BUS 485.10 Strategic Management Test One
Key success factors (KSFs)
the strategy elements, product attributes, resource strengths, competitive capabilities, and market achievements with the greatest impact on future competitive success in the marketplace
the threat of substitute products/services
the threat of limiting the potential returns of an industry by placing a ceiling on the prices that firms in that industry can profitably charge without losing too many customers to substitute products
the competitive advantage test
"Can the strategy help the company achieve a sustainable competitive advantage?" a winning advantage is durable and long-lasting
scope of the firm
the range of activities which the firm performs internally, the breadth of its product and service offerings, the extent of its geographic market presence, and its mix of businesses
horizontal scope
the range of product and service segments that a firm serves within its focal market
Operating Strategies concern
the relatively narrow strategic initiatives and approaches for managing key operating units (plants, distribution centers, geographic units) and specific operating activities (quality control, advertising, brand-building efforts, supply chain-related activities, and website sales and operations
strategic vision
the route a firm intends to take in developing and strengthening its business; provides panoramic view of "where are we going" and why this direction makes sense considers how overall performance could be improved by changing: -the products it offers -the markets it participates in -the customers it serves -the businesses in engages with
A company's strategy is defined by
the specific market positioning, competitive moves, and business approaches that form management's answer to " What's our plan for running the company and producing good results?"
competitive strategy
the specifics of management's game plan for competing successfully; includes approaches to please customers, offensive/defensive moves to counter rival's actions, responses to shifting market conditions, and initiatives to strengthen the firm's market position and achieve a competitive advantage
2 things that define good management
1. good strategy 2. good strategy execution
the hows that define a firm's strategy
1. how to attract and please customers 2. how to compete against rivals 3. how to position the company in the marketplace 4. how best to respond to changing economic and market conditions 5. how to capitalize on attractive opportunities to grow the business 6. how to achieve the company's performance targets
5 competitive strategies
1. low-cost provider 2. broad differentiation 3. focused low-cost 4. focused differentiation 5. best-cost provider
2 major avenues for achieving a cost advantage
1. perform value chain activities more cost-effectively than rivals 2. revamp the firm's overall value chain to eliminate some cost-producing activities
strategic approaches to building a sustainable competitive advantage
1. striving to be the industry's low-cost provider, thereby aiming for cost-based competitive advantage over rivals; ex: Walmart 2. outcompeting rivals on the basis of differentiating features, such as higher quality, wider product selection, added performance, value-added services, more attractive styling, and technological superiority; ex: Apple 3. developing an advantage based on offering more value for the money; aka "best-cost provider strategy"; blends 2 previous approaches; ex: Target 4. focusing on a narrow market niche within an industry; ex: eBay 5. developing resource strengths and competitive capabilities that rivals can't easily overcome with their own capabilities
a winning strategy must pass 3 tests
1. the fit test 2. the competitive advantage test 3. the performance test
Why analyze the external environment of the firm?
1. the impact of the general environment on a firm's strategies and performance 2. the importance of developing forecasts of the business environment 3. Porter's Five Forces
2 facets of a company's situation
1. the industry and competitive environment in which the firm operates and the forces acting to reshape this environment 2. the firm's own market position and competitiveness (resources/capabilities, strengthens/weaknesses, windows of opportunity)
Porter's Five Forces (of industry competition)
1. threat of new entrants 2. bargaining power of buyers 3. bargaining power of suppliers 4. threat of substitute products/services 5. rivalry among existing firms
2 biggest factors that distinguish competitive strategy
1. whether a company's target market is broad or narrow 2. whether the company is pursuing a competitive advantage linked to lower costs or differentiation
Which one of the following conditions acts intensify the competitive pressures associated with the threat of entry?
A general belief on the part of entry candidates that industry members are unwilling or unable to strongly contest the efforts of newcomers to gain a market foothold
Which one of the following generally does not act to weaken the rivalry among competing sellers?
A situation where one or two rivals have powerful strategies and other rivals are scrambling to stay in the game
In Table 4.2, which one of the following is not an example of a potential market opportunity that a company may have?
A situation where several of the company's weakest competitors are acquired by one of the company's strong competitors, this making it easier to steal away customers of the weak competitors
Functional Area Strategies
Add relevant detail to the hows of overall business strategy provide a game plan for managing a particular activity in ways that support the overall business strategy
the fit test
"How well does the strategy fit the company's situation?" external fit: how it fits to the business environment and market conditions/opportunities internal fit: how it fits to the company's resources and competitive capabilities dynamic fit: how it evolves over time while maintaining close and effective alignment with company's situation even as external/internal conditions change
the performance test
"Is the strategy producing good company performance?" types of performance indicators: 1. competitive strength and market standing 2. profitability and financial strength
A company's mission statement typically addresses which of the following questions?
"Who are we, what do we do, and why are we here?"
The two most important parts of SWOT analysis are
(1) drawing conclusions from the four SWOT lists about the company's overall situation and (2) translating these conclusions into strategic actions and an overall strategy that matches the company's internal and external situation
As shown in Figure 4.2, the three steps of SWOT analysis include
(1) identifying the company's internal strengths and weaknesses, its market opportunities, and the external threats to its future well-being, (2) drawing conclusions from the SWOT things about the company's overall business situation, and (3) translating these conclusions into strategic actions for improving the company's strategy and business prospects
Six questions
1. How well is the company's present strategy working? 2. What are the company's important resources and capabilities, and do they have the competitive power to enable the company to build and/or sustain a competitive advantage over rival companies? 3. What are company's competitively important strengths and weaknesses in relation to its market opportunities and the external threats to its future well-being? 4. Are the company's prices and costs competitive with those of key rivals, and does it have an appealing customer value proposition? 5. Is the company competitively stronger or weaker than key rivals? 6. What strategic issues and problems merit front-burner managerial attention?
why do companies expand into foreign markets?
