Exam 2

Long-term Objectives
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Terms in this set (48)
Long-term Objectives
Represent the results expected from pursuing certain strategies
Each objective should be associated with a timeline
8 Characteristics of Objectives
Quantitative
Measurable
Realistic
Understandable
Challenging
Hierarchical
Obtainable
Congruent across departments
Forward Integration
Involves gaining ownership or increased control over distributors or retailers
Backward Integration
Strategy of seeking ownership or increased control of a firm's suppliers
Horizontal Integration
Refers to a strategy of seeking ownership of or increased control over a firm's competitors
Market Penetration
Seeks to increase market share for present products or services in present markets through greater marketing efforts
Market Development
Involves introducing present products or services into new geographic areas
Product Development
Seeks increased sales by improving or modifying present products or services
Related Diversification
Adding new but related products or services
Unrelated Diversification
Adding new, unrelated products or services
RetrenchmentRegrouping through cost and asset reduction to reverse declining sales and profitDivestitureSelling a division or part of an organizationLiquidationSelling all of a company's assets, in parts, for their tangible worthPorter's Five Generic StrategiesCost Leadership Strategies Differentiation Strategies Focus StrategiesCost Leadership StrategiesType 1 and Type 2Differentiation StrategiesType 3Focus StrategiesType 4 and Type 5Joint VenturesA popular strategy that occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunityMergerOccurs when two organization of about equal size unite to form one enterpriseAcquisitionOccurs when a large organization purchases (acquires) a small firm, or vice versaEFEExternal Factor EvaluationCPMCompetitive Profile MatrixIFEInternal Factor Evaluation MatrixSWOTStrengths-Weaknesses-Opportunities-Threats MatrixSPACEStrategic Position and Action EvaluationBCGBoston Consulting Group MatrixIEInternal-External MatrixGSMGrand Strategy MatrixQSPMQuantitative Strategic Planning MatrixThe Input StageEFE CPM IFEThe Matching StageSWOT SPACE BCG IE GSMThe Decision StageQSPM8 Steps in a SWOT analysis§List the firm's key external opportunities List the firm's key external threats List the firm's key internal strengths List the firm's key internal weaknesses Match internal strengths with external opportunities, and record the resultant SO strategies in the appropriate cell Match internal weaknesses with external opportunities, and record the resultant WO strategies Match internal strengths with external threats, and record the resultant ST strategies Match internal weaknesses with external threats and record the resultant WT strategies.BCG MatrixQuestion Marks Stars Cash Cows DogsQuestion MarksDivisions in quadrant I have a low relative market share position, yet they compete in a high growth industry Usually these firms' cash needs are high and their cash generation is lowStarsQuadrant II businesses represent the organization's best long-run opportunities for growth and profitabilityCash CowsDivision positioned in quadrant III have a high relative market share position but compete in a low growth industryDogsQuadrant IV divisions of the organization have a low relative market share position and compete in a slow or no market growth industryCultureIncludes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes, and heroines that describe a firmBoard of DirectorsA group of individuals who are elected by the ownership of a corporation to have oversight and guidance over management and who look out for shareholder's interestsAnnual ObjectivesEssential for strategy implantation because: They represent the basis for allocating resources They are a primary mechanism for evaluating managers They are the major instrument for monitoring progress toward achieving long-term objectives Establish organizational, divisional, and departmental prioritiesPoliciesNeeded to make a strategy work Facilitate solving recurring problems and guide the implementation of strategy Refers to specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goalsConflictA disagreement between two or more parties on one or more issuesRestructuringInvolves reducing the size of the firm in terms of number of employees, number of divisions or units, and number of hierarchical levels in the firm's organizational structureReengineeringInvolves reconfiguring or redesigning work, jobs, and processes for the purpose of improving cost, quality, service, and speedResistance to changeCan be considered the single greatest threat to successful strategy implementation Regularly occurs in organizations in the form of sabotaging production machines, absenteeism, filing unfounded grievances, and an unwillingness to cooperateJITJust in time3 problems that can be traced to human resources and implementation of strategiesDisruption of social and political structures Failure to match individual aptitudes with implementation task Inadequate support for implementation activities