Term
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Definition
| Star managers realize a grand design using ____. |
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Term
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Definition
| large-scale action plan that sets the direction for an organization |
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Term
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Definition
| process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals |
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Term
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Definition
| where an organization is going over the next year or more, how it's going to get there, and how it'll know if it got there or not |
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Term
1) provide direction and momentum
2) encourage new ideas
3) develop a sustainable (over time) competitive advantage --> this is the most important |
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Definition
| Name 3 reasons why strategic management and strategic planning are important. |
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Term
1) being responsive to customers
2) innovation
3) quality
4) effectiveness |
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Definition
| What 4 areas does an organization need to stay ahead in to have a sustainable competitive advantage? |
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Term
| 5 steps of the strategic management process |
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Definition
1) establish the mission and vision
2) establish the grand strategy w/environmental scanning
3) formulate the strategic plans (using, e.g. Porter)
4) carry out the strategic plans
5) maintain strategic control
Feedback: revise actions if necessary, based on feedback (for each step) |
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Term
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Definition
| after an assessment of current organizational performance, ___ explains how the organization's mission is to be accomplished |
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Term
1) growth strategy
2) stability strategy
3) defensive strategy (retrenchment) |
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Definition
| Name 3 common grand strategies |
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Term
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Definition
| a grand strategy that involves expansion- as in sales revenues, market share, # of employees, or # of customers |
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Term
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Definition
| a grand strategy that involves reduction in the organization's efforts; retrenchment |
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Term
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Definition
| a grand strategy that involves little or no significant change |
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Term
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Definition
| when a company pulls back to its core services |
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Term
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Definition
gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately
[ex. industry benchmarking, web info, professional mole, patents] |
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Term
1) public prints & advertising
2) investor information (ex. from SEC)
3) informal sources (ex. trade shows) |
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Definition
| what are 3 sources that can be used to gain competitive intelligence? |
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Term
1) threat of new entrants
2) bargaining power of suppliers
3) bargaining power of buyers
4) threat of substitute products or services
5) rivalry among competitors |
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Definition
| what are Porter's 5 competitive forces? |
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Term
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Definition
| careful monitoring of an organization's internal and external environments to detect early signs of opportunities and threats that may influence the firm's plans |
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Term
1) cost-leadership
2) differentiation
3) cost-focus
4) focus-differentiation |
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Definition
| what are Porter's 4 competitive strategies? |
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Term
| cost-leadership & differentiation |
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Definition
| which of Porter's strategies apply to a WIDE market? |
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Term
| cost-focus & focus-differentiation |
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Definition
| which of Porter's strategies apply to a NARROW market? |
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Term
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Definition
| keep the costs, and hence prices, of a product or service below those of competitors and to target a wide market |
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Term
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Definition
| offer products that are unique and superior value compared to those of competitors but to target a wide market; primary, most used strategy |
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Term
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Definition
| keep the costs of a product below those of competitors and to target a narrow market |
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Term
| focused-differentiation strategy |
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Definition
| offer products that are of unique and superior value compared to those of competitors and to target a narrow market |
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Term
1) cost-leadership: Walmart
2) differentiation: mp3 players w/FM radios
3) cost-focus: low cost cigarettes/beer
4) focused-differentiation: adult model rockets |
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Definition
| Give an example(s) of each of Porter's strategies |
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Term
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Definition
| when a company makes and sells only one product within its market |
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Term
Benefit- focus (experts in 1 product)
Risk- vulnerability (if ppl. stop buying) |
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Definition
| what are the benefits and risks of a single-product strategy? |
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Term
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Definition
| operating several businesses in order to spread the risk |
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Term
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Definition
| what are the 2 types of diversification? |
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Term
| unrelated diversification |
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Definition
| operating several businesses under one ownership that are not related to one another; independent business lines [ex. GE] |
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Term
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Definition
| when an organization under one ownership operates separate businesses that are related to one another; ___ business lines [ex. Burberry] |
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Term
1) reduced risk- b/c of more than 1 product (makes up for slackers)
2) management efficiencies- administration spread over several businesses (overhead costs spread throughout businesses)
3) synergy- providing a one-stop shop for customers (the sum is greater than the parts- strengths in one business can be applied to another) |
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Definition
| what are the 3 advantages of related diversification? |
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Term
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Definition
| the economic value of separate, related businesses under one ownership and management is greater together than the businesses are worth separately |
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