1. To gain access to new customers 2. To achieve lower costs and enhance competitiveness 3. To spread business risk across a wider market base 4. To further capitalize on resource strengths and capabilities 5. To obtain access to valuable natural resources
strategy vs. business model
-strategy deals with the firm's competitive initiatives and business approaches -business model concerns whether the revenues and costs flowing from the strategy demonstrate the firm can be profitable and viable
Developing a Strategic Vision (task one)
...Delineates management's future aspirations for the firm to its stakeholders. Provides direction—"where we are going." Sets out the compelling rationale (strategic soundness) for the firm's direction. Uses distinctive and specific language to set the firm apart from its rivals.
pitfalls of the low-cost provider strategy
1. Being overly aggressive with price cutting and ending up with lower profitability 2. Relying on an approach to reduce costs that can be easily copied by rivals 3. Being too fixated on cost reduction and lowering the quality of the product too much
2 main approaches to defensive strategy
1. Block the avenues open to challengers 2. Signal challengers that retaliation is likely
when a broad differentiation strategy works best
1. Buyer needs and uses of the product are diverse 2. There are many ways to differentiate the product/service that have value to buyers 3. Few rival firms are following a similar differentiation approach 4. Technological change is fast-paced and competition revolves around rapidly evolving product features
risks of a focused strategy (low-cost or differentiated)
1. Competitors find effective ways to match a focuser's capabilities in serving the target niche 2. Preferences and needs of niche members shift over time toward the attributes desired by mainstream buyers 3. A segment is so attractive that new rivals enter the market and overcrowd
methods to revamp the value chain to increase differentiation
1. Coordinating with channel allies to enhance customer perceptions of value 2. Coordinating with suppliers to better address customer needs
5 objectives of merger and acquisition strategies
1. Creating a more cost-effective operation out of the combined companies 2. Expanding a firm's geographic coverage 3. Extending the firm's business into new product categories 4. Gaining quick access to new technologies or other resources and competitive capabilities 5. Leading the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities
the DON'TS of setting objectives
1. DON'T set targets that have no adverse consequences if they're not achieved 2. DON'T set targets that represent average performance 3. DON'T set unspecific performance targets
Crafting and executing a company's strategy is an ongoing process that consists of five interrelated managerial tasks:
1. Developing a strategic vision 2. Setting objectives 3. Crafting a strategy to achieve the objectives 4. Implementing and executing the chosen strategy 5. Monitoring developments, evaluating performance, and initiating corrective adjustments
The strategy-making, strategy-executing process
1. Developing a strategic vision, a mission statement, and a set of core values. 2. Setting objectives for measuring the firm's performance and tracking its progress. 3. Crafting a strategy to move the firm along its strategic course and to achieve its objectives. 4. Executing the chosen strategy efficiently and effectively. 5. Monitoring developments, evaluating performance, and initiating corrective adjustments.
pitfalls of the broad differentiation strategy
1. Differentiation strategies that are easily or quickly imitated are doomed 2. If the firm's attempt at differentiation produces an unenthusiastic response from buyers 3. Overspending on efforts to differentiate the offering, thus eroding profitability 4. Offering only trivial improvements in quality or service compared to the products of rivals that go unnoticed or are aren't important 5. Adding so many unnecessary frills that the product exceeds the needs of most buyers 6. Charging too high a price premium
Ways to test the competitive power
1. Does the resource or capability have competitive value? 2. Do many or most rivals have much the same resource or capability? 3. Is the resource or capability hand to copy? 4. Can the value of a resource or capability be trumped by substitute resources and capabilities of rivals?
2 tests to determine if the strategy was executed successfully
1. Has the firm met or exceeded its strategic and financial performance targets? 2. Is the firm making good progress in achieving its strategic vision? *good strategy execution requires operational excellence and management*
Five Competitive Forces
1. The market maneuvering and jockeying for buyer patronage among rival sellers in the industry 2. The threat of new entrants into the market 3. The attempts of companies in other industries to win buyers over their own substitute products 4. The exercise of supplier bargaining power 5. The exercise of buyer (or customer) bargaining power
factors that make global expansion complex and risky
1. Important cross-country differences in buyer tastes, market sizes, and growth potential 2. Cross-country differences in wages, worker productivity, inflation rates, energy costs, taxes, and other factors that impact a firm's costs and profit prospects 3. Governmental policies/regulations that make the business climate more favorable in some countries than others 4. The risks of adverse shifts in currency exchange rates
political risks affecting foreign business climate
1. Instability of a weak government 2. Growing possibilities that revolution will occur against dictatorship 3. Likelihood that current or future leaders will pursue stringent regulations 4. Potential for future elections to produce corrupt leaders
industry life-cycle stages
1. Introduction: new unknown products, poorly defined market segments, unspecified product features, low sales growth, rapid technological change, operating losses, and a need for financial support 2. Growth: brand recognition, differentiated products, financial resources to support value chain 3. Maturity: slowing demand growth, saturated markets, direct competition, price competition, and strategic emphasis on efficient operations 4. Decline: falling sales/profits, increasing price competition, and industry consolidation
best targets for offensive attacks
1. Market leaders that are vulnerable 2. Runner-up firms with weaknesses in areas where the challenger is strong 3. Struggling enterprises that are on the verge of going under 4. Small local and regional firms with limited capabilities
principle offensive strategy options
1. Offering an equally good or better product at a lower price 2. Leapfrogging competitors by being first to market with next-gen. products 3. Pursuing continuous product innovation to draw sales and market share away from less innovative rivals 4. Adopting and improving on the good ideas of other companies 5. Using hit-and-run tactics to grab market share from complacent or distracted rivals 6. Launching a preemptive strike to secure an advantageous position that rivals are prevented or discouraged from duplicating
when a low-cost provider strategy works best
1. Price competition among rival sellers is vigorous 2. Products of rival sellers are essentially identical and readily available from many sellers 3. There are few ways to achieve product differentiation in ways that have value to buyers 4. Most buyers use the product in the same ways 5. Buyers incur low costs in switching their purchases from one seller to another 6. The majority of industry sales are made to a few, large volume buyers 7. Industry newcomers use introductory low prices to attract buyers and build a customer base
when a best-cost provider strategy works best
1. Product differentiation is the norm 2. Value-conscious buyers can be induced to purchase mid-range products rather than cheap, basic products or very expensive products 3. Masses of buyers have become value-conscious
methods to revamp the value chain to lower costs
1. Selling direct to consumers and bypassing the activities and costs of distributors and dealers 2. Streamlining operations by eliminating low value-added or unnecessary work steps and activities 3. Reducing materials handling and shipping costs by having suppliers locate their plants/warehouses close to the company's own facilities
economic risks affecting foreign business climate
1. Stability of a country's economic and monetary system (inflation, deficit spending, and risky bank lending practices) 2. Piracy of a foreign firm's intellectual property
Five frequently used and dependable strategic approaches to setting a company apart from rivals, delivering superior value, achieving competitive advantage, and converting buyers into loyal customers are:
1. Striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantage over rivals 2. Outcompeting rivals based on such differentiating features as higher quality, wider product selection added performance, value-added services, more attractive styling, technological superiority, or some other attributes that set a company's product offering apart from those rivals 3. Offering more value for the money 4. Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers that compose the niche 5. Developing expertise and resource strengths that give the company competitive capabilities that rivals cant easily imitate or trump with capabilities of their own
