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Chapter 5

Terms in this set (22)

strategic management
What an organization does to achieve its mission and vision. reflects what a firm is doing to achieve its mission and vision, as seen by its achievement of specific goals and objectives.
strategic management process
the process by which a firm manages the formulation and implementation of its strategy
strategy formulation
business planning,
Strategy implementation
tells managers how they should go about putting the desired strategy into action
corporate strategy
"What business or businesses should we be in?" and "How does our business X help us compete in business Y, and vice versa?" In many ways, corporate strategy considers an organization to be a portfolio of businesses, resources, capabilities, or activities
synergy
exists when the interaction of two or more activities (such as those in a business) create a combined effect greater than the sum of their individual effects
diversification
where an organization participates in multiple businesses that are in some way distinct from each other,
diversification strategies
(1) concentric diversification, where the new business produces products that are technically similar to the company's current product but that appeal to a new consumer group; (2) horizontal diversification, where the new business produces products that are totally unrelated to the company's current product but that appeal to the same consumer group; and (3) conglomerate diversification, where the new business produces products that are totally unrelated to the company's current product and that appeal to an entirely new consumer group.
business strategy
focuses on how a given business needs to compete to be effective. Again, all organizations need strategies to survive and thrive
SWOT analysis
strengths, weaknesses, opportunities, and threats
sustainable competitive advantage
a competitive advantage that other companies have tried unsuccessfully to duplicate and have, for the moment, stopped trying to duplicate
Opportunities
assess the external attractive factors that represent the reason for a business to exist and prosper
Threats
include factors beyond your control that could place the strategy, or the business, at risk
VRIO
internal strategy tool
things that ruin the strategy
(1) the plan is poorly constructed, (2) competitors undermine the advantages envisioned by the plan, or (3) the plan was good but poorly executed.
Intended strategy
strategy as conceived by the top management team.
realized strategy
..., the strategy that actually takes place, The actual strategy that is implemented and comes to fruition as a consequence of implementation and other internal and external factors.
emergent strategy
the decisions that emerge from the complex processes in which individual managers interpret the intended strategy and adapt to changing external circumstances
deliberate
a plan of action, following from intended strategy
strategy design
design and emergence
strategic focus
when an organization is very clear about its mission and vision and has a coherent, well-articulated strategy for achieving those
Porter 3 generic strategies
(1) overall cost leadership- strategy where a firm's competitive advantage is based on the bet that it can develop, manufacture, and distribute products more efficiently than competitors.
, (2) differentiation- strategy where competitive advantage is based on superior products or service and
(3) focus strategy.concentrates on meeting the specialized needs of its customers.
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