chapter 6 Flashcards
strategy
large scale action plan that sets the direction for an org
strategic plan
overall blueprint for where the org is going and how its going to get there
why strategy matters in planning
- provides direction and momentum
- encourages new ideas
- developing a sustainable competitive advantage
- everyone works towards the same goal
what is an effective strategy
- unique and valuable position
- strategic positioning
–> sustainable comp advg by preserving what is distinctive abt a company
–> perform different activities from rivals/ similar activities in diff ways - strategy required trade-offs in competing
- strategy involves creating a “fit among activities
variety based positioning
choice of product/service rather than customer segments
- few needs, many customers
- auto repair
needs based positioning
choice of activities suit a particular customer segment when there are groups of customers with differing needs
- broad needs, few customers or same customer different needs
- ikea
access based positioning
segmenting customers who are accessible in different ways not on customer differences
- broad needs, many customers
importance of strategy
it helps a company set direction for an org to achieve its goals, stay ahead of competitors, and adapt to changes in the business environment
Strategy = plan for competing in the marketplace
steps in strategic management process
- est mission vision, and values statement
- Assess current reality
- formulate corporate, business, and functional strats
- strategic implementation
- maintain strat control
step 1
mission : customer, G/S, where and how compete, what is your purpose
vision : clarity and direction, unique competences and what org stands for and what it will become
value : org viewpoint of the world and its culture, norms, and basic beliefs of org
step 2
assessing the current reality
- look at where org stands internally and externally to see what is working and what is not
- what can be changed to increase efficiency and effectiveness in achieving org vision
tools : SWOT analysis, forecasting, benchmarking
SWOT
Inside
S- strength
W- weaknesses
outside
O- opportunities
T- threats
strat plan tool that seperates infl on a bus future success into internal and external factors
WHY :
- define realistic goals
- improve capabilities
- overcome weaknesses w/ strengths
- identify threats that can be turned into opportunities
VRIO
anaylze resource/ capability to determine its comp strategic question by answering 4 questions
1. value - is the resource or capability valuable? –> comp disadvantage
2. Rarity - is the resource or capability currently controlled by only a few firms or no other firms? –> equal competitive
3. imitability : is the resource or capability costly for other firms to imitate? –> temp comp advantage
4. org : is the firm organized to exploit the resource or capability –> unexploited comp advantage
sustained comp advantage
business level strat
- 5 comp forces
- 4 comp strats
- executives approach toward strat dev
5 comp forces
- rivalry among competitors
- comp from substitute products
- competitive form from potential entrants
- bargaining power of suppliers and supplier-seller collab
- bargaining power of buyers and buyer-seller collab
