Jessica Chapter 1

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Porter's Five Generic Competitive Strategies​

1. Low-cost provider strategy​ (provide a product at a lower cost than a competitor) 2. Broad differentiation strategy​ (provide a unique or superior value to buyer) 3. Best-cost provider strategy​ (give more value for money) 4. Focused or market niche strategy based on lower cost​ (low-cost product to select group) 5. Focused or market niche strategy based on differentiation (very narrow market)

Bankruptcy

A formal procedure in which an appointed trustee in bankruptcy takes possession of a business's assets and disposes of them in an orderly fashion

Value Proposition

A statement of the fundamental benefits of the products or services being offered in the marketplace

Mission Statement

An articulation of the purpose of the organization and the value it creates for customers (the why/purpose)

Turnaround strategy (retrenchment strategy)

An attempt to increase the viability of an organization

Competitive Advantage : Capabilities

Collective skills, abilities, and expertise of an organization

Discarded Strategy

Deemed inappropriate due to changing circumstances

Vision Statement

Defines an organization's long term goals uniting the organization's efforts (horizon planning) (where are we going)

Status quo strategy

Do not wish to see their companies grow; content to keep market share; doing what it has been doing​

Hard Objectives/Goals

Goals that are an expression in measurable terms of what an organization intends to achieve; include numbers​

Soft Objectives/Goals

Goals that define the targets of social conduct for the organization and may not always be quantifiable - Unmeasurable​

Competitive Advantage : Intangible assets

Organizational assets that are not concrete, such as reputation, goodwill

Competitive Advantage : Tangible Assets

Organizational assets that have substance and can be consumed

Corporate Strategy

Organizational-level decisions that focus on long-term survival (MULTI-BUSINESS STRATEGY)

Business Strategy

Plans to build a competitive focus in one line of business

Errors in Strategic Planning

Relegating the process to official planners and not involving executives and managers​ Failing to use the plan as the guide to making decisions and evaluating performance​ ​Failing to align incentives and other HR policies to the achievement of strategy​

Core Competencies

Resources and capabilities become this when they serve as a source of a firm's competitive advantage

International Growth

Seeking new customers or markets by expanding internationally

Dynamic Capabilities

The ability to adapt and renew competencies in accordance with changing business environment

Values

The basic beliefs that govern individual and group behaviour in an organization (how must we behave)

Competitive Advantage

The characteristics of a firm that enable it to earn higher rates of profit than its competitors

Strategy Formulation

The entire process of conceptualizing the mission of an organization, identifying the strategy, and developing long-range performance goals​

Intended Strategy

The formulated plan

Realized Strategy

The implemented plan

Hurdle Rate

The percentage of return on investment necessary before a program is implemented

Emergent Strategy

The plan that changes incrementally due to environmental changes

strategy implementation (operational planning)

The process by which a strategy is put into action

Divestiture

The sale of a division or part of an organization

Program

The steps or activities necessary to accomplish a goal

Procedures

The steps required to get a job done

Liquidation

The termination of a business and the sale of its assets

Strategy Implementation

Those activities that employees and managers of an organization undertake to enact the strategic plan, to achieve the performance goals

Mergers

Two organizations combine resources and become one

Four Criteria of Sustained Competitive Advantage​

Valuable: Are the resources and capabilities able to help generate value/reduce cost?​ Rare: Are the resources and capabilities not available to competitors?​ Inimitable: Are the resources and capabilities hard to copy by competitors?​ Organized: Are the resources and capabilities able to be exploited by the firm?​

Harvest strategy

choose to milk the investment as current profitable situation will not last forever​

Do-nothing strategy

don't do anything different; make no changes​

Incremental Growth

expanding the client base, increasing the products or services, changing the distribution networks, or using technology.

Michael Porter

made a major contribution to the field of strategic management by grouping the ways organizations can compete into five generic competitive strategies​​

Pause and proceed with caution strategy

temporary strategy - until environmental conditions are more favourable for growth​

Acquisitions

the purchase of a company by another company

Benefits of Strategy Formulation​

​Clarity​, Coordination​, Efficiency​, Incentives, Change​, Career Development​


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