Aim 40 - Chapter 8

Front 1

Planning

Back 1

Identifying and selecting appropriate goals and courses of action; one of the 4 principle tasks of management.

Front 2

Strategy

Back 2

A cluster of decision about what goals to pursue, what actions to take, and how to use resources to achieve goals.

Front 3

Three steps of the planning process:

Back 3

1) Determine the organization's mission and goals

2) Formulate strategy

3) Implement strategy

Front 4

Four main reasons planning is important:

Back 4

1) Planning i necessary to give the organization a sense of direction and purpose.

2) Planning is a useful way of getting managers to participate in decision making about the appropriate goals and strategies for an organization.

3) A plan helps coordinate managers of the different functions and divisions of an organization to ensure that they all pull in the same direction and work to achieve its desired future state.

4) A plan can be used as a device for controlling managers within an organization.

Front 5

Four qualities that effective plans should have:

Back 5

1) Unity - at any one time only one central, guiding plan is put into operation to achieve an organizational goal.

2) Continuity - planning is an ongoing process in which managers build and refine previous plans and continually modify plans at all levels so they fit together into one broad framework.

3) Accuracy - managers need to make every attempt to collect and utilize all available information at their disposal in the planning process.

4) Flexibility - plans need to be altered and changed if the situation changes.

Front 6

Corporate-Level Plan

Back 6

Top management's decisions pertaining to the organization's mission, overall strategy, and structure.

Front 7

Corporate-Level Strategy

Back 7

A plan that indicates in which industries and national markets an organization intends to compete.

Front 8

Business-Level Plan

Back 8

Divisional managers' decisions pertaining to divisions' long-term goals, overall strategy, and structure.

Front 9

Business-Level Strategy

Back 9

A plan that indicates how a division intends to compete against its rivals in an industry.

Front 10

Functional-Level Plan

Back 10

Functional managers' decisions pertaining to the goals that they propose to pursue to help the division attain its business-level goals.

Front 11

Functional-Level Strategy

Back 11

A plan of action to improve the ability of each of an organization's functions to perform its task-specific activities in ways that add value to an organization's goods and services.

Front 12

Time Horizon

Back 12

The intended duration of a plan.

Front 13

Standing Plans

Back 13

Used in scenarios in which programmed decision making is appropriate.

Front 14

Single-Use Plans

Back 14

Developed to handle nonprogrammed decision making in unusual or one-of-a-kind situations.

Front 15

Scenario Planning

Back 15

The generation of multiple forecasts of future conditions followed by an analysis of how to respond effectively to each of those conditions.

Also known as contingency planning.

Front 16

Strategic Leadership

Back 16

The ability of the CEO and top managers to convey a compelling vision of what they want the organization to achieve to their subordinates.

Front 17

Strategy Formulation

Back 17

The development of a set of corporate-, business-, and functional-level strategies that allow an organization to accomplish its mission and achieve its goals.

Front 18

SWOT Analysis

Back 18

A planning exercise in which managers identify strengths (S) and weaknesses (W) and environmental opportunities (O) and threats (T).

Front 19

The Five Forces Model

Back 19

* helps managers focus on the 5 most important competitive forces, or potential threats, in the external environment.

1) The level of rivalry among organizations in an industry

2) The potential for entry into the industry

3) The power of large suppliers

4) The power of large customers

5) The threat of substitute products

Front 20

Hypercompetition

Back 20

Permanent, ongoing, intense competition brought about in an industry by advancing technology or changing customer tastes.

Front 21

Four business level strategies

Back 21

1) Low-cost strategy: driving the organization's costs down below the costs of its rivals.

2) Differentiation strategy: Distinguishing an organization's products from the products of competitors on dimensions such as product design, quality, or after-sales service.

3) Focused low-cost strategy: Serving only one segment of the overall market and trying to be the lowest cost organization serving that segment.

4) Focused differentiation strategy: Serving only one segment of the overall market and trying to be the most differentiated organization serving that segment.

Front 22

Four corporate level strategies

Back 22

1) Concentration on a single industry - Reinvesting a company's profits to strengthen its competitive position in its current industry.

2) Vertical Integration - Expanding a company's operations either backward into an industry that produces inputs for its products or forward into an industry that uses, distributes, or sells its products.

3) Diversification - Expanding a company's business operations into a new industry in order to produce new kinds of valuable goods or services.

4) International expansion

Front 23

Related Diversification

Back 23

Entering a new business or industry to create a competitive advantage in one or more of an organization's existing divisions or businesses.

Front 24

Synergy

Back 24

Performance gains that result when individuals and departments coordinate their actions

Front 25

Unrelated Diversification

Back 25

Entering a new industry or buying a company in a new industry that is not related in any way to an organization's current businesses or industries.

Front 26

Global Strategy

Back 26

Selling the same standardized product and using the same basic marketing approach in each national market.

Front 27

Multidomestic Strategy

Back 27

Customizing products and marketing strategies to specific national conditions.

Front 28

Licensing

Back 28

Allowing a foreign organization to take charge of manufacturing and distributing a product in its country or world region in return for a negotiated fee.

Front 29

Franchising

Back 29

Selling to foreign organization the rights to use a brand name and operating know-how in return for a lump-sum payment and a share of the profits.

Front 30

Strategic Alliance

Back 30

An agreement in which managers pool or share their organization's resources and know-how with a foreign company, and the two organizations share the rewards and risks of starting a new venture.

Front 31

Joint Venture

Back 31

A strategic alliance among two or more companies that agree to jointly establish and share the ownership of a new business.

Front 32

Wholly Owned Foreign Subsidiary

Back 32

Production operations established in a foreign country independent of any local direct involvement.

Front 33

5 steps of strategy implementation:

Back 33

1) Allocating responsibility for implementation to the appropriate individuals or groups.

2) Drafting detailed action plans that specify how a strategy is to be implemented.

3) Establishing timetable for implementation that includes precise, measurable goals linked to the attainment of the action plan.

4) Allocating appropriate resources to the responsible individuals or groups.

5) Holding specific individuals or groups responsible for the attainment of corporate, divisional, and functional goals.