cost-cutting methods using cost drivers (cost-efficient management of value chain activities)
1. Striving to capture all economies of scale 2. Taking advantage of experience and learning-curve effects 3. Trying to operate facilities at full capacity 4. Improving supply chain efficiency 5. Using lower cost inputs when it won't affect quality 6. Using the company's bargaining power with suppliers or forward channel allies 7. Using communication systems and information technology to achieving operating efficiencies 8. Employing advanced production technology and process design to improve overall efficiency 9. Being alert to the cost advantages of outsourcing or vertical integration 10. Motivating employees through incentives and company culture
differentiation methods using uniqueness drivers
1. Striving to create superior product features, design, and performance 2. Improving customer service or adding additional services 3. Pursuing production R&D activities 4. Striving for innovation and technological advances 5. Pursuing continuous quality improvement 6. Increasing emphasis on marketing and brand-building activities 7. Seeking out high-quality inputs 8. Emphasizing human resource management activities that improve skills/knowledge of company personnel
when a focused strategy (low-cost or differentiated) works best
1. Target market niche is big enough to be profitable with growth potential 2. Industry leaders have chosen not to compete in the niche 3. It's costly or difficult for multisegment competitors to meet specialized needs 4. A focuser can pick the niche best suited to its resources and capabilities 5. Few if any rivals are attempting to specialize in the same target segment
Three tests can be applied to determine the merits of one strategy vs. another and distinguish a winning strategy from a so-so or flawed strategy
1. The Fit Test 2. The Competitive Advantage Test 3. The Performance Test
Assessing a Company's Industry and Competitive Environment
1. What competitive forces do industry members face, and how strong are they? 2. What forces are driving changes in the industry, and what impact will these changes have on competitive intensity and industry profitability? 3. What market positions do industry rivals occupy-- who is strongly positioned and who is not? 4. What strategic moves are rivals likely to make next? 5. What are the key factors for future competitive success? 6. Is the industry outlook conducive to good profitability?
3 strategic questions companies need to answer
1. What is the firm's present situation? 2. What direction to head and what performance targets to set? 3. How to run the firm in ways that produce good results?
when to go on the offensive
1. When a company spots opportunities to gain profitable market share at the expense of rivals 2. When a company has no choice but to try to whittle away at a strong rival's competitive advantage
when there are first-mover advantages
1. When pioneering helps build a firm's reputation and creates strong brand loyalty 2. When a first-mover's customers will thereafter face significant switching costs 3. When property rights protections thwart rapid imitation of the initial move 4. When an early lead enables the first mover to move down the learning curve ahead of rivals 5. When a first mover can set the technical standard for the industry
when there are first-mover disadvantages
1. When pioneering is more costly than imitative following, thus allowing the follower to end up with lower costs 2. When products from the first mover are primitive and don't live up to buyer expectations, thus allowing the follower to end up with better products 3. When rapid market evolution (due to fast-paced changes in tech. or buyer needs) gives followers the opening to leapfrog a first-mover's products with better products 4. When market uncertainties make it difficult to ascertain what will eventually succeed, allowing followers to determine what buyers' needs are 5. When customer loyalty to the pioneer is low and a first mover's skills and actions are easily copied
Competitive Pressures from Substitute Products are strong, moderate, or weak
1. Whether substitutes are readily available and attractively prices 2. Whether buyers view the substitutes as comparable or better in terms of quality, performance, and other relevant attributes 3. Whether the costs that buyers incur in switching are high or low
pattern of actions/business approaches that define a strategy
1. actions to gain sales and market share via more performance features 2. actions to respond/adjust to changing market conditions or other external factors 3. actions to enter new geographic or product markets or to exit existing ones 4. actions to capture emerging market opportunities and defend against external threats 5. actions to strengthen market standing by acquiring or merging with other companies 6. actions to strengthen competitiveness via strategic alliances and partnerships 7. actions/approaches used in managing R&D, production, sales, marketing, finance, etc. 8. actions to upgrade or acquire competitively valuable capabilities and to correct weaknesses 9. actions to diversify the revenues and earnings by entering new businesses
types of turnaround strategies
1. asset and cost surgery- trying to get rid of inventories and reducing costs 2. selective product and market pruning- discontinue failing product lines and focus on a few profitable lines 3. piecemeal productivity improvements- eliminate costs and improve productivity in small gains
SWOT analysis
1. build on STRENGTHS 2. remedy the WEAKNESSES 3. take advantage of OPPORTUNITIES 4. protect the firm from THREATS
reasons why a strategy must evolve over time
1. changing market conditions 2. advancing tech 3. fresh moves of competitors 4. shifting buyer needs and preferences 5. emerging market opportunities 6. new ideas for improving the strategy 7. mounting evidence the current strategy is not working
strategy-making hierarchy
1. corporate strategy: overall companywide game plan 2. business strategy: how to strengthen market position and gain competitive advantage for that line 3. functional area strategies: add detail to the hows of overall business strategy; provides game plan for managing a particular activity 4. operating strategies: adds detail to business and functional strategies; game plan for managing specific lower-level activities
why a strategic vision matters
1. crystallizes executives' views about long-term direction 2. reduces the risk of unguided decision making 3. wins support for changes that will propel the firm along its chosen strategic path 4. guides lower-level mangers' operating decisions 5. helps the firm prepare for the future
2 crucial elements of the business model
1. customer value proposition 2. profit formula
(strategically relevant) components of a company's macro-environment
1. demographic 2. sociocultural 3. legal/political 4. technological 5. economic 6. global
5 steps to the strategy making process
1. develop a strategic vision, mission, and core values 2. set objectives 3. craft a strategy to achieve the objectives and the company vision 4. execute the strategy 5. monitor developments, evaluate performance, and initiate corrective adjustments
a firm that is staking out a strong position in an industry of the future needs alliances to:
1. establish a stronger initial competitive position for participating in the target industry 2. master new technologies, new expertise and competencies faster than through internal efforts alone 3. open up broader opportunities in the target industry by melding the firm's own capabilities with the expertise and resources of partners
2 types of objectives
1. financial- focused on financial performance 2. strategic- focused on market standing, competitive vitality, and future business prospects
ways to define a target segment/niche
1. geographic uniqueness 2. specialized requirements in using the product 3. special product attributes that appeal only to niche members
a firm that is racing for global market leadership needs alliances to:
1. get into critical country markets quickly and accelerate the building of its global market presence 2. gain inside knowledge about unfamiliar markets and cultures through alliances with local partners 3. access valuable skills and competencies that are concentrated in particular geographic locations
The task of effectively communicating the strategic vision to organization members is made easier by
Capturing the essence of the vision in an easily remembered phrase or catchy slogan and then using the phrase/ slogan repeatedly as a reminder of "where we are going and why"
Driving Forces
Changes in an industry's long-term growth rate Increasing globalization Emerging new internet capabilities and applications Changes in who buys the product and how they use it Product innovation Technological change manufacturing process innovation Marketing innovation Entry or exit of major firms Diffusion of technical know-how across more companies and more countries Changes in cost and efficiency Growing buyer preferences for differentiated products instead of a commodity product (or for a more standardized product instead of strongly differentiated products) Reductions in uncertainty and business risk Regulatory influences and government policy changes Changing societal concerns, attitudes, and lifestyles
The five-forces model of competition includes all but which one of the following?
