Explains the essence of an organization-- why it exists, what it wants to be, who serves it, and why it should continue. contains:purpose, value, place in the world.
Having the ability to transform inputs into goods and services at a maximum profit on a sustained basis better than one's competitors. You want to be in imperfect competition
Selling your product at lower cost, High volume sales. Perceived value (price vs quality) EX...(State University, Jet Blue, Kia, Old Navy, TImex))
Unique Products/ Services/ Delivery Channel... EX... (Toyota quality"residual value", Amazon, Zappos "no shipping", Weber Grills, lexus, Ralph lauren, rolex, Neiman Marcus.)))
Unique Product within a semented niche.. Particular product, end-user, or geography.. EX.. Rolls Royce, Ferrari, High end Golf courses, Tag Hauer, Edward Jones))
Stuck in the Middle
not fully committed to one of the 3 generic strategies.. EX (Sears, target, mid price golf courses), starbucks now.
Strategic MGMT process
ID the Organization's misson and objectives, Analyze the Environment or Analyze the organizations resources. --->Formulate strategy, Implement strategy, Evaluate and monitor results.
S+W= Strengths and Weaknesses of the Oranization, O+T= opportunities and threats of the Environment. This analysis is to identify sources of Competitive advantage.
Levels of Strategic Analysis
Corporate Strategy, Business Unit Strategy, Functional strategy/tactics
What business are we in? Allocation of resources among business units. Ex. Pepsi Co
Business Unit Strategy
ID keys sources of competitive adv. in terms of cost of differentiation for a particular product/market.
Boston Consulting Group Matrix. Positioning Chart for your industry(Cow=low growth, high market share)(DoG=low growth, low mrkt share *Dump the Dogs)(Question Marks??? =low mrkt share, high growth rate-- --Ask urself if you think the product is worth investing into)(Stars** High, high -take cash they need cash to keep growing, Marvel is a star, all stars become cash cows as the markets mature.)
this is important because each sector this analyzes represent an important segment of the environment that potentially influences the survival and effectivenes of the organization.
Human Resources, Raw Materials, Financial Resources, consumer Mrkts, Technology Sector, Industry Sector, ****Economics and Government Sectors----Most important are the last two. All of this is analyzed by SWOT.
Porter's 5 force model
Threat of Substitute products, Bargaining power of supplier, bargaining power of buyer, threat of new entry, Rivalry among existing competitors.