HR Strategy - Development Flashcards
Strategy Development
HOW - use resources for a competitive advantage
WHERE - to complete
Grow, contract, or expand into new markets
The organization considers where it wants to go (vision) and what it knows about itself and its environment (results of environmental scanning). Then it _develops options for how to get there_.
Strategic Fit
Compatibility of an organization’s strategy with its external and internal environments, especially with regard to the goals and values it chooses and the resources and capabilities that can be deployed toward strategic goals.
When strategic fit exists, an organization’s activities are consistent with the strategy
Each organization’s strategy must have what (two specific types of strategies)?
Business Strategy
Corporate Strategy
Business Strategy
How an organization creates a strategic position and a competitive edge over its rivals.
Use Porter’s Competitive Strategies
Corporate Strategy
Defines the scope of the firm in terms of the industries and markets it competes.
The decisions often center on growth and integration, and sometimes shrinking.
There are two ways an organization can create competitive advantage, and both involve change.
What are these two areas?
- External environment:
- Able to react swiftly to change
- In customer demand, prices, or technology, etc
- Tesla for power can when gas prices increased
- In customer demand, prices, or technology, etc
- Able to react swiftly to change
- Internal environment
- Innovation
- Could be technological, discovery of am unmet customer need, new way to appeal to customers, creation of new processes or business models.
- Innovation
External changes
Create competitive advantage for organizations that can react swiftly to the changes.
Snapchat- adapting to a market that craved privacy, and quick communication.
Tesla- gas prices rise create an electric car.
Internal changes
Organization’s ability to create change, to innovate
Apple- creating the first iphone but with touch screen, before that only nokia had flip phone with internet
What are Porter’s competitive strategies?
- Two basic types of competitive advantages
- Cost leadership
- Differentiation
These could be focused on the entire marketplace OR focused on the Organization
Why do firms pursue a strategy of cost leadership?
Aim at capturing market share within their industry by virtue of lowest price - (Walmart, Costco) volume, low price
Create economies of scale
Why do firms pursue a strategy of differentiation?
Aim for being able to charge a higher price by offering something different or by offering the same thing in a different way from competitors in their industry or market - (Tesla) higher price for unique offering
Product or service offering
Marketing strategies
Delivery System
Why do firms pursue a strategy of Focus?
Apply cost leadership or differentiation within narrow industry segments or niches - (financial services company may choose to focus on high-net-worth individuals)
Ryanair applies aggressive low-cost strategy to the leisure travel segment
Growth Strategy Options
- Strategic alliance
- Joint venture
- Equity partnership
- Merger / Acquisition
- Franchising
- Licensing
- Contract manufacturing
- Management contract
- Turnkey operation
- Greenfield operation
- Brownfield operation
Out of the growth strategies what is Strategic alliance?
Companies agree to share assets, technology, or sales capabilities
When you work together with customers, partners, or even competitors to accomplish something
Out of the growth strategies what is Joint Venture?
Two companies come together to open up a new business that they both partially own
