- process of choosing among different strategies and altering them to best fit the organizations needs-must be translated into specific strategic plans- determine what the organizations long term goals should be for the next 1-5 years
  • Benchmarking
  • Cost focus strategy
  • Strategy formulation
  • Strategic management small firms
- turn to strategy formulation
  • After assessing the current reality
  • Strategy implementation
  • Tools for assessing the current reality
  • Porters model for industry analysis
- consists of monitoring the execution of strategy and making adjustments, if necessary- need control systems to monitor progress and take corrective action, when things go awry.- corrective action constitutes a feedback loop in which a problem requires that managers return to an earlier step to rethink policies, redo budgets, or revise personnel arrangements
  • Threats of substitute products or services
  • Establish the mission, vision, and values statements
  • Maintain strategic control: the feedback loop
  • Contingency planning
- Porters model- can take away customers from existing organizations
  • Single product strategy
  • Threats of substitute products or services
  • Threats of new entrants
  • Cost leadership strategy
- makes and sells only one product within its market- allows you to focus manufacturing and marketing efforts- increased vulnerability
  • Single product strategy
  • Cost leadership strategy
  • Rivalry among competitors
  • Strategy implementation
- vision = long term goal of what it wants to become, expressed in a vision statement, describes long term direction and strategic intent- should be positive, stretch the organization and its employees to achieve a desired future state that appears beyond its reach
  • Formulate the grand strategy
  • Threats of substitute products or services
  • Maintain strategic control: the feedback loop
  • Characteristic of a good vision statement
- W. Chan Kim- Renee Mauborgne- refers to a company creating a new uncontested market space that makes competitors irrelevant, creates new consumer value, decreases costs- create a completely new industry or create a blue ocean within a red oceanred ocean= industry boundaries are defined and accepted
  • Cost focus strategy
  • Innovation strategy
  • Defensive strategy
  • Blue ocean strategy
- public prints and advertising- investor information- informal sources, industry gossip, salespeople
  • Strategy requires trade offs in competing
  • Strategy is the creation of a unique and valuable position
  • Sources for gaining competitive intelligence
  • Tools for assessing the current reality
- boston consulting group- means of evaluating strategic business units on the basis of:business growth ratesmarket share- an organization will do better in fast growing markets in which it has a high market share rather than in slow growing markets in which it has a low market share
  • BCG matrix
  • Execution
  • diversification
  • SWOT analysis
- competitive intelligence- SWOT- forecasting- benchmarking- Porters model for industry analysis
  • Threats of substitute products or services
  • Tools for assessing the current reality
  • Focused differentiation strategy
  • Characteristics of a good mission statement
- grand strategy- involves expansion as in sales revenue, market share, number of employees, number of customers- often takes the form of an innovation strategy- improve existing product/service-increase promotion/marketing- expand operations- add new products/services- acquire other businesses- mergers
  • Stability strategy
  • Assess the current reality
  • Growth strategy
  • Formulate the grand strategy
- also called situational analysis- Strengths, Weaknesses, Opportunities, and Threats affecting the organizations- should provide a realistic understanding of your organization- divided into 2 parts, inside matters and outside matters
  • Strategic positioning
  • Environmental scanning
  • Strategic control
  • SWOT analysis
- grand strategy- also called retrenchment strategy- involves reduction in the organizations efforts- reduce costs- sell off assets- phase out products- bankruptcy
  • Defensive strategy
  • Cost focus strategy
  • Formulate the grand strategy
  • Innovation strategy
- strategic positioning- fit has to do with the ways a companies activities interact and reinforce one another
  • Techniques that can be used to formulate strategy
  • Strategy involves creating a fit among activities
  • Threats of substitute products or services
  • Strategy is the creation of a unique and valuable position
-step 2 strategic management process-perform a current reality assessment or organizational assessment-- look at where the organization stands and see what is working and what could be different so as to maximize efficiency and effectiveness in achieving the organizations mission- use SWOT analysis, forecasting, benchmarking, porters model for industry analysis
  • Formulate the grand strategy
  • Assess the current reality
  • Defensive strategy
  • Blue ocean strategy
- external organizational opportunities and threats
  • Outside matters
  • SWOT analysis
  • Inside matters
  • Cost focus strategy
strategy is the creation of a unique and valuable positionstrategy requires trade-offs in competingstrategy involves creating a fit among activities
  • Techniques that can be used to formulate strategy
  • Three key principles underlying strategic positioning
  • Strategy requires trade offs in competing
  • 5 steps of the strategic management process
- mission- organizations purpose or reason for being, expressed in the mission statement
  • Characteristic of a good vision statement
  • Sources for gaining competitive intelligence
  • Characteristics of a good mission statement
  • Strategy requires trade offs in competing
- can benefit but if the small improvement in performance is not worth the effort involved in strategic planning unless a firm is in a very competitive industry where small differences in performance may affect survival potential
  • Porters model for industry analysis
  • Strategic management small firms
  • Maintain strategic control: the feedback loop
  • Strategy involves creating a fit among activities
- single most important strategist working today
  • Threats of new entrants
  • Michael porter
  • Bargaining power of suppliers
  • Innovation strategy
- attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company- performing similar activities in different ways- performing similar activities in different ways
  • Strategic management small firms
