summative l1-l4 Flashcards
1
Q
The art and science of Formulating, Implementing, and Evaluating cross-functional decisions that enable an organization to achieve its objectives.
A
Strategic Management
2
Q
Strategic Management Model
A
- Develop Mission & Vision Statement
- Establish long-term objectives
- Generate, Evaluate, and Select Strategies
- Establish policies and Annual Objectives
- Allocate Resources
- Measure and Evaluate Performance
- a.) Perform External Audit
b.) Perform Internal Audit
3
Q
Strategy Formulation
A
- Develop Mission and Vision Statement
- Establish long-term Objectives
- Generate, evaluate, and select strategies
4
Q
Strategy Implementation
A
- Establish policies and annual objectives
- Allocate resources
5
Q
Strategy Evaluation
A
- Measure and evaluate performance
6
Q
Strategic Mgt. Process
A
- Evaluate Current mission, vision, goals, strategies
- a.) scan external environment
- identify strategic factors (opportunities, threats)
b.) scan internal environment (strengths, weaknesses) - Define new: (mission, goals)
- Formulate strategy (corporate, business, functional)
- Implement strategy via changes in (leadership, structure, human resources, information and control systems
7
Q
THE INTELLECTUAL CAPACITY TO CONCEPTUALIZE CORPORATE PURPOSE and THE DRAMATIC SKILL TO INVEST IT WITH SOME DEGREE OF MAGNETISM
A
Visionary Leadership
8
Q
What is our business?
A
Mission statement
9
Q
What do we want to become?
A
Vision statement
10
Q
The mission and vision statements must be aligned with the…
A
- Corporate values
- Strategies
- Implementation Programs
- Evaluation & Control
11
Q
Essential Components of Mission / Vision Statements
A
- Customers
- Products or Services
- Markets
- Technology
- Concern for Survival, Growth and Profitability
- Philosophy
- Self-concept
- Concern for Public Image
- Concern for Employees
12
Q
This is the stage of strategic management that involves planning and decision making that lead to the establishment of the organization’s goals and of a specific strategic plan.
A
Strategy Formulation
13
Q
External Analysis
A
- Socio-Cultural Factors
- Technological
- Economic
- Political-Legal
- Competition
14
Q
Economic Factors
A
- Globalization of Markets
- E-commerce
- GNP trends
- Interest rates
- Money supply
- Inflation rates
- Unemployment levels
- Wage/price controls
- Depreciation/Appreciation of Currency
- Energy availability and cost
- Disposable and discretionary income
15
Q
Technological
A
- New developments in IT
- Total national spending for R&D
- Total industry spending for R&D
- Focus of technological efforts
- Patent protection
- New Products
- New developments in technology transfer from lab to market place
- Productivity improvements through automation
16
Q
Political-Legal
A
- Stability of government
- Environmental protection laws
- Tax laws
- Special incentives
- Foreign trade regulations
- Attitudes toward foreign companies
- Laws on hiring and promotion
- Fair trade laws
17
Q
Socio-cultural
A
- E-life, N-generation
- Life-style changes
- Career expectations
- Rate of family formation
- Consumer Activism
- Growth rate of population
- Age distribution of population
- Regional shifts in population
- Life expectancies Birth rates
18
Q
5 competitive forces that determine industry profitability
A
- Potential Entrants
- Buyers
- Substitutes
- Suppliers
- Industry Competitors
19
Q
Strategic Management Process
A
- Study the external and internal environments.
- Identify marketplace opportunities and threats.
- Determine how to use core competencies.
- Use strategic intent to leverage resources, capabilities and core competencies and win competitive battles.
- Integrate formulation and implementation of strategies.
- Seek feedback to improve strategies.
20
Q
It is a strategic management tool for auditing or evaluating major strengths and weaknesses in functional areas of the business.
A
IFE Matrix
21
Q
What does IFE stand for?
A
Internal Factor Evaluation
22
Q
Level of Strategies
A
- Corporate Level
- Business Level
- Functional Level
- Operational Level
23
Q
What is Corporation Level composed of?
A
Chief Executive Officer
24
Q
What is the Business Level composed of?
A
Division President & Vice president
25
What is Functional level composed of?
Function manager
26
What is operational level composed of?
