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_____ is a comprehensive plan for accomplishing an organization's goals _____ is a way of approaching business opportunities and challenges; it is a comprehensive and ongoing management process aimed at formulating and implementing effective strategies _____ are those that promote a superior alignment between the organization and its environment and the achievement of strategic goals A well conceived strategy addresses three areas: Distinctive competence Scope Resource development _____ is something the organization does exceptionally well The _____ of a strategy specifies the range of markets in which an organization will compete _____ is how an organization will distribute its resources across the areas in which it competes Most businesses today also develop strategies at two distinct levels: Business level strategy Corporate level strategy _____ is the set of strategic alternatives from which an organization chooses as it conducts business in a particular industry or market _____ is the set of strategic alternatives from which an organization chooses as it manages its operations simultaneously across several industries and several markets _____ is the set of processes involved in creating or determining the strategies of the organization _____ is the methods by which strategies are operationalized or executed within the organization The primary distinction is along the lines of content versus process: the formulation stage determines _____, and the implementation stage focuses on _____ What the strategy is How the strategy is achieved _____ is a plan of action that an organization chooses and implements to support specific goals _____ is a pattern of action that develops over time in an organization in the absence of mission and goals or despite mission and goals The starting point in formulating strategy is usually _____ analysis SWOT Strengths Weaknesses Opportunities Threats In SWOT analysis, the best strategies accomplish an organization's mission by: (3 things) 1. Exploiting an organization's opportunities and strengths while 2. Neutralizing its threats and 3. Avoiding (or correcting) its weaknesses _____ are skills and capabilities that enable an organization to conceive of and implement its strategies Strengths may include such things as: - Deep pool of managerial talent - Surplus capital - Unique reputation and/or brand name - Well established distribution channels A _____ is an organizational capability possessed by a large number of competing firms; _____ exists when large numbers of competing firms are able to implement the same strategy A _____ is a strength possessed by only a small number of competing firms (rare among a set of competitors); organization's that exploit this often obtain a _____ Distinctive competence Competitive advantage _____ is the practice of duplicating another firm's distinctive competence and thereby implementing a valuable strategy When a distinctive competence cannot be imitated, strategies that exploit these competencies generate _____ - a competitive advantage that exists after all attempts at strategic imitation have ceased Sustained competitive advantage A distinctive competence might not be imitated for 3 reason: 1. The development of it may depend on unique historical circumstances that cannot be replicated 2. Because its nature and character might not be known or understood by competing firms 3. If it is based on complex social phenomena _____ are skills and capabilities that do not enable an organization to choose and implement strategies that support its mission Organizational weaknesses An organization has essentially 2 ways of addressing weaknesses: 1. May need to make investments to obtain the strengths required to supports its mission 2. May need to modify its mission so that it can be accomplished with the skills and capabilities that the organization possesses Organization's that fail either to recognize or to overcome their weaknesses are likely to suffer from _____ - which is when an organization is not implementing valuable strategies that are being implemented by competing organizations Evaluating opportunities and threats requires analyzing an organization's _____. _____ are areas that may generate higher performance. _____ are areas that increase the difficulty of an organization's performing at a high level Environment Organizational opportunities Organizational threats Formulating business level strategies - 3 important classification schemes are: Porter's generic strategies The Miles and Snow typology Strategies based on the product life cycle According to Michael Porter, organizations may pursue what 3 strategies at the business level? Differentiation Overall cost leadership Focus strategy _____ seeks to distinguish itself from competitors through the quality of its products or services; firms that implement this are able to charge more than competitors because customers are willing to pay more for the extra value they perceive Differentiation strategy (ex. Rolex) An organization implementing an _____ attempts to gain a competitive advantage by reducing its costs below the costs of competing firms; keep costs low so they can sell products at low prices Overall cost leadership strategy A firm pursing a _____ concentrates on a specific regional market, product line, or group of buyers Focus strategy (can have either a differentiation focus or