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45 terms

Management- Strategy formulation and implementation

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Strategic management
A process that involves managers from all parts of the organization in the formulation and implementation of strategic goals and strategies.
Strategy
The plan of action that prescribes resource allocation dealing with the environment an organization finds itself in and the map of how to attain it's goals
Core competence
A business activity that an organization does paticularly well in comparison to competitors
Corporate level strategy
the level of strategy concerned with the question "What business are we in?" Pertains to the organization as a whole and the combination of business units and product lines that make it up.
Business level strategy
the level of strategy concerned with the question " how we compete?" pertains to each business unit or product line within the organization
Functional level strategy
The level of strategy concerned with the question"How do we support the business-level strategy?" Pertains to all of the organization's major departments.
Strategy formulation
the stage of strategic development that involves the planning and decision making that lead to the establishment of the orgs goals and of a specific strategy plan
Strategy implementation
the stage of strategic management that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcome
SWOT analysis
strengths, weaknesses, opportunities, threats
Situation analysis
Typically includes a search for strengths, weaknesses, opportunities and threats (SWOT) that affect organizational performance
BCG
Boston Consulting Group
BCG matrix
a concept developed by the boston consulting group that evaluates the SBUs with respect to the dimension of business growth rate and market share
Stars
Rapid growth and expansion investments for the organization
Cash cows
Steady profit producers, functioning investments for the organization
Question marks
New ventures, risky investments for the organization, some become stars, others divested
Dogs
Non performer investment for the organization, some profit, consider divestment
Strategic business unit
a division of the organization that has a unique business mission, product line, competitors, and markets relative to other sbus in the same corporation
Portfolio strategy
a type of corporate level strategy that pertains to the organization's mix of BSUs and product lines that fit together in such a way as to provide the corporation with synergy and competitive advantage
Michael E. Porter
Author and Harvard Business School Professor. Created the Five Forces, and is an expert in Competitve Strategy
Potential new entrants
capital requirements and economies of scale are examples of two potential barriers to keep new competitors out.
Threat of substitute products
power of alternatives and substitutes for company's product may be affected by changes in cost or in trends such as increased health consciousness that will deflect buyer loyalty. Internet created a greater threat of new subs. enabling new approaches to meeting customer needs.
Bargaining power of buyers
ability of buyers to bargain down prices charged by firms in the industry or to raise the costs of firms in the industry by demanding better product quality and service
Bargaining power of suppliers
a measure of the influence that suppliers of parts, materials, and services to firms in an industry have on the prices of these inputs
Differentiation
A type of competitive strategy with which the organization seeks to distinguish its products or services from competitiors
Cost leadership
a type of competitive strategy with which the organization aggressively seeks efficient facilities, cuts costs, and employs tight cost controls to be more efficient than competitors.
Focus
A type of competitive strategy that emphasizes concentration on a specific regional market or buyer group
Partnership strategies
A strategy which firms cooperate instead of competing with eachother for greater results
Synergy effect
1+1>2
Leadership
the ability to influence people toward the attainment of organizational goals
Structural design
Begins with the organization chart, shows manager's responsibilities and degree of authority and the consideration of facilities, departments, and divisions
Information and control systems
Includes reward systems, pay insentives, budgets, allocating resources, I.T., rules and procedures
Human resources
the broad category of human efforts, both physical and mental, used to produce goods and services
Growth strategy
a strategy that focuses on increasing profits, revenues, market share, or the number of places in which the company does business
Retrenchment
the reduction of expenditures in order to become financial stable
Liquidation
termination of a business operation by selling its assets to pay for its liabilities
divestment
the exit of a business from a firm's portfolio, opposite of investment
Globalization strategy
growth to a global or worldwide scale, the standardization of products and advertising for the international market
Transnational strategy
Seeks to balance global efficiencies and local responsiveness- customization for product/ advertising strategies
Multidomestic strategy
Handles markets independently for each country, adapts products/ advertising to local tastes and needs
Strengths
Positive internal characteristics that the organization can use to achieve it's strategic performance goals
Weaknesses
Internal characteristics that might inhibit or restirct the organization's performance
Opportunities
Things in the external environment that might help the organization achieve or exceed it's strategic goals
Threats
Things in the external environment that may prevent the organization from achieving it's strategic goals
Rivalry among competitors
High when competition is fierce in a market and low when competition is more complacent`
Degree of collaboration
Preferred supplier arrangements, Strategic business partnership, joint ventures, mergers, acquisitions