Competitive pressures triggered by the industry's driving forces
Which one of the following is not part of the task of identifying the strategy-related issues and problems that merit the front-burner attention of company managers?
Determining what strategic actions to take and which strategic moves to make
Which of the following are key tasks in the strategy making, strategy-executing process?
Developing a strategic vision, mission, and core values; setting objectives; and crafting a strategy to achieve the objectives and move the company along the strategic course management has charted
Valuable Company Resources
Physical assets Human assets and intellectual capital Organizational resources Financial resources Intangible assets Relationships
Which one of the following conditions weakens the competitive pressures associated with the threat of entry?
Existing industry members have little interest in expanding their market reach by entering product segments or geographic areas they currently do not have a presence
Two types of objective
Financial and strategic
Outer-Ring Components of a Company's Macro-Environment
General economic conditions Political, legal, and regulatory influences Technological influences Sociocultural influences (values, lifestyles, and shifting population demographics) Considerations relating to the natural environment
Which of the following are characteristics of an effectively worded strategic vision statement?
Graphic, forward-looking and directional, and focused
In table 4.2, which one of the following is not an example of a potential weakness or competitive deficiency that a company may have?
Having a single, unified functional instead of several distinct functional strategies
In Table 4.2, which of the following is not an example of an external threat to a company's future profitability?
Having too few resources and capabilities that are well-matched to the company's available market opportunities
Which one of the following provides the most accurate picture of whether a company is cost competitive with its rivals?
How the combined costs of a company's internally performed activities, the activities performed by its suppliers, and the activities performed by its forward channel allies compare against the costs of the supplier-performed, internally-performed, and forward channel ally-performed value chain systems employed by rival firms
Which of the following is not option for lowering the costs of distribution-related activities?
Implementing an activity-based cost accounting system for all distribution-related activities and ceasing to perform all those distribution-related activities having unacceptably high costs
Short-term objectives
Milestones that must be achieved, usually within six months to one year, in order to reach long-term objectives.
Which of the following is not a frequently used and dependable strategic approach to setting a company apart from rivals, delivering superior value, achieving competitive advantage, and converting buyers into loyal customers?
Outcompeting rivals by having the most unique and economically-priced product offering of any firm in the industry
Which of the following generally do not qualify as a barrier to entry?
Rapid market growth and low degrees of customer loyalty to existing brands
Which of the following is the best example of a well-stated strategic objective?
Reduce production costs per unit by 10% within 12 months
Competitive Pressures Created by the Rivalry among Competing Sellers
Rivalry intensifies when competing sellers are active in launching fresh actions to boost their market standing and business performance; conversely, rivalry is weaker when competing sellers seldom make aggressive moves to boost their sales/market shares by taking customers and sales away from rivals Rivalry is usually weaker when buyer demand is growing rapidly, and stronger when buyer demand is growing slowly or even falling Rivalry increases as it becomes less costly for buyers to switch brands and decreases as buyers' costs to switch brands become more expensive or otherwise troublesome Rivalry increases as the products of rival sellers become less differentiated and weakens as the products of industry rivals become more strongly differentiated Rivalry is more intense when industry members have too much inventory or significant amounts of idle production capacity, especially if the industry's product entails high storage costs or high fixed costs Rivalry tends to be more intense when a product is costly to hold in inventory, perishable or seasonal Rivalry usually becomes more intense as competitors become more equal in size and capability, and as the number of competitors increases Rivalry increases when one or more competitors become dissatisfied with their sales volumes and launch offensives to steal business away from rivals Rivalry increases when strong companies outside the industry acquire weak firms in the industry and launch aggressive, well-funded moves to transform their newly acquired competitors into major market contenders Rivalry often becomes more intense-- as well as more volatile and unpredictable--when competitors have diverse views about where the industry is headed and/or have sharply differing long-term directions, objectives, strategies, and resource capabilities and/or have production facilities in different countries with different production costs
Which of the following is not a component of evaluating a company's resources capabilities, relative cost position, and competitive strength versus rivals?
Scanning the environment to determine which company strengths offer the best prospects for achieving sustainable competitive advantage
Approaches to objective-setting to avoid:
Setting unspecific targets like "maximize profits," "reduce costs," "become more efficient," or "increase revenues" Setting targets for the upcoming year that, if, achieved, would represent only "average" performance Setting targets that carry no adverse consequences for organizational members if actual performance short of targeted performance
Which of the following is not generally a "driving force" capable of producing fundamental changes in industry and competitive conditions?
Shifts upward of downward in interest rates, the inflation rate, and the unemployment rate
Long-term objectives
Specific results, accomplished in three to five years, that an organization seeks to achieve in pursuing its mission
Financial Objectives
Targets expressed in money terms such as making a profit, earning income or building wealth.
According to Figure 4.1, which of the following is not pertinent in identifying a company's present strategy?
