Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
34 Cards in this Set
- Front
- Back
|
Definition of Management |
Management is defined as the pursuit of organizational goals efficiently and effectively |
|
|
Rewards of being an exceptional manager |
Management is defined as the pursuit of organizational goals efficiently and effectively. You will understand how to relate to your supervisors You will understand how to interact with coworkers. You will understand how to manage yourself in the workplace You and your employees can experience a sense of accomplishment. You can stretch your abilities and magnify your range. You can build a catalog of successful products or services. You can become a mentor and help others. According to one survey, 84% of workers who had a mentor—an experienced person who provided guidance to someone new to the work world— |
|
|
4 functions of Management |
Management has four functions: planning,organizing, leading, and controlling. Planning is defined as setting goals and deciding how to achieve them. Organizing is defined as arranging tasks, people, and other resources to accomplish the work. Leading is defined as motivating, directing,and otherwise influencing people to work hard to achieve the organization's goals. Controlling is defined as monitoring performance, comparing it with goals, and taking corrective action as needed. |
|
|
Challenges of being a manager |
Seven challenges face any manager: You need to manage for competitive advantage—to stay ahead of rivals. You need to manage for diversity in race,ethnicity, gender, and so on, because the future won't resemble the past. You need to manage for the effects of globalization and of information technology. You always need to manage to maintain ethical standards. You need to manage for sustainability—to practice sound environmental policies. Finally, you need to manage for the achievement of your own happiness and life goals. Competitive advantage is the ability of an organization to produce goods or services more effectively than competitors do, thereby outperforming them.Sustainability is defined as economic development that meets the needs of the present without compromising the ability of future generations to meet their own needs. |
|
|
Levels of Management |
Four levels of managers: top,middle, and first-line managers and also team leaders. Top managers make long-term decisions about the overall direction of the organization and establish the objectives, policies, and strategies for it. Middle managers implement the policies and plans of the top managers above them and supervise and coordinate the activities of the first-line managers below them. Team leader, a manager who is responsible for facilitating team activities toward achieving key results. |
|
|
What are the skills that managers need? |
Three principal skills. The first is technical, the ability to perform a specific job. The second is conceptual, the ability to think analytically. The third is human, the ability to interact well with people. Technical skills consist of the job-specific knowledge needed to perform well in a specialized field. Conceptual skills consist of the ability to think analytically, to visualize an organization as a whole and understand how the parts work together. Human skills consist of the ability to work well in cooperation with other people to get things done—especially with people in teams, an important part of today's organizations |
|
|
What are entrepreneurs/intrapreneurs? |
Entrepreneurship, a necessary attribute of business, means taking risks to create a new enterprise.It is expressed through two kinds of innovators, the entrepreneur and the intrapreneur. An entrepreneur is someone who sees a new opportunity for a product or service and launches a business to try to realize it. Most entrepreneurs run small businesses with fewer than 100 employees.An intrapreneur is someone who works inside an existing organization who sees an opportunity for a product or service and mobilizes the organization's resources to try to realize it. |
|
|
Understand the history of managementtheory—different perspectives |
This chapter describes two principal theoretical perspectives—the historical and the contemporary. The historical perspective (1911–1950s)includes three viewpoints—classical, behavioral, and quantitative.The contemporary perspective (1960s–present) also includes three viewpoints—systems,contingency, and quality-management. |
|
|
Understand impact of general and task environment |
task environment consists of 11 groups that present you with daily tasks to handle: customers, competitors, suppliers, distributors, strategic allies, employee organizations, local communities, financial institutions, government regulators, special-interest groups, and mass media. |
|
|
Know internal and external stakeholders |
Managers operate in two organizational environments—internal and external—both made up of stakeholders, the people whose interests are affected by the organization. The first, or internal,environment consists of employees, owners, and the board of directors.internal stakeholders consist of employees, owners, and the board of directors, if any. Stakeholders—the people whose interests are affected by an organization's activities.external stakeholders—people or groups in the organization's external environment that are affected by it. |
|
|
Know definition of ethics and four approaches to deciding ethical dilemmas |
