Chapter 10 - Strategic Planning - Management

Weaknesses and Threats (WT)

How can you minimize your weaknesses and avoid threats?

Strengths and Threats (ST)

How can you take advantage of your strengths to mitigate or avoid real and potential threats?

Weaknesses and Opportunities (WO)

How can you use your opportunities to overcome the weakness you are experiencing?

Strengths & Opportunities (SO)

How can you use your strengths to take advantage of opportunities?

Strengths

Internal resources that are available or things that an organization does well

Strategic Management Process

A nine-step process that involves strategic planning, implementation, and evaluation

Retrenchment Strategy

A strategy characteristic of a company that is reducing its size, usually in an environment of decline

Growth Strategy

A strategy in which an organization attempts to increase the level of its operations; can take the form of increasing sales revenue, number of employees, or market share

Stability Strategy

A strategy that is characterized by the absence of significant change

Core Competency

Any of the strengths that represent unique skills or resources that can determine the organization's competitive edge

SWOT Analysis

Assessment of an organization's strengths, weaknesses, opportunities, and threats in order to identify a viable strategy that the organization can pursue

Threats

Negative external environmental factors

Acquisition

Occurs when a larger company buys a smaller one and incorporates the acquired company's operations into its own

Merger

Occurs when two companies, usually of similar size, combine their resources to form a new company

Opportunities

Positive external environmental factors

Weakness

Resources that an organization lacks or important activities that it does not do well

Effectiveness

The degree to which manners attain organizational objectives

Efficiency

The degree to which organizational resources are utilized and contribute to productivity

Grand Strategies

The four primary types of strategies - growth, stability, retrenchment, and combination

Mission Statement

The purpose of an organization

Combination Strategy

The simultaneous pursuit by an organization of two or more of growth, stability, and retrenchment strategies