Term
|
Definition
(Strategic planning or long range planning) Developing a corporation's mission, objectives, strategies, and policies.
-begins with situation analysis (process of finding a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses. |
|
|
Term
|
Definition
-survey of 2700 execs, 82% think the most relevant activities for strat. formulation were SWOT analysis
-82.7% use SWOT |
|
|
Term
| Primary Criticisms of SWOT |
|
Definition
-Generates lengthy lists
-uses no weights to reflect priorities
-uses ambiguous words and phrases
-same factor can be placed in more than one category
-no obligation to verify opinions with data/analysis
-requires only a level of analysis
-no logical link to strat. implementation |
|
|
Term
|
Definition
Strategic Factors Analysis Summary
-Summarizes an organization's strategic factors by combining the external factors from the EFAS table with the internal factors from the IFAS table. |
|
|
Term
|
Definition
1. Most important EFAS and IFAS items. after each list if it is a S,W,O, or T
2. Weight, weight column must total 1.00
3. assign a rating of how the company's mgmt is responding to each factor
4. multiply weight by rating
5. indicate s-t, i-t, and l-t
6. (Comments) total weighted avg. firm in an industry is always 3 |
|
|
Term
|
Definition
| an extremely favorable niche |
|
|
Term
|
Definition
| where a company is able to satisfy customers' needs in a way that rivals cannot, given the context in which it operates. |
|
|
Term
|
Definition
| a unique market opportunity that is only available for a particular window of time. |
|
|
Term
|
Definition
| Unifying theme for a corporations businesses in a mission |
|
|
Term
|
Definition
| Illustrates how external opps/threats can be matching with strengths/weaknesses to result in four sets of possible strategic alternatives. |
|
|
Term
|
Definition
| how a company can use it's strengths to to take advantage of opportunities |
|
|
Term
|
Definition
| A company's or Unit's strengths as a way to avoid threats |
|
|
Term
|
Definition
| attempt to take of opportunities by overcoming weaknesses |
|
|
Term
|
Definition
| basically defensive and primarily act to minimize weaknesses and avoid threats |
|
|
Term
|
Definition
| focuses on improving the competitive position of a company's or a business unit's products or services within the specific industry or market segment that the company or business unit serves. |
|
|
Term
|
Definition
raises following questions:
-Should we compete on basis of lower cost (thus price), or differentiate products on something like quality or service.
-Compete head to head for biggest but most sought-after share of the market or focus on a niche to satisfy a less sought-after but also profitable segment of market? |
|
|
Term
|
Definition
| ability of a company to design, produce, and market a comparable product more efficiently than competitors |
|
|
Term
|
Definition
| provide unique and superior value to the buyer in terms of product quality, special features, or after-sale service. aimed at the broad mass market and involves the creation of a product or service that is perceived through its industry as unique. |
|
|
Term
|
Definition
| breadth of the company's or business unit's target market. |
|
|
Term
| cost leadership and differentiation |
|
Definition
| when lower-cost and diff. strategies have a broad mass-market target |
|
|
Term
| cost focus and differentiation focus |
|
Definition
| focused on a market niche |
|
|
Term
|
Definition
| lower-cost competitive strategy that aims at the broad mass market and requires "aggressive construction of efficient-scale facilities, vigorous pursuit of cost reductions from experience, tight cost and overhead control, avoidance of marginal customer accounts, and cost minimization in areas like R&D, service, sales force, advertising, and so on" |
|
|
Term
|
Definition
| low-cost comp. strat. that focuses on a particular buyer group or geographic market and attempts to serve only this nice. |
|
|
Term
|
Definition
| concentrates on a particular buyer group, product line, or geographic segment. |
|
|
Term
|
Definition
Cost- competitors imitate, tech. advances, other bases for cost leadership erode.
Diff.-competitors imitate, bases for diff. become less important to buyers.
Focus-structure erodes, demand disappears, segment differences from other segments narrow, advantages of a broad line increase. |
|
|
Term
|
Definition
| In differentiation strategy, must ensure that the higher price it charges for its higher quality is not too far above the price of the competition; otherwise customers will not see the extra quality as worth the extra cost. |
|
|
Term
|
Definition
| when a company does not acheive one of the generic comp. strategies (cost/differentiation) |
|
|
Term
|
Definition
1. Performance-primary operating characteristics
2. Features- "Bells and whistles"
3. Reliability- Probability that a product will continue to function without significant maintainance
4. Conformance- Degree to which a product meets standards. (perform just as good as the one on showroom floor)
5. Durability- Number of years of life
6. Serviceability- Product's ease of repair
7. Aesthetics- How a product appeals to senses
8. Perceived Quality- Products over reputation. Especially important if there are no objective, easily used measures of quality |
|
|
Term
|
Definition
| Many small and medium sized local companies compete for relatively small shares of the total market, focus strategies will likely predominate |
|
|
Term
|
Definition
| as industry matures, fragmentation is overcome, and becomes dominated by a few large companies. |
|
|
Term
|
Definition
efficient way to quickly consolidate a fragmented industry. With the aid of money from venture capitalists, an entrepreneur acquires hundreds of owner-operated small businesses. The resulting firm creates economies of scale by building reg./natl brands, applies best practices across all aspects of marketing and ops, and hires more sophisticated managers than the small businesses could previously afford. 3 ways it is different:
1. involve large numbers of firms.
