Strategy Flashcards
Essentially a plan of action for accomplishing an organization’s long-range goals to create value.
Strategy
Focuses on the future of the organization as a single-unit - a general vision of the future it seeks and its long-term goals.
Organizational Strategy
Address questions of how and where the organization will focus to create value.
Business Unit Strategies
Reflects the way in which organizational and business unit strategies are translated into action at the functional level through functional strategies.
Operational Strategy
Process of setting goals and designing a path toward a competitive position. It helps create alignment of efforts and provides a layer of control.
Strategic Planning
The actions that leaders take to move their organizations toward the goals set in strategic planning and to create value for all stakeholders. It makes incremental adjustments to the plan as needed and to the organization itself.
Strategic Management
Formulation > Development > Implementation > Evaluation
Strategic Planning & Management Process
Actions, processes, or results that are needed to deliver a desired value.
Value Drivers
Approach to identify their key performance indicators (KPIs) and to make sure that the objectives used to measure performance are strategically aligned to the various sources of value to the organization and are balanced.
Balanced Scorecard
Predictive in that action in this area can change future performance and help achieve success.
Leading Indicator
Effects that have already occurred and cannot be changed.
Lagging Indicator
Compares performance levels and/or processes of one entity with those of another to identify performance gaps and set goals aimed at improving performance.
Benchmarking
Consonance or 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.
Strategic Fit
Companies agree to share assets, such as technology or sales capabilities, to accomplish a goal. The relationship may have varying degrees of tightness and formality. Some alliances involve customers, partners, or competitors.
Strategic alliance
Two or more companies invest together in forming a new company that is jointly owned.
Joint Venture
One firm acquires partial ownership through purchase of shares. The relationship may be general (sharing proportionally in control, profits, and liabilities) or limited (no managerial authority, liability limited to investment).
Equity partnership
A firm purchases the assets of a local firm outright, resulting in expanding the acquiring company’s employee base and facilities. Integration of acquired companies often involves significant cultural, systems, and management challenges.
Merger/acquisition
A trademark, product, or service is licensed for an initial fee and ongoing royalties.
Franchising
A local firm is granted the rights to produce or sell a product. A low-risk entry strategy; avoids tariffs and quotas imposed on exports.
Licensing
A firm arranged for local manufacturer to produce components or products as a means of lowering labor costs.
Contract manufacturing
Another company is brought in to manage and run the daily operations of the local business. Decisions about financing and ownership reside with the host-country owners.
Management contract
An existing facility and its operations are acquired and run by the purchaser without major changes.
Turnkey operation
A company builds a new location from the ground up.
Greenfield operation
A company repurposes, through expansion or redevelopment, an abandoned, closed, or underutilized industrial or commercial property.
Brownfield operation
- Identify the candidate for divestiture.
- Identify a target buyer.
- Restructure.
- Execute the deal.
General steps for divestiture
