Chapter 2 Flashcards
(48 cards)
When developing a strategic plan an organization must consider?
Marketing, operations,human resources(personnel), and finance
In order to have an effective strategic plan, an organization must?
First define its mission, conduct a SWOT analysis,and establish a set of priorities based on the organization(objectives that align with the mission).
Fundamental purpose for existing. Defines who the organization is, their values, and the customers they wish to serve.
Mission Statement
A mission statement should clearly articulate?
The basic product or service. Organizational goals. Organizational philosophy Organizational self-concept Public image
What is essential to a successful mission statement?
The recognition of what the business is and what the customer wants.
An analysis of the organizations environment and of the organization itself.
Situational Assessment
Access the environment (what are the changes, how will they affect the organization, and what opportunities do these changes present).
Situational Assessment
Conditions that’s a company must overcome in order to pursue a business opportunity.
Barriers to Entry
Examples: Are regulations, technology, financial, or strategic.
Barriers to Entry
Cost of leaving a particular business line.
Barriers to Exit
Examples: Fixed assets or specialized personnel.
Barriers to Exit
Benefits of a product relative to competing products that are important to the buyer and perceived by the buyer.
Differential Advantages
Able to sustain the operation for a period of time
Sustainable ( criteria of good diff adv)
Sources of Differential Advantage:
Product
Market
Cost
Trust
Company has unique technology,capability or clinical expertise that allows it to have a competitive position.
Product ( sources of diff adv)
Available to those who focus on a particular market segment.
Market (sources of diff adv)
Operational efficiency, expense control.
Cost (source of diff adv)
No party will exploit another’s vulnerabilities
Trust (source of diff adv)
Value seen by customers
Visible Value
Value that the producer builds into its product or service.
Invisible Value
Long-term performance targets the company hopes to achieve. Ex: Sales
Organizational Objectives
Organization is attempting to gain more sales from an existing business line or penetrate new markets.
Growth Market Strategies
Types of Market Growth Strategies:
Market penetration
Market development
Product development
Increasing sales of a present product and service in present market. Example: Attracting new customers(same product, same market).
Market Penetration