2. acquired firms are typically owner operated
3. objective is not to gain incremental advantage but to reinvent entire industry. |
|
|
Term
|
Definition
| market stability is threatened by short product life cycles, short product design cycles, new tech, frequent entry by unexpected outsiders, repositioning by incumbents, and tactical redefinitions of market boundaries as diverse industries merge. |
|
|
Term
| Reactions to an industry becoming hypercompetitive |
|
Definition
1. initially compete on cost/quality until abundance of high-quality, low priced goods resut.
2. Move into untapped markets, others usually imitate until too costly
3. Firms raise entry barriers to limit competitors (economies of scale, distribution agreements, and strategic alliances) |
|
|
Term
|
Definition
| Specific operating plan that details how a strategy is to be implemented in terms of when and where it is to be put into action. |
|
|
Term
|
Definition
| deals with when a company implements a strategy. |
|
|
Term
|
Definition
| (or pioneer) First company to manufacture and sell a new product or service. |
|
|
Term
|
Definition
| May be able to imitate tech. advances of first movers (low R&D), keep risks down by waiting until a new tech standard or market is established. take advantage of the first mover's natural inclination to ignore market segments. |
|
|
Term
| Market Location Tactic (offensive/defensive) |
|
Definition
Where the company implements a strategy.
-Offensive- takes place in an established competitor's market location
-Defensive- takes place in a the firm's own current market position as a defense against possible attack by a rival |
|
|
Term
| Offensive Tactics (Market Location) |
|
Definition
1. Frontal assault-Attacking firm goes head to head with competitor matches competitor in every category. must have superior resources/willingness to persevere.
2. Flanking Maneuver- Attack a part of the market where competitor is weak.
3. Bypass attack- Change rules of the game; attempts to cut the market out from under the established defender by offering a new type of product that makes the competitor's product unnecessary.
4. Encirclement- Usually evolving out of frontal/flanking, attacking company encircles competitors position in terms of products or markets or both.
5. Guerrilla warfare- hit and run. use of small intermittent assaults on different market segments held by the competitor. |
|
|
Term
| Defensive Attacks (Market Location) |
|
Definition
1. Raise Structural Barriers:
a. offer full line of products in every profitable market segment to close off entry points.
b. Block channel acces by signing exclusive agreements with distributors.
c. Raise buyer switching costs by offering low-cost training to users.
d. Rase cost of gaining trial users by keeping prices low on items new users are likely to purchase
e. Increase scale economies to reduce unit costs.
f. Foreclose alternative techs through patenting/licensing.
g. limit outside acces to facilities/personnel
h. tie up suppliers by obtaining exclusive contracts or purchasing key locations.
i. avoid suppliers that also serve competitors
j. encourage gov't. to raise barriers (safety/pollution standards.
2. Increase expected retalitation- any action that increases the perceived threat of retaliation for an attack.
3. Lower the inducement for attack- Reduce challenger's expectations for future profits in the industry. |
|
|
Term
|
Definition
| gain advantage within industry by working with other firms |
|
|
Term
|
Definition
| Active cooperation of firms within an industry to reduce output and raise prices in order to get around the normal economic law of supply and demand. |
|
|
Term
|
Definition
Long-term cooperative arrangement between 2+ independent firms or business units that engage in business activities for mutual economic gain. Reason:
1. Obtain/learn new capabilities
2. Obtain access to specific markets
3. Reduce financial risk
4. Reduce political risk |
|
|
Term
| Mutual Service Consortium |
|
Definition
| Partnership of similar companies in similar industries that pool their resources to gain a benefit that is too expensive to develop alone, such as access to advanced tech. |
|
|
Term
|
Definition
| "Cooperative business activity, formed by two or more separate corporations for strategic purposes, that creates an independent business entity and allocates ownership, operational responsibilities, and financial risks and rewards to each member, while preserving their separate identity/autonomy." |
|
|
Term
|
Definition
| agreement in which the licensing firm grants rights to another firm in another country or market to produce and/or sell a product. |
|
|
Term
|
Definition
| strong and close alliance in which one company or unit forms a long-term arrangement with a key supplier or distributor for mutual advantage. |
|
|
