Lesson 7 Flashcards
The Notion of Strategy:
A comprehensive plan guiding resource allocation to achieve long-term organization goals
What is Competitive advantage
An ability to do something so well that one outperforms competitors
Strategic Management:
The process of formulating and implementing strategies to accomplish long-term goals and sustain competitive advantage
What are Core Values
Broad beliefs about what is or is not appropriate behavior
Organizational culture:
Organizational culture reflects the predominant value system of the organization as a whole
Operating Objectives of a Business:
- Profitability
- Sustainability
- CSR
- Financial health
- Cost efficiency
What is the SWOT analysis
Strengths, Weaknesses, Opportunities and Threats
Contingency thinking:
Tries to match managerial responses with problems and
opportunities unique to different situations (No “one best way” to manage in all circumstances)
Michael Porter’s 5 forces analysis
- Threat of New Entrants
- Bargaining Power of Suppliers
- Threat of Substitute Products or Services
- Bargaining Power of Buyers
- Rivalry among existing competitors
Corporate Strategy:
Sets long-term direction for the total enterprise
Business Strategy:
How a division or strategic business unit will compete in its product or service domain
Functional Strategy:
Guides the use of resources within one specific area of operations
Portfolio Planning:
Seeks the best mix of investments among alternative business opportunities
BCG Matrix:
Analyses business opportunities according to market growth rate and market share
Globalization strategy:
World is one large market; standardize products and advertising as much as possible
Multidomestic strategy:
Customize products and advertising to fit local markets as much as possible
Transnational strategy (TCNs):
Balance efficiencies in global operations and responsiveness to local markets
Growth strategies:
Seek an increase in size and the expansion of current operations (e.g., by concentration, or by diversification)
Retrenchment and Restructuring strategies:
Pursue radical changes to solve problems (e.g., liquidation, downsizing, divestiture, turnaround)
Strategic alliances:
Two or more organizations partner to pursue an area of mutual interest (e.g., supplier alliances, outsourcing alliances, distribution alliances, and co-opetition)
Business-level strategic decisions are driven by:
- Market scope
- Source of competitive advantage
Failures of substance:
Inadequate attention to major strategic planning elements
Failures of process:
- Poor handling of strategy implementation
- Lack of participation error
- Goal displacement error
Strategic control:
Top management teams (TMTs) make sure strategies are well
implemented and that poor strategies are scrapped or modified
Corporate governance:
System of control and monitoring of top management teams
(TMTs)