Ethics are the standards of right and wrong that influence behavior. These standards may vary among countries and among cultures. Ethical behavior is behavior that is accepted as “right” as opposed to “wrong” according to those standards. Utilitarian approach is guided by what will result in the greatest good for the greatest number of people. Individual approach is guided by what will result in the individual's best long-term interests,which ultimately are in everyone's self-interest. Ethical behavior in the moral-rights approach is guided by respect for the fundamental rights of human beings, such as those expressed in the U.S. Constitution's Bill of Rights. The Justice Approach: Respecting Impartial Standards of Fairness Ethical behavior in the justice approach is guided by respect for impartial standards of fairness and equity. |
|
|
Understand Corporate Social Responsibility (CRM) and triple bottom line |
Social responsibility is a manager's duty to take actions that will benefit the interests of society as well as of the organization. When generalized beyond the individual to the organization, social responsibility is called corporate social responsibility (CSR), the notion that corporations are expected to go above and beyond following the law and making a profit. The triple bottom line—representing People, Planet, and Profit (the 3 Ps)—measures an organization's social,environmental, and financial performance. |
|
|
Definition of globalization,Multinational Corporation, multinational organization |
Globalization, the trend of the world economy toward becoming a more interdependent system, is reflected in three developments: the rise of the “global village” and e-commerce, the trend of the world's becoming one big market, and the rise of both mega firms and Internet-enabled mini firms worldwide. A multinational corporation, or multinational enterprise, is a business firm with operations in several countries. A multinational organization is a nonprofit organization with operations in several countries. |
|
|
Know what culture is and how it impacts managers |
A nation's culture is the shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people. Culture shock—the feelings of discomfort and disorientation associated with being in a nun familiar culture. A person from North America, Great Britain, Scandinavia, Germany, or Switzerland, for example, comes from a low-context culture in which shared meanings are primarily derived from written and spoken words. Someone from China, Korea, Japan, Vietnam, Mexico, or many Arab cultures, on the other hand, comes from a high-context culture in which people rely heavily on situational cues for meaning when communicating with others, relying on nonverbal cues as to another person's official position, status, or family connections.§ Power distance—how much unequal distribution of power should there be in organizations and society? Power distance expresses the degree to which a society's members expect power to be unequally shared.§ Uncertainty avoidance—how much should people rely on social norms and rules to avoid uncertainty? Uncertainty avoidance expresses the extent to which a society relies on social norms and procedures to alleviate the unpredictability of future events.§ Institutional collectivism—how much should leaders encourage and reward loyalty to the social unit? Institutional collectivism expresses the extent to which individuals are encouraged and rewarded for loyalty to the group as opposed to pursuing individual goals.§ In-group collectivism—how much pride and loyalty should people have for their family or organization? In contrast to individualism, in-group collectivism expresses the extent to which people should take pride in being members of their family, circle of close friends, and their work organization. Gender egalitarianism—how much should society maximize gender role differences? Gender egalitarianism expresses the extent to which a society should minimize gender discrimination and role inequalities.§ Assertiveness—how confrontational and dominant should individuals be in social relationships? Assertiveness represents the extent to which a society expects people to be confrontational and competitive as opposed to tender and modest.§ Future orientation—how much should people delay gratification by planning and saving for the future? Future orientation expresses the extent to which a society encourages investment in the future,as by planning and saving.§ Performance orientation—how much should individuals be rewarded for improvement and excellence? Performance orientation expresses the extent to which society encourages and rewards its members for performance improvement and excellence.§ Humane orientation—how much should society encourage and reward people for being kind, fair, friendly, and generous? Humane orientation represents the degree to which individuals are encouraged to be altruistic,caring, kind, generous, and fair. |
|
|
What does it take to be a successful international manager? |
Successful international managers aren't ethnocentric or polycentric but geocentric. Ethnocentric managers believe that their native country, culture, language, and behavior are superior to all others. Ethnocentrism might also be called parochialism—that is, a narrow view in which people see things solely through their own perspective. Polycentric managers take the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them alone. Geocentric managers accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective. |
|
|
Know why and how organizations expand international |
