (beyond control) which will influence all businesses in the economy - PESTEL
Factors are given- generate the opportunities and threats to any business
Eg. Economic recession threat to luxury restaurants however opportunity for low cost pasta bar
PESTEL
Political -trade policies, subsidies Environmental-global warming, waste Societal- health/education/lifestyle Technological- R&D break throughs Economic-unemployment level
The importance of PESTEL
Looks at given factors external, outside control
Vital to keep constant monitor of the world in which it operates ‘horizon scanning’
Micro environment
Looking at a sector or industry eg. Car insurance, takeaway food
How attractive ?
Worth getting into ?
Too cut throat ?
