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POM > Chapter 4: Strategic and Tactical Planning > Flashcards

Chapter 4: Strategic and Tactical Planning Flashcards

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0
Q

Organisation mission is the organisation’s

A

Basic purpose

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1
Q

What is strategic planning?

A

A process done by managers
Determine organisation mission
Set of means to achieve this basic purpose

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2
Q

A strategy is a

A

Broad and general plan developed to reach

Strategic and long term goals

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3
Q

Companies that don’t just have a single business are into

A

Diversification

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4
Q

Diversification refers to

A

Number of different goods/services a company produces

And the number of different markets it serves

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5
Q

Large scale diversified organisations are called

A

Conglomerates

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6
Q

Diversified organisations have different

A

Levels at which strategic planning is done

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7
Q

The levels at which strategic planning is done is

A

Corporate level

Business level

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8
Q

Corporate level develops a

A

Strategy that guides the activities of organisations that consist of more than one line of business

It focuses on:
Kinds of business the firm wants to engage in
Ways to acquire or divest business
Allocation of resources among various business
Ways to manage these business

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9
Q

Business level strategy is done

A

After corporate strategy

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10
Q

Business level strategy

A

Guides the operations of a single business that produces a particular good/service to a specific industry or market segment

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11
Q

The focus is on which level?

A

Business level

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12
Q

What are the steps of strategic planning?

A
  1. Develop mission and goals
  2. Diagnose threats and opportunities
  3. Assess strengths and weaknesses
  4. Generate alternative strategies
  5. Develop strategic plan
  6. Develop tactical plan
  7. Correct and assess results
  8. Repeat planning process
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13
Q

Organisational mission and goals are developed by asking

A

Who are we
What business are we in
What do we want to become

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14
Q

What are the big groups of threats?

A

General environment

Porter’s 5 major competitive forces

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15
Q

What are the dimensions in Porter’s 5 major competitive forces?

A 
Rivalry among existing firms
Bargaining power of customer
Bargaining power of suppliers 
Threats of new entrants
Threat of substitute product or service
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16
Q

The greater the competitive forces,

A

The greater the threat

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17
Q

We measure the competitive forces by

A

Intensity

High/low

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18
Q

If there is too great threat, organisation

A

Might not reach strategic goals

Reduced profit potential

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19
Q

When the competitive forces are weaker,

A

There are greater opportunities for the company to operate successfully

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20
Q

Rivalry among existing firms is the extent to which

A

Competitors continually compete for business

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21
Q

Factors for high rivalry among existing firms include

A 
Large number of competitors
High rate of industry growth
Price competition
Advertising battles
New product introduction
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22
Q

The bargaining power of customers is the extent to which

A 
Customers are able to
Force down prices 
Bargain for higher quality 
More service at the same price
Play competitors against each other
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23
Q

Customers have high bargaining power when

A

Small number of customers purchase relatively large volumes from seller
Customers purchase standard/undifferentiated goods or services
Customers can easily switch from one seller to another

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24
The bargaining power of suppliers is the extent to which
Suppliers can exert power of businesses in an industry by Threatening to raise price Reduce the quality of goods/services
25
Suppliers have high bargaining power when
Small number of suppliers sell to a large number of buyers Suppliers goods are differentiated Suppliers do not have to worry about substitute goods and service
26
Threats of new entrants is the extent to which
New competitors can enter the same product or service markets
27
Threat of new entrants is affected by
Barriers to entry
28
Threat of substitute product or service is the extent to which
Businesses in other industries offer substitute products
29
Assessing strengths and weaknesses helps managers identify organisation
``` Distinctive capabilities and competencies Relative competitive position Human resource skills Technological capabilities Financial resources Managerial depth ```
30
The two strategies are
Growth strategies | Porter's competitive strategies
31
Growth strategies explains the
Direction of strategy | WHERE
32
Porters competitive strategies explains
How companies choose to compete
33
The growth strategies are
Market penetration Market development Product development (Differentiation)
34
Market penetration involves
Seeking growth in current markets | Using current goods/services
35
A firm increases market share in market penetration by
Increasing rate of purchase of product Attracting competitors customers Buying a competition Converting nonusers to users
36
Market development involves
Seeking new markets with current products
37
Market development is done by
Finding new geographic markets Finding new target markets Finding new uses
38
Product development strategy involves
developing new or improved goods or services | For current markets
39
Product development is done by
Improving features Improving quality Enhancing aesthetic appeal Adding models
40
Porters competitive strategies involve two dimensions. They are
Strategic target | Strategic advantage
41
Strategic target spans from
Industry wide | Industry niche
42
Strategic target indicates how
Widely the good or service is intended to compete
43
Niche is a
Narrowly defined market segment | Competitors overlook and have difficulty serving
44
Strategic advantage spans from
Low cost | Uniqueness
45
Strategic advantage indicates the
basis on which good or services are intended to compete
46
Industry wide and unique. The strategy is
Differentiation
47
Differentiation involves
Developing goods/services that are viewed as unique in the industry
48
The ways products can be different are
``` Unique design Unique brand image Technology Customer service Features High quality Product warranty ```
49
With successful differentiation, firms can
Change premium prices | Leading to above average profits
50
Industry wide and low cost. The strategy is
Cost leadership
51
Cost leadership involves
Emphasising internal organisational efficiency | Overall prices of providing goods/services are lower than those of competitors
52
When strategic target is niche, strategy is
Focus
53
Focus strategy involves
Competing in a specific industry niche Offering unique product Or low cost product
54
A strategic plan is developed after
Strategy is selected
55
A strategic plan should
Specify action to be taken in order to achieve goals ``` Addresses how: Technological Marketing Financial HR will be obtained ``` Research and development will be conducted Organisation and management capabilities utilized
56
Tactical plans helps
Implement strategic plan
57
Strategic and tactical planning must be accompanied by
Controls
58
Controls ensure
Implementation of plans | Evaluation of results
59
If plans do not produce desired results, managers need to
Change mission Goals Strategies Or plans
60
Planning needs to be repeated because
Factors and forces that affect organisation are constantly changing Need to adapt
61
Two mistakes in planning are
Extinction by instinct | Paralysis by analysis
62
Extinction by instinct occurs when
Managers are so concerned with solving immediate problems Making quick decisions Do not strategically plan long-term
63
Paralysis by analysis occurs when
Managers get so bogged down with detailed planning | Neglect making important decisions
64
Common barriers to effective planning are
Inability to plan Improper planning process Improper information
65
Inability to plan arises from
Managers lacking Background Knowledge Conceptual skill
66
Improper planning process arises from
Inexperienced managers not knowing the process
67
Improper information are
Out of date Poor quality Insufficient
68
Effective planning is ensured through
Getting as much information as possible Multiple sources of information Inclusion of right people
69
Getting information should be
Within limits of time and money
70
There should be multiple sources of information because
Manger is not an expert in every area

POM (16 decks)

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