Multinationals expand to take advantage of availability of supplies, new markets, lower labor costs, access to finance capital, or avoidance of tariffs and import quotas. Five ways they do so are by global outsourcing; importing, exporting, and countertrading; licensing an franchising; joint ventures; and wholly-owned subsidiaries. Availability of Supplies Antique and art dealers, mining companies, banana growers, sellers of hard woods—all have to go where their basic supplies or raw materials are located. 2. New Markets Sometimes a company will find, as cigarette makers have, that the demand for their product has declined domestically but that they can still make money overseas. 3. Lower Labor Costs The decline in manufacturing jobs in the United States is directly attributable to the fact that American companies have found it cheaper to do their manufacturing outside the States. For example, the rationale for using maquiladoras—manufacturing plants allowed to operate in Mexico with special privileges in return for employing Mexican citizens 4. Access to Finance Capital Companies may be enticed into going abroad by the prospects of capital being put up by foreign companies or sudsidies from foreign governments. 5. Avoidance of Tariffs & Import Quotas Countries place tariffs(fees) on imported goods or impose import quotas—limitations on the numbers of products allowed in—for the purpose of protecting their own domestic industries. 1. Global Outsourcing A common practice of many companies, outsourcing is defined as using suppliers outside the company to provide goods and services 2. Importing, Exporting, &Countertrading When importing, acompany buys goods outside the country and resells them domestically. 3. Licensing & Franchising are two aspects of the same thing, although licensing is used by manufacturing companies and franchising is used more frequently by service companies.In licensing, a company allows a foreign company to pay it a fee to make or distribute the first company's product or service.Franchising is a form of licensing in which a company allows a foreign company to pay it a fee and a share of the profit in return for using the first company's brand name and a package of materials and services. 4. Joint Ventures Strategic allies (described in Chapter 3) are two organizations that have joined forces to realize strategic advantages that neither would have if operating alone. A U.S. firm may form a joint venture, also known as a strategic alliance, with a foreign company to share the risks and rewards of starting a new enterprise together in a foreign country. 5. Wholly-Owned Subsidiaries A wholly-owned subsidiary is a foreign subsidiary that is totally owned and controlled by an organization. The foreign subsidiary may be an existing company that is purchased outright. A greenfield venture is a foreign subsidiary that the owning organization has built from scratch. |
|
|
Understand free trade, trade agreements and trading blocs |
Barriers to free trade are tariffs, import quotas, and embargoes. Organizations promoting international trade are the World Trade Organization, the World Bank, and the International Monetary Fund. Major trading blocs are NAFTA, the EU, APEC, ASEAN, Mercosur, and CAFTA. 1. A tariff is a trade barrier in the form of a customs duty, or tax,levied mainly on imports.At one time, for instance, to protect the American shoe industry, the United States imposed a tariff on Italian shoes. Actually, there are two types of tariffs: One, calleda revenue tariff, is designed simply to raise money for the government, such as a tax on all oil imported into the UnitedStates. 2. An import quota is a trade barrier in the form of a limit on the numbers of a product that can be imported. Its intent is to protect domestic industry by restricting the availability of foreign products. dumping, the practice of a foreign company's exporting products abroad at a lower price than the price in the home market—or even below the costs of production—in order to drive down the price of the domestic product. 3. Embargoes Ever seen a realCuban cigar? They're difficult for Americans to get, since they're embargoed. An embargo is a complete ban on the import or export of certain products. What is planning and what does it entail? The first of four functions in the management process is planning, which involves setting goals and deciding how to achieve them and which is linked to strategy. We define planning, strategy, and strategic management. We then describe three reasons why strategic management and strategic planning are important and how they may work for both large and small firms.Planning: Coping with Uncertainty As we've said (Chapter 1), planning is defined assetting goals and deciding how to achieve them. Another definition: planning iscoping with uncertainty by formulating future courses of action to achievespecified results. Strategy: Large-Scale Action Plan A strategy is a large-scaleaction plan that sets the direction for an organization. It represents an “educated guess”about what must be done in the long term for the survival or the prosperity ofthe organization or its principal parts. We hear the word expressed in termslike “Budweiser's ultimate strategy…” or “Visa's overseas strategy…” or financial strategy, marketing strategy,and human resource strategy.Strategic Management: Involving All Managersin Strategy In the late 1940s, most large U.S. companies wereorganized around a single idea or product line. By the 1970s, Fortune 500companies were operating in more than one industry and had expanded overseas.It became apparent that to stay focused and efficient, companies had to begintaking a strategic-management approach. |
|
|
Three types of planning for levels of management |
