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STRAT MAN > LESSON 4: Strategy Formulation and Business-Level Strategic Action > Flashcards

LESSON 4: Strategy Formulation and Business-Level Strategic Action Flashcards

1
Q

is the concentration of an organization on specific strategic directions to achieve a competitive advantage. Strategic development refers to the structured process of creating strategies that align with the company’s vision and external/internal environment.

A

srategy focus

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2
Q

Vision and Mission Statements:

A

Foundation of strategic intent

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2
Q

The process of determining and understanding the specific groups or segments of the market that the business intends to serve.

A

Identification of Customers

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3
Q

Key Elements of Strategy Focus and Development

A

 Vision and Mission Statements
 Strategic Objectives
 Environmental Scanning
 Strategic Analysis Tools

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4
Q

Strategic Analysis Tools:

A

SWOT Analysis, Porter’s Five Forces, Value Chain Analysis.

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5
Q

Steps in Customer Identification:

A

 Market Segmentation
 Target Market Selection
 Customer Profiling
 Needs Analysis

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5
Q

Strategic Objectives:

A

Short-term and long-term goals

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6
Q

Strategy Formulation Process:

A
  1. Define mission and vision
  2. Conduct internal and external assessments
  3. Set strategic objectives
  4. Formulate strategies
  5. Implement and monitor
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6
Q

Environmental Scanning:

A

External (PESTEL, Industry Analysis) and Internal (Resources, Capabilities)

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7
Q

: Choosing the most appropriate segments.

A

Target Market Selection

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7
Q

Demographics, psychographics, behavioral, and geographic criteria.

A

Market Segmentation

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8
Q

Automates sales, marketing, and service processes.

A

Operational CRM

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8
Q

Understanding customer pain points and preferences.

A

Needs Analysis

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8
Q

: Creating customer personas.

A

Customer Profiling

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8
Q

A strategy for managing a company’s relationships and interactions with current and
potential customers using data analysis and digital tools.

A

Customer Relationship Management (CRM)

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8
Q

Components of CRM:

A

 Operational CRM
 Analytical CRM
 Collaborative CRM

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9
Q

Importance of customer identification

A

 Enhances customer satisfaction
 Increases marketing efficiency
 Drives product/service innovation

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9
Q

Analyzes customer data for decision-making.

A

Analytical CRM

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10
Q

Facilitates communication across departments and with customers.

A

Collaborative CRM

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11
Q

Benefits of CRM:

A

 Customer retention and loyalty
 Personalized marketing
 Improved customer service
 Increased profitability

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12
Q

are approaches taken by a firm to gain a competitive advantage in a particular market or industry.

A

Business-level strategies

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12
Q

Gaining an edge by being the lowest-cost producer.

A

Cost Leadership

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13
Q

Main Types of business level strategy

A

 Cost Leadership
 Differentiation
 Focused Cost Leadership
 Focused Differentiation
 Integrated Strategy

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14
Q

Offering unique features that customers value.

A

Differentiation

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15
Q

Targeting a narrow market segment at a low cost.

A

Focused Cost Leadership:

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16
Q

Types of Strategy

A
  • Corporate-Level Strategies
  • Business-Level Strategies
  • Functional-Level Strategies
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16
Q

Offering specialized products to a niche market.

A

Focused Differentiation

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17
Q

Combining cost efficiency with differentiation.

A

Integrated Strategy

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18
Q

 Focus on overall scope and direction.

A

Corporate-Level Strategies

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19
Q

Corporate-Level Strategies example

A

Diversification into new industries.

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20
Q
A
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21
Q
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22
Q
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24
Q

Specific actions in departments like marketing, production, and finance.

A

Functional-Level Strategies

25
Q

Business-Level Strategies examples

A

Apple using differentiation via product design and innovation.

28
Q

how the firm competes in individual markets (e.g., cost leadership, differentiation).

