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Innovation and Strategy Formulation > summative l1-l4 > Flashcards

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

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2
Q

Strategic Management Model

A
  1. Develop Mission & Vision Statement
  2. Establish long-term objectives
  3. Generate, Evaluate, and Select Strategies
  4. Establish policies and Annual Objectives
  5. Allocate Resources
  6. Measure and Evaluate Performance
  7. a.) Perform External Audit
    b.) Perform Internal Audit
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3
Q

Strategy Formulation

A
  • Develop Mission and Vision Statement
  • Establish long-term Objectives
  • Generate, evaluate, and select strategies
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4
Q

Strategy Implementation

A
  • Establish policies and annual objectives
  • Allocate resources
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5
Q

Strategy Evaluation

A
  • Measure and evaluate performance
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6
Q

Strategic Mgt. Process

A
  1. Evaluate Current mission, vision, goals, strategies
  2. a.) scan external environment
    - identify strategic factors (opportunities, threats)
    b.) scan internal environment (strengths, weaknesses)
  3. Define new: (mission, goals)
  4. Formulate strategy (corporate, business, functional)
  5. Implement strategy via changes in (leadership, structure, human resources, information and control systems
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7
Q

THE INTELLECTUAL CAPACITY TO CONCEPTUALIZE CORPORATE PURPOSE and THE DRAMATIC SKILL TO INVEST IT WITH SOME DEGREE OF MAGNETISM

A

Visionary Leadership

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8
Q

What is our business?

A

Mission statement

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9
Q

What do we want to become?

A

Vision statement

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10
Q

The mission and vision statements must be aligned with the…

A
  • Corporate values
  • Strategies
  • Implementation Programs
  • Evaluation & Control
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11
Q

Essential Components of Mission / Vision Statements

A
  1. Customers
  2. Products or Services
  3. Markets
  4. Technology
  5. Concern for Survival, Growth and Profitability
  6. Philosophy
  7. Self-concept
  8. Concern for Public Image
  9. Concern for Employees
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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

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13
Q

External Analysis

A
  • Socio-Cultural Factors
  • Technological
  • Economic
  • Political-Legal
  • Competition
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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
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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
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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
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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
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18
Q

5 competitive forces that determine industry profitability

A
  1. Potential Entrants
  2. Buyers
  3. Substitutes
  4. Suppliers
  5. Industry Competitors
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19
Q

Strategic Management Process

A
  1. Study the external and internal environments.
  2. Identify marketplace opportunities and threats.
  3. Determine how to use core competencies.
  4. Use strategic intent to leverage resources, capabilities and core competencies and win competitive battles.
  5. Integrate formulation and implementation of strategies.
  6. Seek feedback to improve strategies.
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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

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21
Q

What does IFE stand for?

A

Internal Factor Evaluation

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22
Q

Level of Strategies

A
  1. Corporate Level
  2. Business Level
  3. Functional Level
  4. Operational Level
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23
Q

What is Corporation Level composed of?

A

Chief Executive Officer

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24
Q

What is the Business Level composed of?

A

Division President & Vice president

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25
Q

What is Functional level composed of?

A

Function manager

26
Q

What is operational level composed of?

A
  • Plant manager
  • Sales manager
  • Production manager
27
Q

Types of Corporate level strategies

A
  1. Portfolio strategy
  2. Grand strategies
28
Q

Kinds of Grand strategies

A
  1. Growth strategy
  2. Stability strategy
  3. Recovery/Retrenchment strategy
29
Q

Portfolio strategies

A
  1. Acquisition
  2. Unrelated diversification
  3. BCG Matrix
30
Q

Types of strategies

A
  1. Growth Strategy
  2. Retrenchment Strategy
  3. Stability strategy
31
Q

Involves increasing investment, this implies that the company is
aggressively trying to change its industry and competition condition.

A

Growth strategy (Offensive)

32
Q

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.

A

Retrenchment strategy (Defensive)

33
Q

means that
company avoid undertaking any changes and keep satisfy with the
current market position.

A

The Stability Strategy (maintain the status quo)

34
Q

Types of Business Level strategies

A
  1. 5 Industry Forces
  2. Positioning Strategies
  3. Adaptive Strategies
35
Q

Types of Positioning Strategies

A
  1. Cost leadership
  2. Differentiation
  3. Focus Strategy
36
Q

Adaptive Strategies

A
  1. Defenders
  2. Prospectors
  3. Analyzers
  4. Reactors
37
Q

> seek moderate growth
retain customers

A

Defenders

38
Q

> seek fast growth
emphasize risk taking and innovation

A

Prospectors

39
Q

> blend of defender & prospector strategies
imitate the proven successes

A

Analyzers

40
Q

> use an inconsistent strategy
respond to changes

A

Reactors

41
Q

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.

A

Vertical Integration

42
Q

Vertical Integration Strategies

A
  1. Forward Integration
  2. Backward Integration
43
Q

Gaining ownership or increased control over distributors or retailers

A

Forward Integration

44
Q

Seeking ownership or increased control of a firm’s suppliers

A

Backward Integration

45
Q

Forward integration strategy is effective when:

A
  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
Q

Backward integration strategy is effective when:

A
  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
Q

Factors to consider in Vertical Integration

A
  1. Costs
  2. Scope of the fim
48
Q

Advantages of the Vertical Integration Strategy

A

> 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
Q

Disadvantages of the vertical integration strategy

A

> 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
Q

Types of Intensive Strategies

A
  1. Market Penetration
  2. Market Development
  3. Product Development
51
Q

Seeking increased market share for present products or services in present markets through greater marketing efforts

A

Market
Penetration

52
Q

Introducing present products or services into new geographic areas

A

Market Development

53
Q

Seeking increased sales by improving present products or services or developing new ones

A

Product
Development

54
Q

Types of Diversification strategies

A
  1. Related Diversification
  2. Unrelated Diversification
55
Q

Adding new but related products and services.

A

Related Diversification

56
Q

Adding new, unrelated products and services.

A

Unrelated Diversification

57
Q

Types of Defensive Strategies

A
  1. Retrenchment
  2. Divestiture
  3. Liquidation
58
Q

Regrouping through cost and asset reduction to reverse declining sales and profit

A

Retrenchment

59
Q

Selling a division or part of an organization

A

Divestiture

60
Q

Selling all of a company’s assets, in parts, for their tangible worth

A

Liquidation

61
Q
A

Innovation and Strategy Formulation (1 decks)

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