What is planning and what does it entail? The first of four functions in the management process is planning, which involves setting goals and deciding how to achieve them and which is linked to strategy. We define planning, strategy, and strategic management. We then describe three reasons why strategic management and strategic planning are important and how they may work for both large and small firms. Planning: Coping with Uncertainty As we've said (Chapter 1), planning is defined as setting goals and deciding how to achieve them. Another definition: planning is coping with uncertainty by formulating future courses of action to achieve specified results. Strategy: Large-Scale Action Plan A strategy is a large-scale action plan that sets the direction for an organization. It represents an “educated guess”about what must be done in the long term for the survival or the prosperity of the organization or its principal parts. We hear the word expressed in terms like “Budweiser's ultimate strategy…” or “Visa's overseas strategy…” or financial strategy, marketing strategy,and human resource strategy. Strategic Management: Involving All Managers in Strategy In the late 1940s, most large U.S. companies were organized around a single idea or product line. By the 1970s, Fortune 500 companies were operating in more than one industry and had expanded overseas.It became apparent that to stay focused and efficient, companies had to begin taking a strategic-management approach. Strategic planning by top management. Using their mission and vision statements, top managers do strategic planning—they determine what the organization's long-term goals should be for the next 1–5 years with the resources they expect to have available. Tactical planning by middle management. The strategic priorities and policies are then passed down to middle managers, who must do tactical planning—that is, they determine what contributions their departments or similar work units can make with their given resources during the next 6–24 months.Operational planning by first-line management. Middle managers then pass these plans along to first-line managers to do operational planning—that is, they determine how to accomplish specific tasks with available resources within the next 1–52 weeks. |
|
|
Types of goals and what are SMARTgoals? |
Three Types of Goals: Strategic, Tactical,& Operational. A goal, also known as an objective, is a specific commitment to achieve a measurable result within a stated period of time. As with planning, goals are of the same three types—strategic,tactical, and operational. Also, like planning, goals are arranged in a hierarchy known as a means-end chain because in the chain of management (operational, tactical, strategic) the accomplishment of low-level goals is the means leading to the accomplishment of high-level goals or ends.§ Strategic goals are set by and for top management and focus on objectives for the organization as a whole.§ Tactical goals are set by and for middle managers and focus on the actions needed to achieve strategic goals.§ Operational goals are set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals.§ Types of Plans: Standing Plans & Single-Use PlansStanding Plans: Policies, Procedures, &Rules Standing plans are plans developed for activities that occur repeatedly over a period of time. Standing plans consist of policies, procedures, and rules.§ A policy is a standing plan that outlines the general response to a designated problem or situation. Example: “This workplace does not condone swearing.” This policy is a broad statement that gives managers a general idea about what is allowable for employees who use bad language, but gives no specifics.§ A procedure (or standard operating procedure) is a standing plan that outlines the response to particular problems or circumstances. Example:McDonald's specifies exactly how a hamburger should be dressed, including the order in which the mustard, ketchup, and pickles are applied.§ A rule is a standing plan that designates specific required action. Example: “No smoking is allowed anywhere in the building.” This allows no room for interpretation. Single-Use Plans: Programs & Projects Single-use plans are plans developed for activities that are not likely to be repeated in the future. Such plans can be programs or projects.§ A program is a single-use plan encompassing a range of projects or activities. Example: The U.S. government space program has had several projects,including the Challenger project, the Hubble Telescope project, and the space shuttle project.§ A project is a single-use plan of less scope and complexity than a program. Example: The space shuttle project, one of several projects in thegovernment's space program, consisted of three shuttles:Discovery,Endeavour, and Atlantis. ●§ This section discusses SMART goals—goals that are Specific, Measurable, Attainable, Results-oriented, and have Target dates.It also discusses a technique for setting goals, management by objectives(MBO), a four-step process for motivating employees.Specific Goals should be stated in specific rather than vague terms. The goal “As many planes as possible should arrive on time”is too general. The goal that “Ninety percent of planes should arrive within 15minutes of the scheduled arrival time” is specific. Measurable Whenever possible, goals should be measurable, or quantifiable (as in “90% of planes should arrive within 15 minutes…”). That is,there should be some way to measure the degree to which a goal has been reached. Of course, some goals—such as those concerned