Essay about Business Strategy

600 Words 3 Pages
I. What is Strategy? A. Strategy – is its theory of how to achieve high levels of performance in the markets and industries within which it is operating. 1. Evaluating and choosing a strategy require an understanding of both the economic logic from which a strategy is derived and an understanding of the organizational logic through which a strategy is implemented. II. The Strategic Management Process A. The Strategic Management Process – is a sequential set of analyses and choices that can increase the likelihood that a firm will choose a strategy that enables it to perform well. B. A Firm’s Mission 1. The SMP begins when a firm defines its mission. 2. Mission – its long-term purpose. Defines what a firm …show more content…
External Analysis – a firm identifies the critical threats and opportunities in its competitive environment. i. It also examines how competition in this environment is likely to evolve and what implications that evolution has for the threats and opportunities a firm is facing. 2. Internal Analysis – helps a firm to identify its organizational strengths and weaknesses. i. Helps a firm to understand which of its resources and capabilities are likely to be sources of advantage and which of them are less likely to be sources of such advantages. ii. Helps identify those areas of its organization that require improvement and change. 3. SWOT – strengths, weaknesses, opportunities, and threats – focuses attention on both the external attributes of a firm’s environment and on the internal attributes of a firm. i. Firms should choose strategies that exploit opportunities and neutralize threats through the use of strengths while avoiding or fixing weaknesses. E. Strategic Choice 1. Business Level Strategies – Are actions firms take to gain advantages in a single market or industry. i. Cost leadership ii. Product differentiation iii. Flexibility iv. Tacit collusion 2. Corporate Level Strategies – Are actions firms take to gain advantage by operating multiple markets or industries simultaneously. i. Vertical integration strategies ii. Diversification iii. Strategic alliances iv. Merger and

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