Ch. 5

Which of the following factors should be classified as a weakness for the team?

The cubs' current right-fielder, while defensively sound, has struggled at the plate for the last two seasons.

Diversification

strategy of moving into new lines of business

Management by means (MBM)

focuses people on the methods and processes used to attain results, rather than on the results themselves

Top management develops ________ to define the resources the organization as a whole will use to move toward its desired future state.

strategic plans

Focus strategy

managers use either a differentiation or a cost leadership approach, but they concentrate on a specific regional market or buyer group

Decentralized planning

means that top executives or planning experts work with managers in major divisions or departments to develop their own goals and plans

Tactical goals

the outcomes that major divisions and departments must achieve for the organization to reach its overall goals

Strategy

the plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining goals

Strategic management

the set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals

Strategic goals

set by and for top management and focus on objectives for the organization as a whole

What is prevention in a crisis plan?

-Build relationships -Detect signals from the environment

As a manger, you have been asked to work with your employees to develop goals. What can you expect from this process?

-A benefit of goals is that they help motivate employees -The advantages of setting goals and making plans always outweigh the disadvantages for every organization in any environment.

Limitations of planning

-Goals and plans can create a false sense of certainty -Goals and plans may cause rigidity in a turbulent environment -Goals and plans can get in the way of intuition and creativity

What is an example of a goal?

Any veteran that asks me for a dog will have one within one month of the request.

Dave and Betsy have run Kozy Korner for many years, and from that experience they feel knowledgeable about the most likely threats to the business. However, experience has also taught them that completely unexpected events can happen. How can they prepare for the unexpected?

Engage in scenario building to brainstorm all possible disruptive events.

Strategic thinking

Take the long-term view and to see the big picture, including the organization and the competitive environment, and consider how they fit together.

Companies that use a focus strategy have narrow buyer groups.

True

Plan

a blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks, and other actions

Goal

a desired future state that the organization attempts to realize

SWOT analysis

a planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats

low market growth, high market share

cash cow Milk to finance question marks and stars

Scenario building

managers look at trends and discontinuities and imagine possible alternative futures to build a framework within which unexpected future events can be managed

low market share and high market growth

question marks New ventures, risky-a few become stars, others are divested

Stretch goals

reasonable yet highly ambitious and compelling goals that energize people and inspire excellence

Core competence

something that the organization does particularly well in comparison to others

high market share and high market growth

star Rapid growth and expansion

Making decisions and taking actions to achieve a superior fit between the organization and its environment is ____________.

strategic management

What is preparation in a crisis plan?

-Designate crisis management team and spokesperson -Create detailed crisis management plan -Set up effective communication system

As the Board of Governors of the American Red Cross considers planning, one option is to make strategic plans and then direct managers to align tactical and operational plans accordingly. Another option is to have planning specialists help managers across the organization make their own plans. Why might this organization's executives opt for the latter approach?

-When Managers come up with their own plans, they are likely to be more committed to following through on them. -Senior leadership will have more control over the organization's direction. -The environment is a dynamic one, and department and frontline managers can come up with more responsive leadership. -Resources will be better coordinated across the organization in support of the overall strategy.

Benefits of planning

-provide a source of motivation and commitment -guide resource allocation -guide to action -set a standard of performance

What is the planing process?

1. Develop the Plan 2. Translate the Plans 3. Plan Operation 4. Performance Management Use 5. Monitor and Learn

What are the levels of Goals and Plans?

1. Mission Statement 2.Strategic Goals/Plans (Senior Management) 3. Tactical Goals/Plans (Middle Management) 4. Operational Goals/Plans (Lower Management)

Steps of the MBO process

1. Set goals 2. Develop action plan 3. Review progress 4. Appraise overall performance

What are the criteria for effective goals?

1. Specific and measurable 2. Have a defined time period 3. Cover key result areas 4. Challenging but realistic 5. Linked to rewards

Mission statement

A broadly stated definition of the organization's basic business scope and operations that distinguishes it from similar types of organizations.

Cost leadership characteristics from Porter's competitive strategies

Broad, Low cost -Strong central authority; tight cost controls -Maintains standard operating procedures -Easy-to-use manufacturing technologies -Highly efficient procurement and distribution systems -Clost supervision; finite employee empowerment

What are Porter's Five Forces?

Buyer power Supplier power Threat of substitute products or services Threat of new entrants Rivalry among existing competitors

Drybar, which started in Brentwood, California, in 2010, is a hair salon catering entirely to people with curly or frizzy hair who want their hair straightened. No cuts, perms, or coloring happen here. The store now has over 40 locations.

