Chapter 6: Strategic Formulation: Situation Analysis And Business Strategy

Front 1

situation analysis

Back 1

the process of finding a strategic fit between external opportunities and internal strengths while working around external and internal weaknesses

Front 2

SWOT analysis

Back 2

strengths, weaknesses, opportunities, and threats that are strategic factors for a specific company.
-identify distinctive competencies and identification of opportunities

Front 3

propitious niche

Back 3

-Extremely favorable niche
-where an organization can use its core competencies to take advantage of a particular market opportunity and the niche is just enough for one firm to satisfy its demand

Front 4

niche

Back 4

a need in the marketplace that is currently unsatisfied

Front 5

sweet spot

Back 5

-a company is able to satisfy customers' needs in a way that rivals cannot
-area between customer's needs and company's capabilities

Front 6

strategic window

Back 6

-a unique market opportunity that is available for a particular time

Front 7

TOWS Matrix

Back 7

illustrates how the external opportunities and threats can be matched with internal strengths and weaknesses to result in 4 possible strategic alternatives
-provides a mean to brainstorm alternative strategies
-forces managers to create various kinds of growth and retrenchment strategies
-used to generate corporate as well as business strategies

Front 8

SO Strategies

Back 8

generate strategies here that use strengths to take advantage of opportunities

Front 9

WO strategies

Back 9

generate strategies here that take advantage of opportunities by overcoming weaknesses

Front 10

ST strategies

Back 10

generate strategies here that use strengths to avoid threats

Front 11

WT strategies

Back 11

generate strategies here that minimize weaknesses and avoid threats

Front 12

business strategy

Back 12

focuses on improving the competitive position of a company's or business unit's products or services within the specific industry or market segment it serves
-competitive strategy
-cooperative strategy

Front 13

lower cost strategy

Back 13

the ability of a company or business unit to design, produce and market a comparable product more efficiently than its competitors

Front 14

differentiation strategy

Back 14

the ability of a company or business unit to provide a unique or superior value to the buyer in terms of product quality, special features, or after sale service

Front 15

cost leadership

Back 15

a lower cost competitive strategy that aims at the broad mass market and requires efficient scale facilities, cost reductions, cost and overhead control

Front 16

differentiation

Back 16

involves the creation of a product or service that is perceived throughout the industry as unique.
-associated with design, brand image, technology, features, dealer network, or customer service

Front 17

cost focus

Back 17

a low cost competitive strategy that focuses on a particular buyer group or geographic market and attempts to serve only this niche to the exclusion of others
ex) house brand products

Front 18

differentiation focus

Back 18

concentrates on a particular buyer group, product line segment, or geographic market to serve the needs of a narrow strategic market more effectively than its competitors
-ex) local organic store

Front 19

timing tactics

Back 19

when a company implements a strategy

Front 20

first mover

Back 20

first company to manufacture and sell a new product or service
-ex)microsoft: windows operating system

Front 21

late movers

Back 21

may be able to imitate the technological advances of others, keep risks down by waiting until a new technological standard or market is established, and take advantage of the first mover's natural inclination to ignore market segments

Front 22

market tactics

Back 22

deals with where a company implements a strategy

Front 23

offensive tactics

Back 23

used to attack a competitors position

Front 24

frontal assault

Back 24

-head to head with competitor
-matches the competitor in every category from price to promotion distribution channel
-Kimberly-Clark

Front 25

flanking maneuver

Back 25

a firm may attack part of the market where the competitor is weak
ex)Texas instruments

Front 26

bypass attack

Back 26

company or business unit may choose to change the rules of the game

Front 27

encirclement

Back 27

occurs as an attacking company or unit encircles the competitor's position in terms of products or markets or both
ex)steinway

Front 28

guerrilla warfare

Back 28

use of small, intermittent assaults on different market segments held by the competitor.
ex)microbreweries

Front 29

defensive tactics

Back 29

aim to lower the probability of attack, divert attacks to less threatening avenues, lessen the intensity of an attack

Front 30

raise structural barriers

Back 30

entry barriers act to block a challenger's logical avenues of attack

Front 31

increase expected retaliation

Back 31

any action that increases the perceived threat of retaliation for an attack

Front 32

lower the inducement for attack

Back 32

reduce the expectations of future profits in the industry

Front 33

cooperative strategies

Back 33

used to gain a competitive advantage within an industry by working with other firms

Front 34

collusion

Back 34

the active cooperation of firms within an industry to reduce output and raise prices to avoid economic law of supply and demand

Front 35

strategic alliance

Back 35

a long term cooperative arrangement between two or more independent firms or business units that engage in business activities for mutual economic gain
1)obtain or learn new capabilities
2)obtain access to specific markets
3)reduce financial risk
4)reduce political risk

Front 36

mutual service consortia

Back 36

partnership of similar companies in similar industries that pool their resources to gain a benefit that is too expensive to develop alone, such as access to advanced technology
ex)IBM

Front 37

joint venture

Back 37

cooperative business activity, formed by two or more separate organizations for strategic purposes, that creates an independent business entity and allocates ownership, operational responsibilities, and financial risks and rewards each member, while preserving their separate identity/autonomy.

Front 38

licensing arrangement

Back 38

agreement in which the licensing firm grants rights to another firm in another country or market to produce and or sell a product

Front 39

value chain partnership

Back 39

strong and close alliance in which one company or unit forms a long term arrangement with a key supplier or distributor for mutual advantage