The company's strategic intent and the moves it has made to build an attractive value chain
Most widely encountered barriers that entry candidates must hurdle include
The cost advantages enjoyed by industry incumbents Strong brand preferences and high degrees of customer loyalty High capital requirements The difficulties of building a network of distributors or retailers and securing adequate space on retailers' shelves Restrictive or costly regulatory policies Tariffs and international trade restrictions
Which of the following is not accurate as concerns who is involved in crafting a company's strategy?
The more that a company's operations cut across different products, industries, and geographical areas, the more that headquarters executives have little option to delegate considerable strategy-making authority to down-the-line managers in charge of particular subsidiaries, divisions, product lines, geographic sales offices, distribution centers, and plants
Which of the following is not an appropriate guideline for developing a strategic group map for a given industry?
The variables chosen as axes for the map can be either the two strongest of the five competitive forces or the two strongest of the industry's driving forces
Which of the following is not one of the objectives of benchmarking?
To learn which company in an industry is using the greatest number of best practices in performing its value-chain activities and thus very likely has the industry's lowest cost value chain
An effectively communicated vision is a valuable management tool for enlisting the commitment of the firm's personnel to actions that will move the firm in its intended strategic direction
Vision helps move in the intended strategic direction
Which of the following questions is not something company managers should consider in thinking strategically about their company's directional path and developing a strategic vision?
What business approaches and operating, practices should we consider in trying to implement and execute out business model?
three strategic questions
What is the present situation? Where do we want to go? How do we plan to get there?
objectives
a firm's performance targets- the particular results and outcomes management wants to achieve; must be quantifiable/measurable, contain a deadline, and spell out how much of what kind of performance by when *companywide objectives must be broken down into performance targets for each separate business unit*
Bargaining Power increases
When buyer demand is weak in relation to the available supply and industry members are eager to sell more units When industry members' products are standardized "commodities" or else weakly differentiated When buyers have low costs in switching to competing brands or substitutes When the number of buyers is small or retaining a particular buyer's business is important to a seller When buyers are well informed and have compared the product offerings of industry members regarding prices, product features, quality, buyer review, and other pertinent factors When buyers pose a credible threat of integrating backward into the business of sellers When buyers have discretion to delay their purchases or perhaps not make a purchase at all
In which one of the following instances is the rivalry among competing sellers generally stronger?
When one or more rivals are dissatisfied with their business performance and are making aggressive moves to abstract more customers
In which of the following instances are industry members subject to stronger competitive pressures from substitute products?
When substitutes are readily available, are attractively prices, and have comparable or better attributes and performance features
Sustainable Competitive Advantage
When the basis for buyer preferences for its product offering relative to the offerings of its rivals is durable, despite competitors' efforts to nullify or overcome the appeal of its product offering
Which one of the following statements is false when it comes to using value chain analysis to determine a company's cost competitiveness?
Whether a company's costs are competitive with those of its close rivals depends on how the costs of its internally performed value chain activities compare with the costs of the internally-performed value chain activities compare with the costs of the internally-performed value chain of its close rivals
Circumstances determine the nature and strength of supplier bargaining power
Whether certain needed inputs are in short supply Whether certain suppliers provide a differentiated input that enhances the performance or quality of the industry's product Whether certain suppliers provide equipment or services that deliver valuable cost-saving efficiencies to industry members in operating their production processes Whether the item being supplied is a standard item or commodity that is readily available from a host of suppliers at the going market price Whether it is difficult or costly for industry members to switch their purchases from one supplier to another to switch to attractive substitute inputs Whether industry members are major customers of suppliers Whether suppliers provide an item that accounts for a sizable fraction of the costs of the industry's product Whether only a few suppliers are regarded as the best or preferred sources of a particular item Whether industry members have sound business reasons to integrate backward and self-manufacture items they have been buying from suppliers Whether suppliers have the resources and profit incentive to integrate forward into business of the customers they are supplying
The competitive power of a company resources of capability does not hinge on which one of the following?
Whether the resource or capability represents a technological asset or a marketing asset
Which one of the following is not a factor that affects the strength of supplier bargaining power?
Whether there are greater or fewer than ten suppliers of a particular item
Which one of the following is not a useful question for company managers to pose in trying to predict the likely actions of important rivals?
Which competitors are in the best strategic group in the industry?
Based on Figure 3.4, which of the following is not a typical competitive weapon that a company can use to battle rivals and attract buyers
Winning a bigger market share
Typically, a company's strategy is
a blend of (1) proactive actions to improve the company's financial performance and secure a competitive edge and (2) as needed reactions to unanticipated developments and fresh market conditions
Strategic group
a cluster of industry rivals that employ similar competitive approaches, have product offerings that appeal to similar types of buyers, and this occupy similar market positions
acquisition
a combination in which one firm, the acquirer, purchases and absorbs the operations of another
realized strategy
a combination of both deliberate and emergent strategic moves
The difference between a company competence and a core competence is that
a company competence is an activity that a firm performs consistently well and at acceptable cost whereas a core competence is an activity that a company not only performs quite well but is central to its strategy and competitiveness
strategy
a company's action plan for outperforming its competitors and achieving superior profitability; needs to be distinctive from that of a competitors -> about competing differently and gaining a competitive advantage
the risk of best-cost provider strategy
a company's biggest vulnerability is getting squeezed between rivals using low-cost and high-end differentiation strategies must offer significantly lower prices than differentiated products and significantly better product attributes than low-cost products
sustainable competitive advantage
a competitive advantage that other companies have tried unsuccessfully to duplicate and have, for the moment, stopped trying to duplicate
Distinctive competence
a competitively important activity that a company performs better than its rivals
uniqueness driver
a factor that can have a strong differentiating effect
cost driver
a factor that has a strong influence on a company's costs
strategic alliance
a formal agreement between two or ore separate firms in which they agree to work toward some common objective involves: 1. strategically relevant collaboration 2. joint contribution of resources 3. shared risk 4. shared control 5. mutual dependence
Resource/capability bundle
a group of resources and/or capabilities that, when linked and integrated into a functioning whole, has greater competitive value than the summed value of the individual components
joint venture
a partnership involving the establishment of an independent corporate entity that the partners own and control jointly, sharing in its revenues and expenses
business model
a plan that details how a company creates, delivers, and generates revenues
Benchmarking
a potent tool for learning which companies are best at performing particular activities and emulating their techniques to improve the cost and effectiveness of a company's own internal activities
competitive advantage
a set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition
SWOT Analysis
a simple but powerful tool for sizing up a company's competitively relevant strengths and weaknesses, its market opportunities, and the external threats to its future well-being
Mission Statement
a statement of the organization's purpose - what it wants to accomplish in the larger environment describes the present business and purpose
turnaround strategy
a strategy that reverses a firm's decline in performance and returns it to growth and profitability
Strategic group mapping
a technique for displaying the different market positions that rival firms occupy in the industry
competitive advantage
a type of edge over rivals in attracting buyers and coping with competitive forces; 1) giving buyers what they perceive as superior value compared to rival's offerings or 2) giving buyers the same value as other at a lower cost
A company's strategic plan consists of
a vision of where it is headed, a set of performance targets, and a strategy to achieve them
Changing circumstances and ongoing managerial efforts to improve the strategy
account for why a company's strategy evolves over time and why the task of crafting a company's strategy is a work in progress, not a one-time event
According to Figure 1.1, which of the following is not something to look for in identifying a company's strategy?