Example of target customers

Businesses that do not adopt a differentiation, low-cost leadership, or focus strategy tend to be more successful than businesses that do adopt these strategies.

False

The ability of employees to create innovative products is critical for companies that adopt a low-cost leadership strategy.

False

What is an example of a plan?

I can get dogs from the pound. There are so many abandoned animals, it will be quicker, less expensive, and easier than trying to get dogs from breeders.

Management by Objectives (MBO)

Managers and employers define goals for every department, project, and person and use them to monitor subsequent performance.

Focused Differentiation characteristics from Porter's competitive strategies

Narrow, Distinctiveness -Uses characteristics of differentiation strategy directed at particular target customer -Values flexibility and customer intimacy -Pushes empowerment to employees with customer contact

Focused cost leadership characteristics from Porter's competitive strategies

Narrow, Low costs -Uses characteristics of cost leadership strategy directed at particular target customer -Frequent detailed control reports -Measures cost of providing product or service and maintaining customer loyalty.

Competitive advantages

Refers to what sets the organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the marketplace.

Key performance indicators (KPIs)

assess what is important to the organization and how well the organization is progressing toward attaining its strategic goal, so that managers can establish lower-level goals that drive performance toward the overall strategic objective.

BCG matrix

organizes businesses along two dimensions - business growth rate and market share

By acquiring a technology company that develops smartphone apps, a video-streaming business hopes to achieve __________, combining its video rights with mobile technology to increase profits.

synergy

What are the essential stages of crisis planning?

prevention and preparation

Applewood Seed Co. of Colorado has fifty years of experience growing and supplying native wildflowers, grasses, and herbs to seed distributors, landscapers, golf courses, state highway departments, parks departments, government agencies, garden centers, mining companies, hydroseeders, and reclamation companies. Applewood has both an in-depth horticultural knowledge of native plants and the ability to supply in bulk.

Example of exploit core competencies

Strategy Execution

the stage of strategic management that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomes

Differentiation characteristics from Porter's competitive strategies

Broad, Distinctiveness -Acts in a flexible, loosely knit way; strong coordination among departments -Strong capability in basic research -Creative flair, thinks "out of the box" -strong marketing abilities -Rewards employee innovation -Corporate reputation for quality or technological leadership

What is a crisis management plan (CMP)

Detailed written plan that specifies the steps to be taken, and by whom, if a crisis occurs.

nonprofit firms

Pertains to events in the external environment

A ______ specifies the way in which an outcome will be achieved and can include the actions to be taken, the resources to be used, and the time frame for accomplishment.

Plan

Planning

The management function concerned with defining goals for future performance and how to attain them.

Strategic goals (official goals)

broad statements describing where the organization wants to be in the future

Coalitional Management

building an alliance of people who support a manager's goals and can influence other people to accept and work toward them

Profit firms

competitive actions in the marketplace

When referring to a SWOT analysis, the letter W stands for _____________, and it refers to factors that ___________ to the organization.

Weaknesses; internal

When does synergy occur?

When an organization parts interact to produce a joint effect that is greater than the sum of the parts acting alone.

Operational goals

results expected from departments, work groups, and individuals

During ____________, managers determine the organization's goals and develop a specific strategic plan.

strategy formulation

When conducting a SWOT analysis, information about turnover, profit margins, and staff quality can be used to identify:

Company strengths and weaknesses

Tactical plans

designed to help execute major strategic plans and to accomplish a specific part of the company's strategy

low market growth, low market share

dog No investment. Keep if some profit. Consider divestment

At MultiMarkets, a chain of retail stores, top management decided to respond to the growing challenge of online retail websites with ___________, using planning experts to help store managers develop their own plans.

Decentralized planning

Contingency plans

Defines a range of alternative responses to be taken in the case of emergencies, setbacks, or unexpected conditions.

A financial advisor hosts a blog where he invites other personal finance experts to guest-blog on everything from real estate to estate taxes to tax write-offs. The variety of advice increases the site's search engine optimization (SEO) and attracts many more potential clients for all the participating financial professionals.

Example of Build synergy

Considering all of the factors listed in the preceding SWOT analysis question, which of the following strategies would make the most sense for the Cubs in the upcoming season?

Sign a free-agent outfielder to bolster the current roster and sign the current pitchers to long-term contracts.

differentiation strategy

A strategy an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions.

Cost leadership strategy

A strategy with which managers aggressively seek efficient facilities, cut costs, and use tight cost controls to be more efficient than others in the industry.

Mission

The organization's reason for existence.

Snapchat market itself to women below the age of 25 (18-24), most of which are still in high school and college. This helps snapchat create a competitive advantage by ______________.

targeting customers

Strategic plans

the action steps by which an organization intends to attain strategic goals