with improving quality—are not precisely quantifiable. In that case, something on the order of “Improve the quality of customer relations by instituting 10 follow-up telephone calls every week” will do. You can certainly quantify how many follow-up phone calls were made. Attainable Goals should be challenging, of course, but above all they should be realistic and attainable.It may be best to set goals that are quite ambitious so as to challenge people to meet high standards.Always, however, the goals should be achievable within the scope of the time,equipment, and financial support available. Results-Oriented Only a few goals should be chosen—say, five for anywork unit. And they should be results-oriented—they should support the organization's vision.In writing out the goals, start with the word “To” and follow it with action-oriented verbs—“complete,” “acquire,” “increase” (“to decrease by 10% the time to get passengers settled in their seats before departure”).Some verbs should not be used in your goal statement because they imply activities—the tactics used to accomplish goals (such a shaving baggage handlers waiting). For example, you should not use “to develop,”“to conduct,” “to implement.” Target Dates Goals should specify the target dates or deadline dates when they are to be attained. For example, it's unrealistic to expect an airline to improve its on-time arrivals by 10% overnight. However,you could set a target date—3 to 6 months away, say—by which this goal is to be achieved. That allows enough time for lower-level managers and employees to revamp their systems and work habits and gives them a clear time frame in which they know what they are expected to do. |
|
|
Understand Management by Objective and the Planning/Controlling Cycle |
Management by objectives (MBO) is a four-step process in which (1) managers and employees jointly set objectives for the employee, (2) managers develop action plans,(3) managers and employees periodically review the employee's performance, and (4) the manager makes a performance appraisal and rewards the employee according to results. The purpose of MBO is to motivate rather than to control subordinates.The planning/control cycle has two planning steps (1 and 2) and two control steps (3 and 4), as follows: (1)Make the plan. (2) Carry out the plan. (3) Control the direction by comparing results with the plan. (4) Control the direction by taking corrective action in two ways—namely (a) by correcting deviations in the plan being carried out or(b) by improving future plans. |
|
|
Strategic Management, types of strategies and the reasons why organizations develop a strategy |
Strategic Positioning & Its PrinciplesAccording to Porter, strategic positioning attemptsto achieve sustainable competitive advantage by preserving what is distinctiveabout a company. “It means,” he says, “performing different activitiesfrom rivals, or performing similar activities in differentways.” Three key principles underlie strategic positioning:10 1. Strategy Is the Creation of a Unique & Valuable Position Strategic position emerges from three sources:§ Few needs, many customers. Strategic position can be derived from serving the few needs of many customers. Example: Jiffy Lube provides only lubricants, but it provides them to all kinds of people with all kinds of motor vehicles.§ Broad needs, few customers. A strategic position may be based onserving the broad needs of just a few customers. Example: Wealth management andinvestment advisory firm Bessemer Trust focuses exclusively on high–net worthclients.§ Broad needs, many customers. Strategy may be oriented toward servingthe broad needs of many customers. Example: National movie theater operatorCarmike Cinemas operates only in cities with populations of fewer than 200,000people. 2. Strategy Requires Trade-offs in Competing As a glance at the preceding choicesshows, some strategies are incompatible. Thus, a company has to choose not onlywhat strategy to follow but what strategy not to follow.Example: Neutrogena soap, points out Porter, is positioned more as a medicinalproduct than as a cleansing agent. In achieving this narrow positioning, thecompany gives up sales based on deodorizing, gives up large volume, andaccordingly gives up some manufacturing efficiencies. 3. Strategy Involves Creating a “Fit” among Activities “Fit” has to do with the ways acompany's activities interact and reinforce one another. Example: A mutual fundsuch as Vanguard Group follows a low-cost strategy and aligns all its activitiesaccordingly, distributing funds directly to consumers and minimizing portfolioturnover. However, when the short-lived (1993–1995) Continental Lite airlinetried to match some but not all of Southwest Airlines' activities, it was notsuccessful because it didn't apply Southwest's entire interlocking system. |
|
|
Five steps in the Strategic Management Process |
Step 1: Establish the Mission & the Vision Step 2: Assess the Current Reality Step 3: Formulate the Grand Strategy Step 4: Implement the Strategy Step 5: Maintain Strategic Control: The Feedback Loop Strategic |
|
|
Porter’s five competitive forces |
in the firm's environment: (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. |
|
|
Porter’s four competitive strategies |
Porter's Four Competitive Strategies (also called four generic strategies) are (1) cost-leadership, (2) differentiation, (3)cost-focus, (4) focused-differentiation. The first two strategies focus on wide markets, the last two on narrow markets.Time Warner, which produces lots of media and publications,serves wide markets around the world. Your neighborhood video store serves a narrow market of just local customers. |