an overall cost leadership focus) A second classification of strategic options was developed by Raymond Miles and Charles Snow; they suggested that business level strategies fall into 1 of 4 categories: Prospector Defender Analyzer Reactor A firm that follows a _____ is a highly innovative firm that is constantly seeking out new markets and new opportunities and is oriented toward growth and risk taking A company that follows a _____ concentrates on protecting its current markets, maintaining stable growth, and serving current customers, generally by lowering its costs and improving the performance of its products A business that uses an _____ attempts to maintain its current businesses and to be somewhat innovative in new businesses, combines elements of prospectors and defenders Analyzer strategy (most large companies use this approach) A business that follows a _____ has no consistent strategic approach; it drifts with environmental events; these firms do not usually perform as well as organizations that implement other strategies The _____ is a model that shows how sales volume changes over the life of products; understanding the 4 stages help managers recognize that strategies need to evolve over time Product life cycle: Introduction stage - First stage - Demand may be very high - Need to focus on getting products out the door - Manage growth, inventory, and cash flow Product life cycle: Growth stage - Second stage - More firms begin producing the product - Sales continue to grow - Ensure quality and delivery - Begin differentiating your product from competitors Product life cycle: Maturity stage - Third stage - Overall demand growth begins to slow down - Number of new firms producing the product begins to decline - This stage is essential if an organization is going to survive - Product differentiation concerns are still important - Keeping costs low and beginning the search for new products is also important Product life cycle: Decline stage - Fourth stage - Demand decreases - Number of organization's producing the product drops - Organization's that fail to anticipate this stage usually go out of business After business strategies are formulated, they must be _____ How to implement a differentiation strategy - Emphasize high quality and high value - Meet specific customer needs rather than simply reducing costs - Emphasize creativity, innovation, and response to customers needs How to implement an overall cost leadership strategy: - Focus on simple product attributes to meet customer needs in a low cost manner - Likely to engage in advertising - Have costs lower than competitors - Increased volume of production to reduce the per unit costs - KEEP COSTS LOW How to implement a prospector strategy: - Encourage creativity and flexibility - Adopt a decentralized organization structure How to implement a defender strategy: - Protect market from new competitors - Downplay creativity and innovation in bringing out new products - Focuses on lowering costs or improving performance of products How to implement an analyzer strategy: - Maintain current business and to be somewhat innovative in new business - Attributes tend to be similar to the prospector and defender strategies (tight financial controls, high flexibility, efficient production, customized products, creativity, and low costs) Most large organizations are engaged in several businesses, industries, and markets. Each business or set of businesses within such an organization is frequently referred to as a _____ Strategic business unit (SBU) Decisions about which businesses, industries, and markets an organization will enter, and how to manage these different businesses are based on an organization's _____; the most important strategic issue at the corporate level concerns organizational _____ Corporate strategy Diversification _____ describes the number of different businesses that an organization is engaged in and the extent to which these businesses are related to one another; there are 3 types, name them Diversification Single product strategy Related diversification Unrelated diversification An organization that pursues a _____ manufactures just one product or service; this product is often sold in a single market Most large businesses today operate in several different businesses, industries, or markets. If the businesses are somehow linked, that organization is implementing a strategy of _____ Bases of relatedness in implementing related diversification: Similar technology Common distribution and marketing skills Common brand name and reputation Common customers 3 primary advantages of related diversification - Reduces an organization's dependence on any one of its business activities (which reduces risk) - Reduce overhead costs - Exploit strengths in more than 1 business (synergy) Firms that implement a strategy of _____ operate multiple businesses that are not logically associated with one another (very popular in the 1970s) Unrelated diversification Unrelated diversification has 2 advantages: (but the disadvantages outweigh these so almost all organizations have abandoned this) - Have stable performance over time - Resource allocation advantages In implementing a diversification strategy, what 2 questions do organization's face? 1. How will the organization move from a single product strategy to some form of diversification? 