- corporate - business division - functional

- help define market - expands across industries ex. PMG, Samsung, General Electric

- how we navigate the market - 1 industry (industry specific)

- how operationalize - within organization - ex. HR

- bought high end brand - strategic alliance with other company - 1966 customers more choice - differentiation: customer service ex. geek squad, online development

1949 started 1970s enjoyed status quo - cost strategy laid off most experienced employees - sold products at discounts - employees not trained

- outskirts of land b/c its cheaper - by pass traffic (big volumes) - Functional Strategy: makes different what they do - Same business strategy;; operationally different btw Circuit City - needs to increase operations research one to first to start JIT - invested a lot; negotiate; distribution cost how to make things go down

- cut costs by giving discounts - more customers bargaining with suppliers - no electronic system of what is selling

Ch 7 Flashcards by Kelsi Snyder

Strategy

describes “how” organizational goals are to be achieved. it refers to the method or plan of action that describes resource allocation and activities for attaining goals

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Strategic Management

process of formulating and implementing strategies that will help the organization exploit its core competencies, build synergies, and deliver value to gain sustainable competitive advantage

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Nepolian

great strategist
win battles with less supplies
1805 fighting Russian enemy 
created strategy forced enemy to spread out
kept reserve back

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Want 2 things out of Strategy

use limited RESOURCES to have

the maximum IMPACT

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Impact

competitive advantage

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Competitive advantage

core competencies
synergy
value

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Core Competitencies

identify strengths

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Synergy

bring together skills; avoid duplication more efficient; utilize resources in best possible manner; use other facilities and build on eachother

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Value

how we deliver profits

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Levels of Strategy

corporate
business division
functional

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Corporate

help define market
expands across industries
ex. PMG, Samsung, General Electric

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Business Divison

how we navigate the market

- 1 industry (industry specific)

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Functional

how operationalize
within organization
ex. HR

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Focus Cost

small market; ex. jumping beans sells kids clothes

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Differential Focus

trendy clothes for kids

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Best Buy

bought high end brand
strategic alliance with other company
1966 customers more choice
differentiation: customer service ex. geek squad, online development

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Corporate strategies

-sets long-term direction for the total enterprise
grow-utilizes alliances
joint venture
-growth (multiple industries; Samsung)
-retrenchment (cut down on business)
-international (global)
-cooperation (joint-venture; strategic alliances)–get together with other company

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Business or Competitive Strategies

-identifies how a division or strategic business unit will compete in its product or service domain
-Target Scope vs Advantage Low Cost Prod . Uniqueness
-Broad (Industry Wide) Cost Leadership Strategy . …………………………………………………………………Differentiation Strategy
-Narrow (Market Segment) Focus Strategy (low cost) ……………………………………………………………..Focus Strategy
………………………………………………………………….(differentiation)

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Functional Strategies

guides activities within on specific area of operations

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Circuit City

1949 started 1970s enjoyed status quo

cost strategy laid off most experienced employees
sold products at discounts
employees not trained

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Wal-Mart

outskirts of land b/c its cheaper
by pass traffic (big volumes)
Functional Strategy: makes different what they do
Same business strategy;; operationally different btw Circuit City
needs to increase operations research one to first to start JIT
invested a lot; negotiate; distribution cost how to make things go down

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Kmart

cut costs by giving discounts
more customers bargaining with suppliers
no electronic system of what is selling

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How do Firms make strategic choices to gain competitive advantage?

the strategic management process

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Strategic Management Process

1) strategic analysis
2) Strategy formulation
3) strategy implementation

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Strategic Analysis

First, Analyze mission, vision, and goals | Next, Analyze internal and external environment--what do customers want?

Mission

- WHO we are? - fundamental purpose - company philosophy - company identity

Vision

- WHERE we want to be? - long term view - what we want to achieve? - direction and aspiration

Goals

- WHAT specifically we need to achieve? - SMART goals - -continually resetting

SWOT Analysis

internal and external - External: Opportunities; threats - Internal: strengths; weaknesses

BCG (Boston Consulting Group)

- internal (portfolio) | - ?; *; dogs, $ cows

Porter's 5-Forces Model

- Potential new entrants - Suppliers - Customers - Substitute products - Competition

Strategy Implementation

implementation--> control

Implementation

- operational plans - assign responsibilities - decide reward structures - allocate resources - decide time line - fit organizational structure and activities to the environment

Control

- reporting mechanisms - -how effective have strategies been? - -what adjustments, if any, are necessary?