actions to strengthen the company's competitive position by hiring one or more new top executives of laying off a portion of its work force or paying down its long-term debt
Operating Strategies
add detail and completeness to business and functional strategy provide a game plan for managing specific lower- echelon activities with strategic significant
Core Competence
an activity that a company performs quite well and that is also central to its strategy and competitiveness more important capability than a competence because it adds power to a company's strategy and has a bigger positive impact on its competitive success
A company achieves sustainable competitive advantage when
an attractive number of buyers are drawn to purchase its products or services rather than those of competitors, despite the efforts of competitors to nullify or overcome the appeal of its product offering
scenario analysis
an in-depth approach to environmental forecasting that involves experts' detailed assessments of societal trends, economics, politics, technology, or other dimensions of the external environment
Objectives
an organization's performance targets-- the results and outcomes management wants to achieve
examples of financial objectives
an x percent increase in annual revenues annual increases in after tax profits of x percent annual increases in earning per share of x percent annual dividend increases of x percent profit margins of x percent
An industry's key success factors
are the particular strategy elements, product attributes, resource strengths, competitive capabilities, and market achievements that spell the difference between being a strong competitor and a weal competitor--and sometimes between profit and loss
In choosing among strategy alternatives, company managers
are well-advised to embrace strategic actions that can pass the test of moral scrutiny--it is not enough to just stay within the bounds of what is legal and is in compliance with prevailing government regulations
Financial Objectives
relate to the financial performance targets management have established for the organization to achieve
Do's of wording a vision statement
be graphic in painting a clear picture be forward looking and directional keep it focused and specific have some wiggle room be sure the journey is feasible indicate why the directional path makes good business sense make it memorable
a winning strategy must
be well suited to the firms internal and external situation, help build a sustainable competitive advantage, and improve company performance
Industry conditions change
because forces in the industry environment are enticing or pressuring certain industry participants (competitors, customers, suppliers) to alter their actions in important ways
A company needs financial objectives
because without adequate profitability and financial strength, a company's pursuit of its strategic vision as well as its long-term health and ultimate survival, are jeopardized
core values
beliefs, traits, and behavioral norms that the firm's personnel are expected to display in conducting the firm's business and pursuing its strategic vision and mission
mission statement
briefly describes its present business and purpose in language that gives the company its own unique identity 1. identifies current products/services 2. specifies the buyer needs it seeks to satisfy and the markets it serves 3. indicates the company's scope of operations/technology it employs
the bargaining power of buyers
buyers threaten an industry by: 1. forcing prices down 2. bargaining for higher quality or more services 3. playing competitors against each other a buyer group is POWERFUL when: 1. it's concentrated or purchases large volumes 2. products it purchases are standard or undifferentiated 3. buyer has few switching costs 4. it earns low profits 5. the product isn't important to the buyer
test of moral scrutiny
cannot cross the line from "should do" to "should not do"
Vision Statement
clearly conveys a company's long-term direction and says something definitive about what top executives want the company's product-market-customer-business makeup to be in three to five (or more) years
vision statement
clearly conveys a firm's long-term direction; needed to guide the firm in the intended strategic direction *needs to be long-term, focused and specific, and memorable*
Balanced Scorecard
combines financial measures that tell the results of actions already taken with strategic measures on customer satisfaction, internal processes and the corporation's innovation and improvement activities—the drivers of future financial performance
Strategy
competitive moves and business approaches that managers employ to attract and please customers, compete successfully capitalize on opportunities to grow the business respond to the changing market conditions, conduct operations, and achieve targeted financial and market performance
focused low-cost strategy
concentrating on a narrow buyer segment or market niche and outcompeting rivals on costs, thus being able to serve niche members at a lower price attractive when a firm can lower its costs by limiting its customer base to a well-defined segment cost advantage over rivals are the same as low-cost provider strategy
focused differentiation strategy
concentrating on a narrow buyer segment or market niche and outcompeting rivals with a product offering that meets the specific tastes and requirements of niche members better than rivals
Capability
concerns the proficiency with which a company can perform an activity
business model
concerns whether revenues and cost flowing from the strategy demonstrate the firm can be profitable and viable
deliberate strategy
consists of proactive strategy elements that are both planned and realized as planned
emergent strategy
consists of reactive strategy elements that emerge as changing conditions warrant
The managerial purpose of setting objectives is to
convert the strategic vision and mission into specific performance targets-- the results and outcomes management wants to achieve, objectives function as yardsticks for measuring how well the company is doing
In a diversified or multi-business company, the strategy-making hierarchy (as shown in Figure 2-2) consists of
corporate strategy, a business strategy for each business the company has diversified into, and functional and operating strategies within each business
At companies where the stated values are real rather than cosmetic, company managers can connect the stated values to pursuit of the strategic vision and mission by
crafting a vision, mission, strategy, and set of operating practices that match established values and repeatedly emphasizing how the values-based behavioral norms contribute to the company's business success
The primary roles/ obligations of a company's board of directors in the strategy-making, strategy-executing process include
critically appraising the company's direction, strategy, and business approaches and evaluating the caliber of senior executives' strategy-making and strategy-executing skills
strategy
deals with competitive initiatives and business approaches
Mission Statement
describes its present business scope and purpose (who we are, what we do, and why we are here)
Strategic Vision
describes the route a company intends to take in developing and strengthening its business
Don'ts of wording a vision statement
don't dwell on the present don't be vague or incomplete don't use overly broad language don't state the vision in bland or uninspiring terms don't be generic don't rely on or overuse superlatives don't run on and on
Strategic objectives
related to target outcomes that indicate a company is strengthening its market standing, competitive vitality, and future business prospects
Crafting a strategy (task three)
entails stitching together management's answers to a series of "hows" how to attract and please customers how to compete against rivals how to positions the firm in the marketplace to capitalize on attractive opportunities to grow the business how to respond to changing economic and market conditions how to manage each functional piece of the business how to achieve the firm's performance targets
in most companies crafting and executing a strategy is a collaborative team effort where:
every manager has a role for the areas he or she heads. it is flawed thinking to view crafting and executing strategy as tasks that only high level executives can do.
