SWOT/Planning/Strategies

Retrenchment Strategy

Turn around poor company performance (in a bad spot and this is trying to correct that) example: ConAgra (shrinking size, layoffs, closing stores) (corporate level strategy)

Purpose of SWOT

structured method of evaluating a business

Strategic Objective

the goal for the whole company (under a top manager)

5 Steps for making a plan

1. Set goals 2. Develop commitment 3. Develop effective action plans 4. Track progress towards goal achievement 5. Maintain flexibility

Industry Level Strategies

Adaptive strategy (Defender, Prospector, Reactor), Positioning strategy (Cost Leadership, Differentiation)

Coinstar Industry Level Strategy

Adaptive/Prospector (invented new ideas for vending machines)

Recovery Strategy

After retrenchment, this is to get back to growth (like pruning a plant: retrenchment is cutting the bad parts back and it allows for healthy new growth) (corporate level strategy)

First Level Strategies

Attack Strategy, Response Strategy, Direct Competition

First Level Managers Planning Responsibilities

Carry out tactical plan(s) and create a budget (how to best allocate a specific budget to best accomplish the company's goals)

Walmart Industry Level Strategy

Cost Leadership (out perform competitors with its low prices)

Positioning Strategies

Cost Leadership, Differentiation (all are industry level strategies)

Adaptive Strategies

Defender, Prospector, Reactor (all are industry level strategies)

Top Managers Planning Responsibilities

Develop LONG TERM plans for the company

Theo Chocolate's Positioning Strategy

Differentiation (sells unique chocolates rather than cheap chocolates)

Growth Strategy

Growing the company- increase profits, increase number of stores example: Google buying out Motorola (corporate level strategy)

Google Corporate Level Strategy

Growth (when they purchased Motorola)

Corporate Level Strategies

Growth Strategy, Stability Strategy, Retrenchment Strategy, Recovery Strategy

Disadvantages of planning

Impedes change, Slows adaptation, Creates a false sense of security

Defender

Limited number of products and focused on maintaining customers rather than trying to seek tons of growth (industry level and adaptive)

Stability Strategy

Maintaining/Meeting the status quo, improve how it sells products/services, selling same products/services to same customers (corporate level strategy)

Advantages of planning

Persistence, Direction, Common goal

Uses of a Business Plan

Prepare to start a business, Attract investors, Prevent business failure, Predict business success

3M Industry Level Strategy

Prospector (made completely new products)

Reactor

Respond to changes after they occur, copy others (knock offs) (industry level and adaptive)

ConAgra Corporate Level Strategy

Retrenchment (when it wasn't performing well)

Prospector

Seeking fast growth by entering new markets/making new products example: 3M making post-its (industry level and adaptive)

Differentiation

Sells a unique product (at a higher price) example: Mercedes (industry level and positioning)

Cost Leadership

Sells products at a lower price than others example: Walmart (industry level and positioning)

SWOT stands for...

Strength, Weakness, Opportunities, Threats

Middle Managers Planning Responsibilities

To create tactical plans to meet the strategic objective(s)

Purpose Statement

a company's purpose or reason for existing (under a top manager)

Attack Strategy

a competitive move designed to reduce a rival's market share or profits example: Amazon Kindle versus Barnes and Noble reading tablet (first level strategy)

Business Plan is...

a formal document of business goals, reasons they are attainable and plans for achieving them (Simplified: an outline of what a business is going to do and how it will work)

Direct Competition

a rivalry between two companies that sell similar goods and act/react to each other's strategic actions example: McDonalds and Burger King (first level strategy)

Response Strategy

countermove to a rival's attack/increase your own market shares/profits example: self promoting (first level strategy)

Tactical Plan

how the company will use resources, budgets, and people to carry out a goal (under a middle manager)