To be successful

managers need to learn the art of planning and strategic management

Picking right strategy

equally critical

Planning and Strategizing

need to be based on thorough SWOT analysis

Plans and Strategies

need to be flexible

Implementation

should be fast and efficient to achieve planned goals

GM Corporate Level Strategy (growth)

- concentration: Auto Industry - Diversification: ACDelco; GM Card; Onstar - Vertical Integration: owning distribution and part companies 60%

GM CLS (Internationalization)

transnational strategy: operations in more than 120 countries woldwide

GM CLS (Cooperation)

Strategic Alliance: GM and its strategic partners produce cars and trucks in 34 countries - -GM Korea Company - -Shanghai Gneral Motors Co - -SAIC-GM-Wuling Automobile Co - -SAIC GM Investment Liminited

GM CLS (Retrenchment and Restructing)

- divested in unprofitable partnerships - sold unprofitable brands - reduced suppliers

GM Initial Strategy: Differentiation

"a car for every purse and purpose" controlled more than half of car market 22% in 2008

GM Focus Now

Low-Cost Strategy - less differentiation - moving from 8-4 brands in the US - Stronger focus on core brands - more than a truck and SUV Co - Focus on fuel-efficient cars and sedans

GM Manufacturing

Low Cost - plant closures - sustainability - decrease operational costs - standard parts and equipment

GM Human Resource

Low Cost

GM Marketing

low cost - reducing their marketing budget by decreasing the amount advertisements they put out there buy making those advertisements have a bold statement and a lasting image in the customers minds - comparing of products in their commercials and on paper

strategic formulation

process of crafting strategy

mission

organizations reason for existence in society

operating objectives

specific results that organizations try to accomplish

Porter's competitive strategies

differentiation cost leadership focused differentiation focused cost leadership

differentiation

make products that are unique and different

cost leadership

produce at lower cost and sell at lower price

focused differentiation

use differentiation and target needs of a special market

focused cost leadership

use cost leadership and target needs of a special market

BCG Matrix

analyzes business opportunities according to market growth rate and market share

stars

higher market shares in high growth markets;; produce large profits through substantial penetration of expanding markets;; preferred strategy is growth

cash cow

have high market shares in low-growth markets;; they produce large profits and a strong cash flow;;

Question Marks

low market shares in high growth markets; they may not generate much profit at the moment. the upside potential is there b/c of the growing markets

Question Marks

low market shares in high-growth markets;; although they may not generate much profit at the moment, the upside potential is there because of the growing markets

Dogs

low market shares in low growth markets;; they produce little if any profit, and they have low potential for future improvement

Which is the best question to ask to start the strategic management process?

What is our mission?

The ability of a business firm to consistently outperform its rivals is called

Competitive Advantage

GE is a complex conglomerate that owns many firms operating in very different industries. The strategies pursued for each individual firm within GE umbrella would best be called ___ level strategies

Business

An organization that is downsizing by cutting staff to reduce costs can be described as pursuing a ___ strategy

Retrenchment

When you buy music downloads online, the firm selling them to you is engaged in which type of e-business strategy?

B2C

The alliances that link firms in supply chain management relationships are examples of how businesses can use ___ strategies

Cooperation

Among the global strategies that international businesses might pursue, the ___ strategy most directly tries to customize products to fit local needs and cultures in different countries

Multidomestic

If Google's top management were to announce that the firm was going to buy Federal Express, this would be a strategy of growth by ___

diversification

___ are special strengths that an organization has or does exceptionally well and that help it outperform competitiors

Core Competencies

A ___ in the BCG Matrix would have a high market share in a low-growth market

Cash COw

In Porter's five forces model, which of the following conditions is most favorable from the standpoint of industry attractiveness?

Low bargaining power of suppliers

The two questions Porter asks to identify the correct competitive strategy for a business or product line are: 1 what is the market scope? 2 what is the __?

source of competitive advantage

When Coke and Pepsi spend millions on ads trying to convince customers that their products are unique, they are pursuing what Porter calls a ___ strategy

differentiation

A firm that wants to compete with rivals by selling a very- low-priced product in a broad market would need to successfully implement a ___ strategy

cost leadership

In addition to focusing on strategy implementation and strategic control, the responsibility for strategic leadership of an organization involves success with ___

the process of continuous change

Ch 7 Flashcards

(77 cards)