mgt - chapter 6 Flashcards
often referred to as strategic planning or long-range planning, is concerned with developing a corporation’s mission, objectives, strategies, and policies
STRATEGY FORMULATION
the process of finding a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses
SITUATION ANALYSIS
summarizes an organization’s strategic factors by combining the external factors from the EFAS Table with the
internal factors from the IFAS Table
SFAS (STRATEGIC FACTORS ANALYSIS
SUMMARY) MATRIX
an extremely favorable niche that is so well suited to the firm’s internal and external environment that other corporations are not likely to challenge or dislodge it
PROPITIOUS NICHE
illustrates how the external opportunities and threats facing a particular corporation can be matched with that company’s internal strengths and weaknesses to result in four sets of possible strategic alternatives.
TOWS MATRIX - (TOWS is just another way of
saying SWOT)
are generated by thinking of ways in which a company or business unit could use its strengths to take advantage of opportunities
SO STRATEGIES
consider a company’s or unit’s strengths as a way to avoid threats
ST STRATEGIES
attempt to take advantage of
opportunities by overcoming weaknesses
WO STRATEGIES
are basically defensive and primarily act to minimize weaknesses and avoid threats
WT STRATEGIES
focuses on improving the competitive position of a company’s or business unit’s products or services within the specific industry or market segment that the company or business unit serves
BUSINESS STRATEGY
is the ability of a company or a business unit to design, produce, and market a comparable product more efficiently than its competitors
LOWER COST STRATEGY
is the ability of a company to provide unique and superior value to the buyer in terms of product quality, special features, or after-sale service
DIFFERENTIATION STRATEGY
that is, the breadth of the
company’s or business unit’s target market.
COMPETITIVE SCOPE
is a lower-cost competitive strategy that aims at the broad mass market and requires aggressive construction of efficient-scale facilities, vigorous pursuit of cost reductions from experience, tight cost and overhead control, avoidance of marginal customer accounts, and cost minimization in areas like R&D, service, sales force, advertising, and so on.
COST LEADERSHIP
is aimed at the broad mass market and involves the creation of a product or service that is perceived throughout its industry as unique
DIFFERENTIATION
is a low-cost competitive strategy that focuses on a particular buyer group or geographic market and attempts to serve only this niche, to the exclusion of others.
COST FOCUS
like cost focus, concentrates on a particular buyer group, product line segment, or geographic market
DIFFERENTIATION FOCUS
where many small and medium-sized local companies compete for relatively small shares of the total market, focus strategies will likely predominate. Fragmented industries are typical for products in the early stages of their life cycles
FRAGMENTED INDUSTRY
dominated by a
few large companies.
CONSOLIDATED INDUSTRY
was developed in the mid 1990s as an efficient way to quickly consolidate a fragmented industry
STRATEGIC ROLLUP
is a specific operating plan that details how a strategy is to be implemented in terms of when and where it is to be put into action.
TACTIC
deals with when a company
implements a strategy
TIMING TACTIC
first company to manufacture and
sell a new product or service
FIRST MOVER
may be able to imitate the technological advances of others (and thus keep R&D costs low), keep risks down by waiting until a new technological standard or market is established, and take advantage of the first mover’s natural inclination to ignore market segments
LATE MOVERS
deals with where a company implements a strategy
MARKET LOCATION TACTIC
usually takes place in an
established competitor’s market location.
OFFENSIVE TACTIC
usually takes place in the firm’s own current market position as a defense against possible attack by a rival.
DEFFENSIVE TACTIC
aim to lower the probability of attack, divert attacks to less threatening avenues, or lessen the intensity of an attack
DEFFENSIVE TACTIC
The attacking firm goes head to head with its competitor. It matches the competitor in every category from price to promotion to distribution channel
FRONTAL ASSAULT
Rather than going straight for a competitor’s position of strength with a frontal assault, a firm may attack a part of the market where the competitor is weak.
FLANKING MANEUVER
Rather than directly attacking the established competitor frontally or on its flanks, a company or business unit may choose to change the rules of the game.
BYPASS ATTACK
Usually evolving out of a frontal assault or flanking maneuver, encirclement occurs as an attacking company or unit encircles them competitor’s position in terms of products or markets or both
ENCIRCLEMENT
Instead of a continual and extensive resource-expensive attack on a competitor, a firm or business unit may choose to “hit and run”
GUERILLA WARFARE
This tactic is any action that increases the perceived
threat of retaliation for an attack
INCREASED EXPECTED RETALIATION
A company can also used to gain competitive advantage within an industry by working with other firms.
COOPERATIVE STRATEGIES
is the active cooperation of firms within an industry to reduce output and raise prices in order to get around the normal economic law of supply and demand
COLLUSION
in which case firms cooperate through direct communication and negotiation, or tacit, in which case firms cooperate indirectly through an informal system of signals.
EXPLICIT COLLUSION
in which case there is no
direct communication among competing firms.
TACIT COLLUSION
is a long-term cooperative arrangement between two or more independent firms or business units that engage in business activities for mutual economic gain.
STRATEGIC ALLIANCE
is a partnership of similar companies in similar
industries that pool their resources to gain a benefit that is too expensive to develop alone, such as access to advanced technology.
MUTUAL SERVICE CONSORTIUM
the most popular form of strategic alliance
JOINT VENTURE
is a “cooperative business activity, formed by two or
more separate organizations for strategic purposes,
that creates an independent business entity and allocates ownership, operational responsibilities,
and financial risks and rewards to each member, while preserving their separate identity/autonomy
JOINT VENTURE
is an agreement in which the licensing firm grants rights to another firm in another country or market to produce and/or sell a product
LICENSING ARRANGEMENT
is a strong and close alliance in which one company or unit forms a long-term arrangement with a key supplier or distributor for mutual advantage.
VALUE CHAIN PARTNERSHIP
