Strategy Decision Making 2 Flashcards
What is Strategy?
What is Strategy?
Strategy is the creation of a unique and valuable position, involving a different set of activities
Important points for Strategy
Important points for Strategy
It is about the managers’ theories about how to gain and sustain competitive advantage
It is about being different from your rivals
It is about creating value while keeping costs under control
The Strategic Management Process
The Strategic Management Process
The full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns.
Company Mission
Company Mission
the unique purpose that sets a company apart from others of its type and identifies the scope of its operations in product, market, and technology terms
Company Vision
Company Vision
a company’s purpose or reason for existing
Company Values
Company Values
What a company believes, its business practices around how teammates treat one another, and how the company treats its customers.
Mission Statement
Mission Statement
a statement of the organization’s purpose - what it wants to accomplish in the larger environment
Product Oriented Mission
Product Oriented Mission
defines a business in terms of a good or service provided rather than in terms of the customer need to be met
Customer Oriented Mission
Customer Oriented Mission
defines a business in terms of providing solutions to customer needs
Organizational Culture
Organizational Culture
the set of values, norms, and standards that control how employees work to achieve an organization’s mission and goals
Business Level Strategy
Business Level Strategy
the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market
Quest for gaining and sustaining competitive advantages in a discrete and identifiable product market (How to compete?)
Scenario Planning
Scenario Planning
Strategy-planning activity in which top management envisions different what-if scenarios to anticipate plausible futures in order to derive strategic responses.
Corporate Level Strategy
Corporate Level Strategy
A plan that indicates in which industries and national markets an organization intends to compete.
Quest for selecting and managing the scope and the overall direction of the firm (Where to compete to get competitive advantage?)
Decentralized Planning
Decentralized Planning
An approach where top executives or planning experts work with managers in major divisions or departments to develop their own goals and plans.
Strategic Intent
Strategic Intent
a stretch goal that pervades the organization with a sense of winning, which it aims to achieve by building the necessary resources and capabilities through continuous learning
External Analysis
External Analysis
Examining the organization’s operating environment to identify strategic opportunities and threats.
Why Look at the External Environment?
Why Look at the External Environment?
Threats
Opportunities
Macro-environment
Industry
Political PESTEL
Political PESTEL
the impact of government including taxes, tariffs, trade agreements, and labor regulations
Economic PESTEL
Economic PESTEL
growth rates, interest rates, levels of employment, price stability (inflation and deflation), and currency exchange rates.
Social PESTEL
Social PESTEL
population size, age, ethnic mix, and social movements
Technological PESTEL
Technological PESTEL
impact of the internet, smart devices, and automation on business and society
Legal PESTEL
Legal PESTEL
requirements related to labor and consumer protection, equality, and product safety
Ecological PESTEL
Ecological PESTEL
broad environmental issues such as the natural environment, global warming, and sustainable economic growth
How do firms try to influence the environment?
How do firms try to influence the environment?
Marketing and Lobbying