management and production chapter 5

examples of planning and providing direction and momentum

-amazon.com to borders bookstores -uber to taxicabs -blogs and internet news to newspapers (took away paper audience) -what microbreweries have been to Anheuser-Busch (people want a small town beer experience, so busch has bought up a lot of local places to keep up)

what are the 4 areas that you maintain as a result of having sustainable competitive advantage

1) in being responsive to customers 2) in innovating 3)in quality 4) in effectiveness

what are the 3 key principles underlying strategic positioning

1) strategy is the creation of a UNIQUE and VALUABLE position -few needs, many customers -broad needs, few customers -broad needs, many customers 2) strategy requires trade-offs in competing 3) strategy involves creating a "fit" among activities

porter contends that business-level strategies originate in the five primary competitive forces in the firm's environment:

1) threat of new entrants 2) bargaining power of suppliers 3) bargaining power of buyers 4) threat of substitute products or services 5) rivalry among competitors

for MBO goal-setting to be successful, what 3 things have to happen

1)Top management must be committed to it. 2)Goals must be applied organization-wide. 3)Goals must "cascade"—be linked consistently down through the organization.

steps of planning and strategic management

1)establish the mission and vision and values (make a mission statement) 2)assess the current reality (ex access to resources. assess your environment) 3) format the grand strategy and strategic, tactical and operational plans ("in the long run, this is what I want the co. to be, and here are the short term ways I can achieve this") 4)implement the strategy 5)maintain strategic control (monitoring. look at success and failures against your plans and goals and adjust)

planning and strategic management are important for three reasons: 1) providing direction and _______________ 2) encouraging ______ _________ 3) developing a sustainable __________ _____________

1)momentum 2)new ideas 3)competitive advantage

smart goals are what 5 things

1)specific 2)measurable 3)attainable 4)results oriented 5)target dates

what are 3 parts to a means-end chain

1)strategic goal-ex increase rev from new customers by 10% over the next 12 months 2) operational goal. :ex. introduce two new product offerings over the next 12 months 3)action plan- a way to step by step incorporate the operational goal into your day to day activities. see ppt for example

three types of planning and what three levels of management go with each

1)strategic planning-top managers (1-5 years) 2)tactical planning-middle managers (6-24 months) 3)operational planning-first line management (1-52 weeks)

Stars, question marks, cash cows, and dogs make up what

BCG Matrix

these four steps make up what process 1)Managers and employees jointly set objectives for the employee. 2)Managers develop action plans. 3)Managers and employees periodically review the employee's performance. 4)Managers make a performance appraisal and reward the employee according to results.

Management by Objectives (MBO)

who contends that business-level strategies originate in the five primary competitive forces in the firm's environment

Porter

a framework for analyzing a resource or capability to determine its competitive strategic potential by answering four questions about its Value, Rarity, Imitability, and Organization

VRIO

defines the course of action (the tactics) needed to achieve a stated goal; contains a projected date for completing the desired activities for each tactic

action plan

what product is a good example of the planning/control cycle

apple watch

look at where the organization stands internally and externally to determine what is working and what is not; see what can be changed

assessing the current reality

one key step in strategic planning is what

assessing the current reality

a company creates a new, uncontested market space that makes competitors irrelevant, creates new consumer value, and decreases costs

blue ocean strategy ex. netflix

"competing in overcrowded industries is no way to sustain high performance. The real opportunity is to create ________ __________ of uncontested market space

blue oceans ex netflix created a market of online streaming that had never been made before

ex of a business model

bricks and clicks (walmart)

outlines the need the firm will fill, the operations of the business, its components and functions, as well as the expected revenues and expenses

business model (examples on SBA website)

a document that outlines a proposed firm's goals, the strategy for achieving them, and the standards for measuring success

business plan

this sector of the BCG matrix has slow growth but high market share-income finances stars and question marks

cash cows (you want to take money from this sector and invest in stars)

the ability of an organization to produce goods or services more effectively than its competitors do, thereby outperforming them

competitive advantage

gaining info about one's competitors; activities so that you can anticipate their moves and react appropriately; sources of info include public print and ads, investor info and informal sources

competitive intelligence

creation of alternative hypothetical but equally likely future conditions; also called scenario planning and scenario analysis

contingency planning

keep the costs and prices of a product or service below those of competitors and target wide market

cost leadership strategy

what are porter's four competitive strategies

cost leadership strategy cost focus strategy differentiation strategy focused-differentiation strategy

the company's CEO puts pressure on the firm's R&D managers to develop products that can be created cheaply. the firm would be following a

cost leadership strategy (would be cost focused if it was focused on one area)

keep the costs of a product below those of competitors and target a narrow market

cost-focus strategy

involves reduction in the organization's efforts; retrenchment

defensive

offers products that are of unique and superior value compared to those of competitors but to target a wide market

differentiation strategy

_____________ and ____________ are important because unless a plan is in place managers may focus on just whatever is in front of them, just "putting out fires"; managers might be so preoccupied with day to day pressures that their organizations can lose their drive

direction and momentum

operating several businesses in order to spread the risk; products may be related or unrelated

diversification

this sector of the BCG matrix is when you have low growth, low market share-should be gotten rid of

dogs

monitoring of an organization's internal and external environments to detect early signs of opportunities and threats that may influence the firm's plans

environmental scnaning

strategic plans represent an ___________ __________ about what must be done

estimated guess

a vision or projection of the future

forecasting

a specific commitment to achieve a measurable result within a stated period of time

goals

comes after assessing the current reality; explains how the organization's mission is to be accomplished

grand strategy

involves expansion, as in sales rev, market share, number of employees, or number of customer

growth strategy

what are 3 common grand strategies

growth, stability, defensive

when analyzing the W in SWOT analysis, Roberta the manager might be assessing a)possible challenges in the market b)competitors actions c)high turnover employees d)good financial resources of the firm

high turnover employees

if you have a high goal, is your performance higher or lower than if you set an easy goal?

