Management Chapter 6 (Connect and Notes)

5 Steps in Strategic Management Process

1. Establish mission and vision 2. Assess current reality 3. Formulate grand strategy 4. Implement Strategy 5. Maintain strategic control ; think MAFIM

3 Core Processess

1. People: Consider who will benefit you in the future 2. Strategy: Consider how to accomplish success 3. Operations: Consider what path will be followed; THINK SPO

Porter's 4 Competitive Strategies

1. cost leadership 2. differentiation 3. cost focus 4. focused differentiation

To Maintain strategic control one should:

1. engage people 2. keep it simple 3. stay focused 4. keep moving

Porters Model for Industry Analysis (5 competitive forces)

1. threats of new entrants 2. bargaining power of suppliers 3. bargaining power of buyers 4. threats of substitute products/services 5. rivalry among competitors; think TSBTC

SWOT

AKA situational analysis; strengths, weaknesses, opportunities, and threats

Strategic Positioning

Achieve sustainable competitive advantage by preserving what is distinctive about a company

Strategy Formulation (step 3)

Choosing among different strategies and altering them to best fit the organization's needs

Benchmarking

Comparing your performance to high performing organizations

Contingency Planning

Creating alternative hypothetical but equally likely future conditions

BCG Matrix

Evaluating strategic business units based on their business growth rates and their market share

Competitive Intelligence

Gaining info about the competitor's activities so you can anticipate their moves and react appropriately

Growth Strategy

Grand strategy involving expansion; revenue, market share, number of employees etc

Stability Strategy

Grand strategy involving little or no significant change

Defensive Strategy

Grand strategy involving reduction in the organization's efforts

BCG Star

High Growth and High Market Share

BCG Question Marks

High growth, low market share some stars some dogs

Grand Strategy (step 3)

How the mission is to be accomplished; growth, stability, and defensive are 3 types

Trend Analysis

Hypothetical extensions of a past series of events into the future

BCG Dogs

Low growth, low market share

Single Product Strategy

Makes and sells only one product within its market

Mission vs Vision

Mission is reason for being, vision is what we want to become

Environmental Scanning

Monitoring an organization's interanl and external environments to detect early signs of opportunities and threates

Strategic Control (step 5)

Monitoring the execution of strategy and making adjustments if necessary

Differentiation Strategy

Offer products or services of a unique and superior value compared to competitors, large target market

Focused Differentiation Strategy

Offer products or services that are of unique and superior value in a NARROW market; FOCUS=NARROW

Diversification

Operating several businesses in order to spread the risk

Related Diversification

Operating several businesses under one ownership that are RELATED to each other Offers reduced risk, management efficiency, and synergy (sum>parts)

Unrelated Diversification

Operating several businesses under one ownership that are UNRELATED to eachother

Strategy Implementation (step 4)

Putting strategic plans into effect

BCG Cash Cows

Slow Growth but high market share

Strategy can fill these three areas

few needs, many customers broad needs, few customers broad needs, many customers

Cost Focus Strategy

keep costs and prices below competitors in a NARROW target market

Cost Leadership Strategy

keep costs and prices of a product below competitors in LARGE market