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)