  • Single product strategy
  • Strategic positioning
  • vertical integration
- skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its vision
  • Rivalry among competitors
  • Competitive intelligence
  • Cost leadership strategy
  • Organizational strengths
- monitoring the execution of strategy and taking corrective action if needed- to keep a strategic plan on track you need to:engage peoplekeep it simplestay focusedkeep moving
  • Defensive strategy
  • Strategic control
  • Differentiation strategy
  • Strategy formulation
- porters 4 competitive strategies- offer products or services that are of unique and superior value compared with those of competitors but to target a wide market
  • Cost focus strategy
  • Competitive intelligence
  • Differentiation strategy
  • Focused differentiation strategy
- gaining information about ones competitors activities so that you can anticipate their moves and react appropriately
  • Strategy implementation
  • Differentiation strategy
  • Innovation strategy
  • Competitive intelligence
- porters model- influenced by the other 4 factors- internet has intensified rivalries- SWOT analysis
  • Threats of new entrants
  • Rivalry among competitors
  • Strategy implementation
  • Threats of substitute products or services
-strategic positioning- some strategies are incompatible- choose what strategy to follow and what strategy not to follow
  • Threats of substitute products or services
  • Tools for assessing the current reality
  • Strategy involves creating a fit among activities
  • Strategy requires trade offs in competing
- operating several businesses in order to spread risk- vertical integration
  • diversification
  • Characteristics of a good values statement
  • Organizational weaknesses
  • BCG matrix
- porters 4 competitive strategies- diversification- blue ocean strategy- BCG matrix
  • Sources for gaining competitive intelligence
  • Cost focus strategy
  • Techniques that can be used to formulate strategy
  • Three key principles underlying strategic positioning
- step 4 strategic management process- putting strategic plans into effect- top managers need to check on possible roadblocks within the organizations structure and culture and see if the right people and control systems are available to execute the plans
  • Establish the mission, vision, and values statements
  • Implement the strategy
  • Environmental scanning
  • Assess the current reality
- porters model- customers who buy a lot have more bargaining power than those who don't- power to force down asking price
  • organizational culture
  • Organizational weaknesses
  • BCG matrix
  • Bargaining power of buyers
-2nd core process- consider how success will be accomplished - take realistic and critical view of capabilities- finance, sales, manufacturing
  • Execution
  • Strategic control
  • Strategy
  • Strategy implementation
- 3rd core process- need to consider what path will be followed- whose going to get it done?- should address all major activities- define short term objectives- provide targets to aim at
  • Operations
  • Execution
  • People
  • SWOT analysis
- process by which a company compares its performance with that of higher-performing organizations- continuous process of measuring products, services, and practices against the toughest competitors
  • Growth strategy
  • Benchmarking
  • Strategic control
  • Trend analysis
- step 3 strategic management process- translate broad mission and value statements into a grand strategy- after assessment of current reality, explain how the organizations mission is to be accomplished
  • Defensive strategy
  • Formulate the grand strategy
  • Strategy implementation
  • Establish the mission, vision, and values statements
- porters model- internet places organization in a better position to switch to other products or services when circumstances threaten their usual channels
  • Strategy requires trade offs in competing
  • Techniques that can be used to formulate strategy
  • Threats of substitute products or services
  • Rivalry among competitors
-SWOT- internal organizational strengths and weaknesses
  • Innovation strategy
  • Michael porter
  • Inside matters
  • Stability strategy
-step 1 strategic management process- mission statement: purpose/reason for being- vision statement: what the organization wants to become/ where wants to go-values statement: what it stands for, core priorities, employee values, contributions
  • Formulate the grand strategy
  • Assess the current reality
  • Establish the mission, vision, and values statements
  • 5 steps of the strategic management process
trend analysiscontingency planning
  • Two types of forecasting
  • Cost leadership strategy
  • Stability strategy
  • Three common grand strategies
- next point in establishing grand strategy after competitive intelligence- careful monitoring of an organizations internal or external environments to detect early signs of opportunities and threats that may influence the firms plans- swot analysis
  • Strategic positioning
  • Environmental scanning
  • Formulate the grand strategy
  • Implement the strategy
- system of shared beliefs and values that guides behavior of members- effective execution requires supportive culture
  • organizational culture
  • Organizational threats
  • Organizational strengths
  • Characteristics of a good values statement
- grand strategy- involves little or no significant change- authenticity
  • Cost focus strategy
  • Innovation strategy
  • Strategy implementation
  • Stability strategy
- or scenario analysis is the creation of alternative hypothetical but equally likely future conditions- alternative combinations of different factors, economic pictures, competitor strategies, budgets, so on- 5 or so years into the future- equips organization to prepare for emergencies and uncertainty- gets managers thinking strategically
  • Blue ocean strategy
  • Strategy formulation
  • Cost focus strategy
  • Contingency planning
- drawbacks that hinder an organization in executing strategies in pursuit of its vision
  • Characteristics of a good values statement
  • Organizational weaknesses
  • Organizational opportunities
  • diversification
- strategic positioning- emerges from three sourcesfew needs many customersbroad needs, few customersbroad needs, many customers
  • Strategy requires trade offs in competing
  • Three key principles underlying strategic positioning
  • Strategy is the creation of a unique and valuable position
  • Strategy involves creating a fit among activities
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