Management Exam Ii Ch. 6

Front 1

Business plan
pg. 164

Back 1

a document that outlines a proposed firms goals, the strategy for achieving them, and the standards for measuring success

Front 2

Strategy
pg. 165

Back 2

a large scale action plan that sets the direction for an organization.
-represents an "educated guess" about what must be done in the long term for survival

Front 3

Strategic management
pg. 165

Back 3

a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals.
-doesnt mean that top managers dictate ideas, middle managers are the ones who will be asked to understand and implement the strategies.

Front 4

an organization should adopt strategic management and strategic planning for what 3 reasons?

Back 4

1.) provide direction and momentum
2.) encourage new ideas, and above all
3.) develop a sustainable competitive advantage

Front 5

sustainable competitive advantage occurs when an organization is able to get and stay ahead in what four areas?

Back 5

1.) being responsive to customers
2.) innovating
3.) quality
4.) effectiveness

Front 6

Strategic positioning
pg. 168

Back 6

attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company.
-it means performing different activities from rivals or performing similar activities in different ways

Front 7

3 key principles underlining strategic positioning

Back 7

1.) few needs, many customers
2.) broad needs, few customers
3.) broad needs, many customers

Front 8

Grand strategy
pg. 171

Back 8

after an assessment of current organizational performance, then explains how the organizations mission is to be accomplished.

Front 9

3 common grand strategies

Back 9

1.) growth strategy
2.) stability strategy
3.) defensive strategy

Front 10

Growth strategy
pg. 172

Back 10

a grand strategy that involves expansion--as in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served.
example: PepsiCo, which makes Lay's potato chips, and is experimenting in making a new "designer salt"

Front 11

Stability strategy
pg. 172

Back 11

a grand strategy that involves little or no significant change.
Example: Best buy

Front 12

Defensive strategy
pg. 172

Back 12

or a "retrenchment strategy" is a grand strategy that involves reduction in the organizations efforts.
example: in 2009 recession caused a falloff in bookings for pleasure travel, cruise ship operator Carnival corp. dramatically slashed prices resulting in only a 10% drop in revenues.

Front 13

Strategy formulation
pg. 173

Back 13

the process of choosing among different strategies and altering them to best fit the organizations needs.
-Porters competitive forces and strategies is a technique used to formulate strategy

Front 14

Strategy implementation
pg. 173

Back 14

putting strategic plans into effect

Front 15

Strategic control
pg. 173

Back 15

consists of monitoring the execution of strategy and making adjustments, if necessary.

Front 16

to keep a strategic plan on track you need to do what?

Back 16

-engage people
-keep it simple
-stay focused
-keep moving

Front 17

Competitive intelligence
pg. 174

Back 17

gaining information about ones competitors activities so that you can anticipate their moves and react appropriately.
-public prints, and advertising
-investor information
-informal sources

Front 18

Environmental scanning
pg. 174

Back 18

careful monitoring of an organizations internal and external environments to detect early signs of opportunities and threats that may influence the firms plans.

Front 19

SWOT analysis
pg. 174

Back 19

also known as a "situational analysis" which is a search for the strengths, weaknesses, opportunities, and threats affecting the organization.
-provides you with a realistic understanding of your organization in relation to its internal and external environments so you can better formulate strategy

Front 20

Organizational strengths
pg. 175

Back 20

the skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission.

Front 21

Organizational weaknesses
pg. 176

Back 21

the drawbacks that hinder an organization in executing strategies in pursuit of its mission.

Front 22

Organizational opportunities
pg. 176

Back 22

environmental factors that the organization may exploit for competitive advantage.

Front 23

Organizational threats
pg. 176

Back 23

environmental factors that hinder an organizations achieving a competitive advantage

Front 24

Forecast
pg. 177

Back 24

a vision or projection of the future.

Front 25

two types of forecast

Back 25

1.) trend analysis
2.) contingency planning

Front 26

trend analysis
pg. 177

Back 26

a hypothetical extension of a past series of events into the future.

Front 27

Contingency planning
pg. 177

Back 27

also known as "scenario planning and scenario analysis"--the creation of alternative hypothetical but equally likely future conditions.

Front 28

Porters 5 competitive forces
pg. 179

Back 28

1.) threats of new entrants
2.) bargaining power of suppliers
3.) bargaining power of buyers
4.) threats of substitute products or services
5.) rivalry among competitors

Front 29

Porters model for industry analysis
pg. 179

Back 29

suggested that business level strategies originate in the 5 primary competitive forces in the firms environment.

Front 30

Porters 4 competitive strategies
pg. 180

Back 30

1.) cost-leadership
2.) differentiation
3.) Cost-focus
4.) focused- differentiation
-first 2 focus on wide markets
-second 2 focus on narrow markets.

Front 31

Cost leadership strategy
pg. 180

Back 31

is to keep the costs, and hence prices, of a product or service below those of competitors and to target a wide market.
example: Dell, Timex, Home depot, and Bic

Front 32

Differentiation strategy
pg. 181

Back 32

is to offer products or services that are of unique and superior value compared with those of competitors but to target a wide market.
example: Ritz-Carlton hotels, and Lexus automobiles.

Front 33

Cost-focus strategy
pg. 181

Back 33

is to keep the costs, and hence prices, of a product or service below those of competitors and to target a narrow market.
example: often see executed with low end products sold in discount stores, such as low cost beer or cigarettes. (gas stations such as Terrible Herbst or Rotten Robbie chains)

Front 34

Focused differentiation strategy
pg. 181

Back 34

is to offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market.
example: Rolls royce, Ferrari, Lamborghini.

Front 35

Single-product strategy
pg. 181

Back 35

a company makes and sells only one product within its market.
example: flower shops, security systems.

Front 36

Diversification
pg. 182

Back 36

operating several businesses in order to spread the risk
-risk of a single product strategy
-small retailer level

Front 37

Unrelated diversification
pg. 182

Back 37

operating several businesses under one ownership that are not related to one another.
example: General electric, started with lighting then expanded to making plastics and broadcasting

Front 38

Related diversification
pg. 182

Back 38

an organization under one ownership operates separate businesses that are related to one another.
example: Burberry british raincoat maker. Started with marketing outwear clothing but since then has expanded into related business lines, including accessories such as umbrellas, childrens clothing, and fragrances.

Front 39

Synergy
pg. 183

Back 39

The economic value of separate, related businesses under one ownership and management is greater together than the businesses are worth separately.

Front 40

BCG matrix
pg. 183

Back 40

a means of evaluating strategic business unites on the basis of (1) their business growth rates and (2) their share of the market.
-suggest that an organization will do better in fast growing markets in which it has a high market share rather than in slow growing markets.

Front 41

Execution
pg. 184

Back 41

not simply tactics, it is a central part of any companys strategy.
It consists of using questioning, analysis, and follow through to mesh strategy with reality, align people with goals and achieve results promised.