Chapter 1 Strategic Management Flashcards
5 management tasks
Strategic Analysis Innovation Multiple business-strategies and issues Creating sustainable competitive advantages Developing growth platforms
What is a business stategy?
The product-market investment strategy
Customer value proposition - value of brands
Assets and competencies
Functional strategies and programs
Where to compete
The product-market investment decision
A business strategy
How to compete Value proposition Assets and competencies Function area strategies and programs
Product-market investment strategy alternatives
Invest to grow
Invest only to maintain the existing position
Milk the business by minimizing the investment (non-profitable part)
Recover as many of the assets as possible by liquidating or divesting the business
Product-market growth directions
Present Markets Market Product
Penetration Expansion
New Markets Market Diversification
Expansion
Market Penetration
An attempt to enter a new market
Sell more of the same things to the same market
Example - Reducing prices lower than competitors to attract market
Nike endorsing athletes targeting people with active lifestyle
Product Expansion
Selling a new product to the same people
Apple - starting with computers, expands to phones and tablets
Market Expansion
Selling the same product to different people
Diversification
Selling a completely different product to a unknown market
Customer value proposition
Perceived benefit to customer
- function
- emotional
- social
- self-expressive
Assets and competencies
Strategic Competencies
- what a business does exceptionally well
- has strategic importance to the business
- based on knowledge or a process
Strategic Assets
- a resource
Functional Strategic Programs (11)
Manufacturing strategy Distribution strategy Brand-building strategy Communication strategy Information technology strategy Sourcing strategy Global strategy Logistical strategy Quality strategy Customer relationship strategy Social technology strategy
How to select business strategies
Is ROI attractive
Is there sustainable competitive advantages
Will strategy have success in the future
Is the strategy feasible
Does the strategy fit with the other strategies of the firm
External analysis
Consumer analysis
Competitor analysis
Market/sub market analysis
Environment analysis
Internal analysis
Performance analysis
Determinants of strategic options
Why strategic market management
Precipitate the consideration of strategic choices
Help a business cope with change
Force a long-range view
Make visible the resource allocation decisions
Aid strategic management and control system
Provide both horizontal and vertical communication and coordination systems