2. Once the organization diversifies, how will it manage diversification effectively? Most organizations do not start out completely diversified, what are ways firms can become diversified? - Develop new products - Replacement of suppliers and customers - Mergers and acquisitions A company that stops buying supplies from other companies and begins to provide its own supplies has diversified through _____ Backward vertical integration An organization that stops selling to one customer and sells instead to that customer's customers has diversified through _____ Forward vertical integration Organizations engage in mergers and acquisitions to diversify through _____ by acquiring former suppliers or former customers; most organizations use them to acquire _____ or _____ Vertical integration Complementary products Complementary services The 2 major tools for managing diversification are: Organization structure Portfolio management techniques _____ are methods that diversified organizations use to determine which businesses to engage in and how to manage these businesses to maximize corporate performance; 2 important techniques of this are: Portfolio management techniques BCG matrix GE business screen The _____ provides a framework for evaluating the relative performance of businesses in which a diversified organization operates; also prescribes the preferred distribution of cash and other resources The BCG matrix uses 2 factors to evaluate an organization's set of businesses: Growth rate of a particular market The organization's share of that market The BCG matrix classifies the types of businesses in which a diversified organization can engage as: (name and describe the 4 things) Dogs - businesses that have a very small share of a market that is not expected to grow Cash cows - businesses that have a large share of a market that is not expected to grow substantially Question marks - businesses that have only a small share of a quickly growing market Stars - businesses that have the largest share of a rapidly growing market Because the BCG matrix is narrow and overly simplistic the _____ was developed which is a more sophisticated approach to managing diversified business units The GE business screen considers _____ and _____; these 2 factors are divided into 3 categories Industry attractiveness (determined by market growth and market share) Competitive position (market share) In general, the greater the market growth, the _____ the market, the _____ the capital requirements, and the _____ the competitive intensity, the more attractive an industry will be. The GE business screen classifies business units as: Winners Losers Question marks Average businesses Profit producers When using the GE business screen, in general, organizations should invest in _____ and _____; should maintain the market position of _____ and _____; and should sell _____ Winners Question marks Average businesses Profit producers Losers International businesses have the ability to exploit 3 sources of competitive advantage unavailable to domestic firms (name them) Global efficiencies (location efficiencies, economies of scale, economies of scope) Multimarket flexibility Worldwide learning International businesses typically adopt 1 of 4 strategic alternatives in their attempt to balance the three goals of global efficiencies, multimarket flexibility, and worldwide learning (name them) Home replication strategy Multidomestic strategy Global strategy _____ is an international strategy in which a company takes what it does exceptionally well in its home market and attempts to duplicate it in foreign markets Home replication strategy _____ is an international strategy where a firm manages itself as a collection of relatively independent operating subsidiaries, each of which focuses on a specific domestic market _____ is an international strategy where a firm views the world as a single marketplace and has its primary goal the creation of standardized goods and services that will address the needs of customers worldwide When applied to strategy it specifies the range of markets in which an organization will compete?scope of a strategy specifies the range of markets in which the organization will compete. resource deployment is how a company will distribute its resources across various areas.
What are 3 levels of strategy within an organization?The three levels are corporate level strategy, business level strategy, and functional strategy. These different levels of strategy enable business leaders to set business goals from the highest corporate level to the bottom functional level.
What is the strategic planning process?Strategic planning is a process in which an organization's leaders define their vision for the future and identify their organization's goals and objectives. The process includes establishing the sequence in which those goals should be realized so that the organization can reach its stated vision.
How is strategic planning carried out at different levels of the organization?Strategic planning can occur at different levels (corporate, business, and functional) in an organization. The number of levels may vary. However, if a company has multiple planning levels, the plans must be consistent, and all must help achieve the overall goals of the corporation.
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When applied to strategy it specifies the range of markets in which an organization will complete?
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