|
|
Cost-leadership |
Cost-Leadership Strategy: Keeping Costs & Prices Low for a Wide Market The cost-leadership strategy is to keep the costs, and hence prices, of a product or service below those of competitors and to target a wide market.This puts the pressure on R&D managers to develop products or services that can be created cheaply, production managers to reduce production costs, and marketing managers to reach a wide variety of customers as inexpensively as possible.Firms implementing the cost-leadership strategy include Timex, computer maker Acer, hardware retailer Home Depot, and pen maker Bic. |
|
|
Differentiation strategy |
Differentiation Strategy: Offering Unique & SuperiorValue for a Wide Market The differentiation strategy is to offer products or services that are of unique and superior value compared with those of competitors but to target a wide market.Because products are expensive, managers may have to spend more on R&D, marketing, and customer service. This is the strategy followed by Ritz-Carlton hotels and the makers of Lexus automobiles.The strategy is also pursued by companies trying to create brands to differentiate themselves from competitors.Although Coca-Cola may cost only cents more than a supermarket's own house brand of cola, Coke spends millions on ads. |
|
|
Cost focus strategy |
Keeping Costs & Prices Low for a Narrow Market The cost-focus strategy is to keep the costs, and hence prices, of a product or service below those of competitors and to target a narrow market.This is a strategy you often see executed with low-end products sold in discount stores, such as low-cost beer or cigarettes, or with regional gas stations, such as the Terrible Herbst, Rotten Robbie, and Maverik chains in parts of the West.Needless to say, the pressure on managers to keep costs down is even more intense than it is with those in cost-leadership companies. |
|
|
Focused-differentiation strategy |
Offering Unique & Superior Value for a Narrow Market The focused-differentiation strategy is to offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market.Some luxury cars are so expensive—Rolls-Royce, Ferrari,Lamborghini—that only a few car buyers can afford them. Other companies following the strategy are jeweler Cartier and shirtmaker Turnbull & Asser.Yet focused-differentiation products need not be expensive. The publisher Chelsea Green has found success with niche books, such as The StrawBale House. |
|
|
Threats of new entrants |
New competitors can affect an industry almost overnight, taking away customers from existing organizations. Example:Kraft Macaroni & Cheese is a venerable, well-known brand but is threatened from the low end by store brands, such as Walmart's brand, and from the high end by Annie's Organic & Natural Mac and Cheese. |
|
|
Bargaining power of suppliers |
Some companies are readily able to switch suppliers in order to get components or services, but others are not.Example: Clark Foam of Laguna Niguel, California, supplied nearly 90% of the foam cores used domestically to make custom surfboards. When it suddenly closedshop in late 2005, blaming government agencies for trying to shut it down, many independent board shapers and small retailers found they couldn't afford to get foam from outside the country. On the other hand, Surftech in Santa Cruz,California, was one of the few board manufacturers to use resin instead of foam, and so it saw a spike in sales. |
|
|
Bargaining power of buyers |
Customers who buy a lot of products or services from an organization have more bargaining power than those who don't.Customers who use the Internet to shop around are also better able to negotiate a better price. Example: Buying a car used to be pretty much a local activity,but now potential car buyers can use the Internet to scout a range of offeringswithin a 100-mile or larger radius, giving them the power to force down theasking price of any one particular seller. |
|
|
Threats of substitute product or services |
Again, particularly because of the Internet, an organization is in a better position to switch to other products or services when circumstances threaten their usual channels. Example: Oil companies worried when Brazil achieved energy self-sufficiency in 2006, able to meet its growing demand for vehicle fuel by substituting ethanol derived from sugar cane for petroleum—until 2007, when population and economic growth forced the country to start importing oil again.5. Rivalry among Competitors The preceding four forces influence the fifth force, rivalry among competitors. Think of the wild competition among makers and sellers of portable electronics, ranging from smartphones to tablets to video game systems. Once again, the Internet has intensified rivalries among all kinds of organizations.An organization should do a good SWOT analysis that examines these five competitive forces, Porter felt. |
|
|
Rivalry among competitors |
The preceding four forces influence the fifth force, rivalry among competitors. Think of the wild competition among makers and sellers of portable electronics, ranging from smartphones to tablets to video game systems. Once again, the Internet has intensified rivalries among all kinds of organizations.An organization should do a good SWOT analysis that examines these five competitive forces, Porter felt. |
|
|
Strategic management process |
1. Establish the mission and the vision 2. Assess the current reality 3. Formulate the grand strategy 4. Implement the strategy 5. Maintain strategic control |
