Strategy and implementation Flashcards
Strategy
way a business operates in order to achieve its aims and objectives.
two sides to strategy
formulation and the second is implementation.
Corporate strategy
concerned with the strategic decisions a business makes that affect the entire business.
strategy is concerned with setting objectives for overall financial performance, proposed mergers or acquisitions, long term human resource planning etc
Strategic direction
course of action that ultimately leads to the achievement of the stated goals of the corporate strategy
Divisional strategy
concerned with directing the divisions within the organisation.
Functional strategy
relates to a single functional operation such as: production, marketing or HRM and the activities involved within each of these functions.
corporate plan
statement of organisational goals to be achieved in the medium to long term.
Tactical decisions
medium term decisions made by middle managers.
Why use a SWOT?
objective of using a SWOT is the development of a strategic plan that considers many different internal and external factors and maximises the potential of the strengths and opportunities whilst minimising the impact of the weaknesses and threats.
The idea of a SWOT is then to gain an overall picture of all potential influences on future business success and to adapt business strategy to reflect these influences
Using the SWOT
An effective SWOT will allow a business to: • Build on strengths • Resolve weaknesses • Exploit opportunities • Avoid threats
Porter’s Five Forces
barriers to entry buyer power competition substitutes supplier power
Examples of barriers to entry
- Access to factors of production e.g. raw materials, skilled staff and components
- High capital/ investment requirements
- Access to distribution networks
- Strong brand identity
Examples of factors that determine supplier power
- The number of alternative suppliers – competition amongst suppliers
- Importance of volume of orders to supplier
- If inputs make up a large proportion of costs
- The costs of switching to a new supplier
Examples of factors that determine buyer power
- Whether the customer buys in bulk. The larger the order the greater the level of negotiated discount
- Whether the buyer has information on costs/ availability of alternative suppliers
- Product USP and exclusivity
Examples of factors that determine the number of competitors in a market
- Product differentiation in the market
- Strength of brands in the market
- The level of collusion in the market