Vision Statement
expresses what the organization should become, where it wants to go strategically. clearly conveys long term direction, and what is expected in 3-5 years
A "balanced scorecard" that includes both strategic and financial performance targets is a conceptually strong approach for judging a company's overall performance because
financial performance measures are lagging indicators that reflect the results of past decisions and organizational activities whereas the best and most reliable leading indicators of a company's future financial performance and business prospects are strategic outcomes that indicate whether the company's market position and competitiveness are stronger or weaker
A winning strategy is one that
fits the company's internal and external situation, improves company performance, and helps achieve sustainable competitive advantage
A company's macro-environment concerns
general economic conditions; political, legal, and regulatory influences; technological influences; socialcultural forces (societal values, lifestyles, and shifting population demographics); considerations relating to the natural environment; and, closer to home, the industry and competitive arena in which the company operates--as shown in Figure 3.2
best-cost provider strategy
giving customer more value for their money by satisfying buyers' expectations on key quality/features/performance/service attributes while beating their price expectations; hybrid strategy that blends elements of differentiation and low-cost strategies
What must managers do well to give a firm its best shot for being very profitable and successful in the marketplace?
good management requires good strategic thinking, good strategy-making, and good strategy execution
How well a firm performs and the degree of market success it achieves are directly attributable to the caliber of its strategy and the proficiency with which the strategy is executed
good strategy and good strategy execution are the most telling and trustworthy signs of good management
Three tests of a winning strategy
goodness of fit Competitive Advantage Performance
Calculated weighted competitive strength scores for a company and comparing them against the weighted competitive strength scores of key competitors
helps a company decide what offensive and defensive moves strategic moves to make-- which of its competitive strengths to exploit in winning business away from rivals and which competitive weaknesses to try to correct
Calculating weighted competitive strength scores for a company and comparing them against the weighted competitive strength scores of key competitors
helps a company decide what offensive and defensive moves strategic moves to make-- which of its competitive strengths to exploit in winning business away from rivals and which competitive weaknesses to try to correct
Whether an industry presents a company with good prospects for attractive growth and profitability
hinges in part on such considerations as the industry's growth potential, the anticipated strength of competitive forces, whether the company is strongly or weakly positioned on the industry's strategic group, and whether and to what degree industry profitability will be favorably or unfavorably affected by the industry's driving forces
profit formula
how the firm will create and deliver customer value in a cost-efficient manner and at a price that produces enough revenues to cover costs and enable profit *the lower a firm's costs are in relation to the revenues generated, the more appealing its profit formula*
The How's that define a strategy
how to attract customers how to compete against rivals how to capitalize on growth opportunities how to respond to changing economic conditions how to manage functional pieces of the business how to achieve the firm's performance targets
Crafting and executing strategy are top-priority managerial tasks because
how well a company performs and the degree of market success it achieves are directly attributable to the caliber of its strategy and the proficiency with which the strategy is executed
Value Chain
identifies the primary activities it performs that create customer value and the related support activities
Strategic intent refers to a situation where a company
relentlessly pursues an ambitious strategic objective, concentrating that full force of its resources and competitive actions on achieving that objective
the rivalry among existing competitors
includes: 1. price competition 2. advertising battles 3. product introductions 4. increased customer service or warranties factors that lead to rivalry: 1. numerous or equally balanced competitors 2. slow industry growth 3. high fixed or shortage costs 4. lack of differentiation or switching costs 5. capacity augmented in large increments 6. high exit barriers
outsourcing
involves contracting out certain value chain activities to outside vendors
backward integration
involves entry into activities previously performed by suppliers or other enterprises positioned along earlier stages of the industry value chain
forward integration
involves entry into value chain activities closer to the end user
A resource bundle
is a group of resource that, then linked and integrated into a functioning whole, has greater competitive value, then the summed value of the individual resource components in other words combining individual resources into an integrated bundle produces a 1 + 1=3 gain in competitive power (as opposed to only a 1+1=2 gain when the same resources are unbundled)
A competitive environment where there is weak to moderate rivalry among sellers, high entry barriers, weak competition from substitute products, and little bargaining leverage on the part of both suppliers and customers
is conducive to industry members earning attractive profits
The reputational and financial damage that unethical strategies and behavior can do to a company
is substantial; consequently, there are good business reasons for a company and its personnel to avoid unethical strategic actions and behaviors
a firm exhibits strategic intent when
it relentlessly pursues and ambitious strategic objective concentrating the full force of its resources and competitive actions on achieving that objective
The two crucial elements of a company's business model are
its customer value proposition ( the company's approach to satisfying buyer needs and requirements at a price they will consider a good value) and its "profit formula" (its business approach to generating sufficiently large revenues and controlling the costs of its value proposition, such that the company will be appealingly profitable in delivering the intended value to customers)
In a weighted competitive strength assessment like the one illustrated in Table 4.3, each strength measure is assigned an importance weight based on
its perceived importance in determining the degree to which a company's competitive power in the marketplace is strong, average, or weak
The difference between a company's strategy and a company's business model is that
its strategy is defined by the specific market positioning, competitive moves, and business approaches management employs to try to produce good business results while its business model relates to management's blueprint for delivering a valuable product or service to customers in a manner that will generate revenues sufficient to cover costs and yield an attractive profit
customer value proposition
lays out the company's approach to satisfying buyer wants and needs at a price customers will consider a good value *the greater the value delivered to customers and the lower the price, the more attractive the value proposition is to customers*
The value of doing a weighted competitive strength assessment is to
learn how the company ranks relative to rivals on each of the important factors that determine market success and ascertain whether the company has a net competitive advantage or disadvantage versus its closest rivals
business model
management's blueprint for how strategy and operating approaches will create value for customers in a manner that will generate revenues sufficient to cover costs and yield an attractive profit
A company's strategy is most accurately defines as
management's commitment to pursue a particular set of actions in attracting and pleasing customers, competing successfully, capitalizing on opportunities to grow the business, responding to changing market conditions, conducting operations, and achieving the targeted financial and market performance
