chapter 9 Flashcards
strategic management
is what managers do to develop the organization’s strategies.
strategies
the plans and how it will attract and satisfy it’s customers in order to achieve it’s goals.
business model
which simply is how a company is going to make money.
strategic management process
a six step process that encompasses strategy planning, implementation, and evaluation.
mission
a statement of it’s purpose.
opportunities
are positive trends in the external environment.
threats
are negative trends.
resources
are it’s assets-financial, physical, human, and intangible- that it uses to develop , manufacture, and deliver products to it’s customers.
capabilities
are it’s skills and abilities in doing the work activities needed in its business.
core competencies
the major value-creating capabilities of the organization
strengths
any activities the organization does well or any unique resources that it has.
weaknesses
are activities the organization doesn’t do well or resources it needs but doesn’t possess.
swot analysis
the combined external and internal analysis.
corporate strategy
one that determines what businesses a company is in or wants to be in and what it wants to do with those businesses.
growth strategy
is when an organization expands the number of markets served or products offered, either through its current business.
stability strategy
a corporate strategy in which an organization continues to do what it is currently doing.
competitive advantage
what sets an organization apart.
functional strategies
strategies used by an organization’s various functional departments to support the competitive strategy.
strategic leadership
the ability to anticipate, envision, maintain flexibility, think strategically, and work with others in the organization to initiate changes that will create a viable and valuable future for the organization.
strategic flexibility
the ability to recognize major external changes to quickly commit resources.
first mover
organization that’s first to bring a product innovation to the market or to use a new process innovation.
strategic management is important for what 3 reasons?
- influences how well organizations will performed
- helps managers cope with situations that continually change
- helps coordinate and focus employee efforts on whats important
business model focuses on two things?
- if customers will value what the company provides
2. if the company can make money by what they provide
Strategic management process includes 6 steps, what are they?
- identify the organizations current mission, goals, and strategies
- Do an external analysis
- do an internal analysis
steps 2 and 3 is SWOT analysis - Formulate strategies
- implement the strategies
- evaluate results
backward vertical integration?
when the organization becomes its own supplier so it can control its inputs
forward vertical integration?
organization becomes its own distributor and is able to control its outputs
concentration?
when a company focuses on its primary line of business and increases the number of products offered or markets served in this primary business
organizations grow by using what 4 methods?
- concentration
- vertical integration
- horizontal integration
- diversification
horizontal integration?
company grows by combining with competitors
Diversification has two types?
either related or unrelated
what is related diversification?
when a company combines with other companies in different but related industries
unrelated diversification?
when a company combines with firms in different and unrelated insutries
renewal strategy
corporate strategy designed to address declining performance
two types of renewal strategies, what are they?
- retrenchment strategy
2. turnaround strategy
what is the retrenchment renewal strategy and what 3 things does it do?
short run renewal strategy used for minor performance problems
helps an organization:
1. stabilize operations
2. revitalize organizational resources and capabilities
3. prepare to compete once again
what is a turnaround strategy?
measures of cutting costs and restructuring organizational operations are more extensive
managers do what two things in both renewal strategies?
cut costs and restructure organizational operations
4 categories in a BCG matrix
- stars
- cash cows
- question marks
- dogs
what is stars in a BCG matrix?
high market share/high anticipated growth rate
what is cash cows in a BCG matrix?
high market share/low anticipated growth rate
what is questions marks in a BCG matrix?
low market share/high anticipate growth rate
what is dogs in a BCG matrix?
low market share/low anticipated growth rate
Strategic business units? (SBUs)
single independent business of an organization that formulate their own competitive strategies
what are 3 ways to gain a competitive advantage?
focus on
- quality
- design thinking
- social media
what is the 5 forces model?
describes 5 forces that determine industry attractiveness and profitability
what 5 forces are in the 5 forces model made by mcihael porter?
- threat of new entrants
- threat of substitutes
- bargaining power of buyers
- bargaining power of suppliers
- current rivalry
what is threat of new entrants in the 5 forces model?
how likely new competitors will come into the industry
what is threat of substitutes in the 5 forces model?
how likely is it that other industries product can be substituted for or industry’s products?
what is bargaining power of buyers in the 5 forces model?
how much bargaining power do buyers (customers have)
what is bargaining power of suppliers in the 5 forces model?
how much bargaining power do suppliers have
what is current rivalry in the 5 forces model?
how intense is the rivalry among current industry competitors
cost leadership strategy
when organizations compete to have lowest costs (costs or expenses, not prices) in an indsutry
differentiation strategy?
when companies competes by offering unique products to customers
focus strategy?
involves a cost advantage (cost focus) or a differentiation advantage (differentiation focus)in a narrow segment or niche?
what are porters 3 competitive strategies?
- cost leadership
- differentiation
- focus
what are the important organizational strategies for today’s environment?
- e bussiness strategies
- custoemr service strategies
- innovation strategies
what is an e business strategy and what do managers use it for? 4 things
anything utilizing online stuff
- reduce costs
- to differentiate from their firm’s products and services
- to target (focus on) specific customer groups
- to lower costs by standardizing certain office functions
clicks and bricks strategy?
business model in which a company operates both an online store (the clicks) and an offline store (the bricks) and integrates the two into a single retail strategy.
managers can use 3 strategies to become more customer oriented?
- give customers what they want
- communicate effectively with them
- create or have a culture that places importance on customer service
managers can use 2 strategies to become more innovative, they are?
- decide their organization’s innovation emphasis (basic scientific research, product development, or process development)
- its innovation timing (first mover or follower)
what is first mover?
organization thats first to bring a product innovation to the market or to use a new process innovation