higher

what are the three types of objectives used in MBO

improvement personal development maintenance

in this objective used in MBO, the purpose is to express performance to be accomplished in a specific way for a specific area

improvement objectives

SWOT, process of scanning stands for what

internal Strengths internal Weaknesses external Opportunities external Threats

generally referred to as strategic goals. tend to span 1-5 years and focus on achieving the strategies identified in a company's strategic plan

long term goals

in this objective used in MBO, the purpose is to express the intention to maintain performance at previously established levels

maintenance objectives

what is the planning/control cycle

make the plan carry out the plan control the direction by comparing the results with the plan control the direction in two ways: -correcting deviations in the plan being carried out -by improving future plans

"what is our reason for being?"

mission statement

everything you do as a company should reflect your

mission statement

what are the fundamentals of planning

mission statement-->vision statement--> values statement-->strategic planning--> tactical planning-->operational planning

a plan that breaks long term output into short term targets or goals

operating plan

turns strategic plans into actionable short-term goals and action plans

operating plans

done by first line managers for the next 1-52 weeks, goals and action plans for the daily aspects

operational planning

consider what path will be followed

operations

with swot analysis, what are your external parts

opportunities and threats

consider who will benefit you in the future

people

what are the three core processes of business

people strategy operations

in this objective used in MBO, the purpose is to express personal goals to be realized

personal development objectives

coping with uncertainty

planning

setting goals and deciding how to achieve them; coping with uncertainty by formulating future courses of action to achieve specified results; a document that outlines how goals are going to be met; can also be preventative

planning (has 3 definitions)

3 types of standing plans

policies, procedures, rules

outlines general réponse to a designated problem or situation

policy

outlines response to particular problems or circumstances

procedure

encompasses a range of projects or activities

program

2 types of single-use plans

programs and projects

in the BCG matrix, this sector is risky new ventures-some will become stars, some dogs

question marks

what are two types of diversification

related and unrelated. related is like Disney who buys up a bunch of companies related to their own, such as buying comic companies and storytelling. unrelated means you have a bunch of random companies that you buy in case your original purpose fails you still have other types of business in your portfolio

designates specific required action

rule

you usually have one strategic goal and _________ operational goals

several

sometimes referred to as tactical or operational goals, or just goals. generally span 12 months or less and connected to strategic goals in a hierarchy known as a MEANS END CHAIN

short term goals

company makes and sells only one product within its market; benefit is that a company can focus on just one product

single-product strategy

for activities not likely to be repeated in the future

single-use plan

involves little or no significant change

stability

for activities that occur repeatedly over a period of time

standing plan

in the BCG matrix, this sector has high growth, high market share-definite keepers

stars

a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals

strategic management

Done by top managers for the next 1-5 years, goals and action plans

strategic planning

danny is participating with other managers in a discussion about what his organization's goals should be for the next decade. he is participating in a)strategic planning b) operational planning c)tactical planning d)

strategic planning

developed by famous strategist Michael Porter; attempts to achieve sustainable competitive advantage by preserving what is distinctive

strategic positioning

consider how success will be accomplished

strategy

management scholar Gary Hamel says that companies such as Apple have been successful because they have been able to unleash the spirit of ___________ ______________

strategy innovation

the ability to reinvent the basis of competition within existing industries; boldness business models that put incumbents on the defensive

strategy innovation

a LARGE SCALE action plan that sets the long term goals and direction for an organization; deals w LONG TERM

strategy or strategic plan

with swot analysis, what are your internal parts

strengths and weaknesses

occurs when an organization is able to get and stay ahead in four areas

sustainable competitive advantage

done by middle managers for the next 6-24 months, goals and action plans

tactical planning

Apple has fired employees who have leaked news about unannounced products. Which step of the planning and controlling process is this? a.Make the plan. b.Carry out the plan. c.Take corrective action. d.Document the plan.

take corrective action

melissa wants her employee, ralph, to turn in his monthly sales report by the 5th of every month. this meets the _________________ requirement of SMART goals a)specific b)measurable c)attainable d)target dates

target dates

hypothetical extension of a past series of events into the future

trend analysis

to have sustainable competitive advantage, you have to be able to take advantage of the resource or product that you have.

true

"What values do we want to emphasize?" what the company stands for; its core priorities, the values its employees embody

values statement

firm expands into businesses that provide the supplies it needs to make its products or that distribute and sell its products

vertical integration

"what do we want to become?" clear sense of the future and actions needed to get there

vision statement

what is a risk of single-product strategy

vulnerability; a competitor could creep into the market and you don't have a way to fend them off bc you have one product and they may have more money. or, ****the product isn't trending anymore and consumer demand changes****