Management Exam 1

three tests of winning strategy

-strategic fit -competitve advantage -performance

companies vision statement shortcomings

-vague or incomplete -not looking forward -bland -not distinctive -reliant on superlatives

companies strategy formulations are.

1. vision, mission, core values 2. setting objectives 3. crafting companies strrategy 4. executing the strategy 5. evaluating performance/adjustment

Managerially Valuable Objectives have..

Are well-stated (clearly worded) Are challenging, yet achievable Are quantifiable (measurable) Contain a specific deadline for achievement S.M.A.R.T. Objectives

why a well communicated vision statement matters..

Crystallizes leadership's views about the firm's long-term direction Reduces risk of 'rudderless' decision making by management at all levels Tool for winning the support of employees Provides direction for lower-level managers in forming departmental missions It helps an organization prepare for the future

buisness model framework

Customer Value Proposition How the firm will satisfy buyer wants and needs at a price buyer considers a good value Profit Formula Firm's approach to determining a cost structure that will allow for acceptable profits given the pricing tied to its customer value proposition Per Unit Cost The lower the cost greater the opportunity to make profit

Communicate management's targets for financial performance Ex. revenue growth, profitability, and return on investment

financial objectives

strategy is choosing

how

financial objectives are..

lagging indicators

strategic objectives are

leading indicators

Are targets to be achieved within 3 to 5 years

long term objectives

Strategy 5 stages

-Developing Vision & Mission Statements -Setting Objectives -Crafting Strategy Plan -Implementing the Strategy -Evaluate Performance & Adjust

the strategy making heirchy

-coroporate strategy -buisness strategy -functional strategy -operating strategy

Companies vision statement is effectively worded when.

-graphically -directional-looking forward -focused -flexible -feasible -easy to communicate

Why Companies need a Distinctive Strategy to...

Compete successfully Manage its business operations Strengthen prospects for long-term success

All Organizational Levels

Corporate Level General Motors Business Unit Level GMC / Chevrolet / Cadillac / Buick Functional Area Marketing / Sales / Finance / Manufacturing etc. Individual Work Group Insights Team / Product Mktg Team / Customer Mktg Team / Promotions Team

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.

companies values

Company's Business Strategy...

Explains why the company matters in the marketplace Specifies an approach to creating superior value for customers Determines how capabilities and resources will be utilized to deliver the desired value to customers

Strategies evolve...

Incrementally or dramatically Proactively and reactively

The distinctive set of creative strategic elements that...

Sets it apart from its rivals Produces its competitive edge

Doesn't say anything specific about the company's strategic course beyond distinctions as being a recognized leader, a global or worldwide leader, or the first choice of customers.

Too reliant on superlatives

Companies vision statement

Top management's view of "where we are going" States how the company's leaders intend to position the firm for the future The Why and How Distinct and specific to a particular organization

establishes an overall game plan for managing a set of businesses in a diversified, multi-business company

corporate strategy

Why strategy changes over time...

Unexpected moves of competitors Shifts in buyer needs and preferences Emerging market opportunities New ideas by managers to improve the strategy Evidence the strategy is not working well

Firm's mission statement is sufficiently descriptive to:

Who we are and What we do Identify company's products or services Specify buyer needs it seeks to satisfy Specify customer groups it is endeavoring to serve Specify its approach to pleasing customers Give company its own identity

is a 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.

balanced scorecard

Management's blueprint for delivering a valuable product (service) to customers in a manner that will yield an attractive profit

buisness model

is primarily concerned with strengthening the company's market position and building competitive advantage in a single business company or a single business unit of a diversified multi-business corporation

buisness strategy

A "balanced scorecard" that includes both strategic and financial performance targetsis a conceptually strong approach for judging a company's overall performance because A.it assists managers in putting roughly equal emphasis on short-term and long-term performance targets. B.it entails putting equal emphasis on good strategy execution and good business modelexecution. C.a balanced scorecard approach pushes managers to avoid setting objectives that reflect theresults of past decisions and organizational activities. D.financial performance measures are lagging indicators that reflect the results of pastdecisions and organizational activities whereas strategic performance measures are leadingindicators of a company's future financial performance.

d

A balanced scorecard for measuring company performance A.entails putting equal emphasis on financial and strategic objectives. B.entails putting balanced emphasis on profit and non-profit objectives. C.prevents the drive for achieving financial objectives from overwhelming the pursuit of strategic objectives. D.prevents the drive for achieving strategic objectives from overwhelming the pursuit of financial objectives. E.entails creating a set of objectives that is "balanced" in the sense of including both financial and strategic objectives

e

conveys a company's purpose in language specific enough to give the company its own identity.

mission statement

A firm's vision, objectives, strategy, and approach to strategy execution

never final

Once the Vision and Mission Statements are set a Firm creates their

objectives

Organization's performance targets—the results management wants to achieve

objectives

Objectives - Purpose Convert the strategic vision into clear _____

performance targets

what is not good and should be in mission statement?

profit

is a combination deliberate planned elements and unplanned emergent elements.

realized strategy

Are targets to be achieved soon Represent milestones or stair steps for reaching long-range performance

short term objectives

occurs when significant changes in an industry require that management evaluate the risks of changing the company's future direction vs. staying the course

strategic inflection point

Related to a firm's marketing standing and competitive vitality

strategic objectives

when a large number of buyers develop a durable preference for its products over the offerings of competitors, despite the efforts of competitors to overcome or erode its advantage

sustainable competitve advantage

Strategic Vision vs. Mission Statement

vision-future mission-present