- Plant manager
- Sales manager
- Production manager
27
Types of Corporate level strategies
1. Portfolio strategy
2. Grand strategies
28
Kinds of Grand strategies
1. Growth strategy
2. Stability strategy
3. Recovery/Retrenchment strategy
29
Portfolio strategies
1. Acquisition
2. Unrelated diversification
3. BCG Matrix
30
Types of strategies
1. Growth Strategy
2. Retrenchment Strategy
3. Stability strategy
31
Involves increasing investment, this implies that the company is
aggressively trying to change its industry and competition condition.
Growth strategy (Offensive)
32
Is a defensive strategy where the company seek to protect its position
and hopefully minimize exposure to risk. This means that the company
applies a course of action that limits the size or the kind of its market
involvement.
Retrenchment strategy (Defensive)
33
means that
company avoid undertaking any changes and keep satisfy with the
current market position.
The Stability Strategy (maintain the status quo)
34
Types of Business Level strategies
1. 5 Industry Forces
2. Positioning Strategies
3. Adaptive Strategies
35
Types of Positioning Strategies
1. Cost leadership
2. Differentiation
3. Focus Strategy
36
Adaptive Strategies
1. Defenders
2. Prospectors
3. Analyzers
4. Reactors
37
> seek moderate growth
> retain customers
Defenders
38
> seek fast growth
> emphasize risk taking and innovation
Prospectors
39
> blend of defender & prospector strategies
> imitate the proven successes
Analyzers
40
> use an inconsistent strategy
> respond to changes
Reactors
41
a strategy used by a company to gain control over its suppliers or distributors in order to increase the firm’s power in the marketplace, reduce transaction costs and secure supplies or distribution channels.
Vertical Integration
42
Vertical Integration Strategies
1. Forward Integration
2. Backward Integration
43
Gaining ownership or increased control over distributors or retailers
Forward Integration
44
Seeking ownership or increased control of a firm’s suppliers
Backward Integration
45
Forward integration strategy is effective when:
1. Few quality distributors are available in the industry.
2. Distributors or retailers have high profit margins.
3. Distributors are very expensive, unreliable or unable to meet firm’s distribution needs.
4. The industry is expected to grow significantly.
5. There are benefits of stable production and distribution.
6. The company has enough resources and capabilities to manage the new business.
46
Backward integration strategy is effective when:
1. Firm’s current suppliers are unreliable, expensive or cannot supply the required inputs.
2. There are only few small suppliers but many competitors in the industry.
3. The industry is expanding rapidly.
4. The prices of inputs are unstable.
5. Suppliers earn high profit margins.
6. A company has necessary resources and capabilities to manage the new business.
47
Factors to consider in Vertical Integration
1. Costs
2. Scope of the fim
48
Advantages of the Vertical Integration Strategy
> Lower costs due to eliminated market transaction costs;
> Improved quality of supplies;
> Critical resources can be acquired through VI;
> Improved coordination in supply chain;
> Greater market share;
> Secured distribution channels;
> Facilitates investment in specialized assets (site, physical-assets and human-assets);
> New competencies.
49
Disadvantages of the vertical integration strategy
> Higher costs if the company is incapable of managing new activities efficiently;
> The ownership of supply and distribution channels may lead to lower quality products and reduced efficiency because of the lack of competition;
> Increased bureaucracy and higher investments leads to reduced flexibility;
> Higher potential for legal repercussion due to size (An organization may become a monopoly);
> New competencies may clash with old ones and lead to competitive disadvantage.
50
Types of Intensive Strategies
1. Market Penetration
2. Market Development
3. Product Development
51
Seeking increased market share for present products or services in present markets through greater marketing efforts
Market
Penetration
52
Introducing present products or services into new geographic areas
Market Development
53
Seeking increased sales by improving present products or services or developing new ones
Product
Development
54
Types of Diversification strategies
1. Related Diversification
2. Unrelated Diversification
55
Adding new but related products and services.
Related Diversification
56
Adding new, unrelated products and services.
Unrelated Diversification
57
Types of Defensive Strategies
1. Retrenchment
2. Divestiture
3. Liquidation
58
Regrouping through cost and asset reduction to reverse declining sales and profit
Retrenchment
59
Selling a division or part of an organization
Divestiture
60
Selling all of a company’s assets, in parts, for their tangible worth
Liquidation
61