A

Business-Level Strategies

29
Q

Functional-Level Strategies examples

A

Marketing launching a digital ad campaign to support new product lines

29
Q

Cost Leadership market scope

29
Q

These strategies are universally applicable in various industries and help businesses position themselves effectively in the market.

A

Universal Business-Level Strategies

30
Q

Cost Leadership competitive advantage

A

Lowest operational cost

30
Q

Cost Leadership example

31
Q

Differentiation example

31
Q

Differentiation market scope

32
Q

Differentiation competitive advantage

A

Unique product features

33
Q

Focused Cost Leadership competitive advantage

A

Lowest cost in niche

33
Q

Focused Cost Leadership market scope

34
Q

Focused Differentiation market scope

35
Q

Focused Cost Leadership example

A

Dollar General

36
Q

Focused Differentiation competitive advantage

A

Unique features for niche

37
Q

Focused Differentiation example

38
Q

Integrated market scope

A

Broad/Narrow

39
Q

Integrated competitive advantage

A

Balance of cost and uniqueness

40
Q

Integrated example

41
Q

The Risk Associated with Cost Leadership Strategy

A

 Technological Disruption
 Price Wars
 Perception of Low Quality
 Imitation by Competitors

42
Q

Competitors adopting new cost-saving technologies.

A

Technological Disruption

43
Q

Aggressive pricing may erode profit margins. .

A

Price Wars

44
Q

: Customers may view low cost as poor quality.

A

Perception of Low Quality

45
Q

Diminishes the uniqueness of cost advantage

A

Imitation by Competitors

46
Q

: A strategy where firms seek to offer products or services that are perceived as unique in the industry

A

Product Differentiation Strategy

47
Q

Differentiation Bases:

A

 Product design and features
 Brand image
 Customer service
 Innovation

48
Q

Advantages of Product Differentiation Strategy

A

 Brand loyalty
 Less price sensitivity
 Higher profit margins

49
Q

Risk Involved in Differentiation Strategy

A

 High Costs
 Imitation
 Changing Customer Preferences

50
Q

: Developing and maintaining uniqueness can be expensive.

A

High Costs

51
Q

Competitors may copy features.

52
Q

: What is unique today may become outdated.

A

Changing Customer Preferences

53
Q

: Can alienate some market segments.

A

Over-Differentiation

54
Q

A strategy targeting a specific, well-defined market segment with customized offerings.

A

Segmented Focus Strategy

55
Q

Segmented Focus Strategy Examples:

A

 Organic food brands targeting health-conscious consumers
 Luxury brands targeting affluent buyers

56
Q

Segmented Focus Strategy Benefits:

A

 Strong brand loyalty in niche markets
 Limited competition

57
Q

Segmented Focus Strategy Risks:

A

 Market segment may shrink
 Larger firms may target the same niche

58
Q

A hybrid strategy combining low cost with product differentiation to achieve competitive advantage.

A

Integrated Cost Leadership and Differentiation Strategy

59
Q

Integrated Cost Leadership and Differentiation Strategy Implementation Requirements:

A

 Flexible manufacturing
 Efficient value chain
 Strong organizational culture

60
Q

Integrated Cost Leadership and Differentiation Strategy Advantages:

A

 Broader market appeal
 Cost efficiency with added value

61
Q

: Strategic connections between firms and their stakeholders (e.g., suppliers, partners, customers) supported by robust information systems.

A

Network Linkages and Information Systems

61
Q

Integrated Cost Leadership and Differentiation Strategy Risks:

A

 Confusion in value proposition
 Operational complexity
 Risk of being “stuck in the middle”

62
Q

Types of Network Linkages

A

 Vertical (with suppliers and distributors)
 Horizontal (with competitors, alliances)

63
Q

Role of Information Systems:

A

 Data collection and analytics
 Supply chain coordination
 Real-time decision-making

64
Q

Benefits of Network Linkages and Information Systems

A

 Improved operational efficiency
 Enhanced innovation and collaboration
 Faster response to market changes

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