strategic plan
maps out where a company is headed, establishes strategic and financial targets, and outlines the competitive moves and approaches to be used in achieving the desired business results *must answer the "hows"*
One of the five tasks of the strategy-making, strategy-executing process (Figure 2.1) is for company managers to
monitor new external development, evaluate the company's progress, and make corrective adjustments in order to decide whether to continue or change the company's strategic vision and mission objectives strategy and/or strategy execution methods
A company's strategy evolves from one version to the next because of
the proactive efforts of company managers to improve this or that aspect of the strategy, a need to respond to changing customer requirements and expectations, and a need to react to the fresh strategic maneuvers of rival firms
Setting Objectives (task two)
objectives represent a managerial commitment to achieving particular results and outcomes by: Focusing organizational attention on what to accomplish Serving as yardsticks for tracking company performance motivating organizational members to perform at a high level and deliver the best possible results
Business Strategy
one for each business the company has diversified into how to strengthen market position and gain competitive advantage
vertically integrated firm
one that performs value chain activities along more than one stage of an industry's value chain
sustainable competitive advantage
one that persists and survives despite competitors trying to match or surpass the advantage
One option a company has for achieving competitive advantage is by out-managing rivals in
performing value chain activities more efficiently and cost effectively, thereby gaining a low-cost advantage over rivals
proactive responses in evolving strategy
planned initiatives to improve the company's financial performance and secure a competitive edge
Developing a strategic vision for a company entails
prescribing a strategic direction for the company to pursue in developing and strengthening its business-- a strategic vision lays out the company's strategic course in preparing for the future
the threat of new entrants
profits may be eroded by new competitors sources of entry barriers: 1. economies of scale 2. product differentiation 3. capital requirements 4. switching costs 5. access to distribution channels 6. cost disadvantages independent of scale
defensive strategies
purpose is to lower the risk of being attacked, weaken the impact of any attack that occurs, and influence challengers to aim their efforts at other rivals
Strategic Objectives
relate to target outcomes that indicate a company is strengthening its market standing, competitive position, and future business prospects
broad differentiation strategy
seeking to differentiate the company's product offering from rivals' with superior attributes that will appeal to a broad spectrum of buyers allow firms to: 1. command a premium price for its product 2. increase unit sales 3. gain buyer loyalty to its brand
blue-ocean strategy
seeks to gain a durable competitive advantage by abandoning efforts to defeat competitors in existing markets and inventing a new industry or distinctive market segment that renders existing competitors irrelevant and allows a company to create and capture new demand *provide a great opportunity in the short run, but don't guarantee long-term success unless the company can protect their market position*
Strategic Vision
sets forth a company's future direction (where we are going)
Business Model
sets forth how its strategy and operating approaches will create value for customers while at the same time generating ample revenues to cover costs and realize a profit
Strategy
specific market positioning, competitive moves, and business approaches that form management's answer to "What's our plan for running the company and producing good results?" represents managerial commitment to undertake one set of actions rather than another in an effort to compete successfully and achieve good performance outcomes consists of the competitive moves and business approaches that managers employ to attract and please customers, compete successfully, capitalize on opportunities to grow the business, respond to changing market conditions, conduct operations, and achieve the targeted financial and market performance
Performance targets
specific process and team performance targets for which staff are responsible for. they function as yardsticks for measuring how well the organization is doing.
low-cost provider strategy
striving to achieve lower overall costs than rivals on comparable products that attract a broad spectrum of buyers
the bargaining power of suppliers
suppliers threaten an industry by: 1. threatening to raise prices 2. threatening to reduce product quality a supplier group is POWERFUL when: 1. it has few competitors and is more concentrated than the industry it sells to 2. doesn't have to contend with substitute products for sale to the industry 3. industry isn't an important customer to the supplier group 4. supplier's product is a crucial input to the buyer's business 5. supplier's products are differentiated or has built up switching costs for buyer 6. poses a credible threat of forward integration (can directly distribute)
environmental scanning
surveillance of a firm's external environment to predict environmental changes and detect changes already under way it alerts the firm to critical trends before changes have developed a discernible pattern and before competitors recognize them
Business strategy, as distinct from corporate strategy, concerns
the actions and approaches being employed to produce successful performance in one specific line of business
Values or core values
the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and mission
merger
the combining of two or more firms into a single entity, with the newly created firm often taking on a new name
The customer value proposition portion of a company's business model concerns
the company's approach to satisfying buyer needs and requirements at a price they will consider a good value
What makes the marketplace a competitive battlefield is
the consistent jockeying of industry members to deploy whatever means in their business arsenals they believe will attract and retain buyers, strengthen their market positions, improve profitability, and ideally help them win a competitive edge over their rivals
environmental forecasting
the development of plausible projections about direction, scope, speed, and intensity of environmental change
vertical scope
the extent to which a firm's internal activities encompass one, some, many, or all of the activities that make up an industry's entire value chain system, ranging from production to final sales and service
The best test of whether potential entry is a strong or weak competitive force is whether
the industry's growth and profit prospects are strongly attractive to potential entry candidates
Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on
the price sensitivity of buyers, whether buyer switching costs are high or low, and how well informed buyers are about the product offerings of industry members
reactive responses in evolving strategy
unanticipated developments and fresh market conditions
Two useful for determining whether a company's customer value proposition, prices, and costs are competitive are
value chain analysis and benchmarking
Difference in vision and mission statement
vision: direction forward mission: who, what, why? Present not forward
Competitive Advantage
when an attractive number of buyers are drawn to purchase its products or services rather than those of competitors
Competence
when it gains the experience and know-how to perform an activity consistently well and at acceptable cost
Strategic Intent
when it relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective
Balanced Scorecard
widely used method for combining the use of both strategic and financial objectives, tracking their achievement, and giving management a more complete and balanced view of how well an organization is performing
Examples of Strategic Objectives
winning an x percent of market share achieving lower overall costs than rivals overtaking key competitors on product performance or quality customer service delivering x percent of revenues from the sale of new products introduced withing the past 5 years
