Chapter 6 Flashcards
(25 cards)
Board of Directors
group of individuals who are elected by teh ownership of a corporation to have oversight and guidance over management and who look out for the shareholder’s interests.
Boston Consulting Group Matrix (BCG)
matrix that enhances multidivisonal firm’s efforts to formulate strategies; it examines the relative market share posiition and the industy growh rate of each divison relative to all other divisions in the organization. In a matrix, each circle represents a division, the size corresponds to the proportion of corporate revenue generated by that business, and the pie slic indicated the proportion of corporate profits generated by that division.
Business Portfolio
autonomous divisions, or profit centers, of an organization
Cash Cows
Divisions located in Quadrant III of the BCG Matrix; business in this quadrant generate cash in excess of their needs, they are often milked. Attractive strategies include product development and diversification.
Competitive Position
an internal dimension of the SPACE Matrix
Decision Stage
stage 3 of the strategy-forumlation analytical framework; it involves the QSPM
Dogs
Divisions located in Quadrant IV of the BCG Matrix; business in this quadrant have low relative market share and compete in a slow or no growth market industry. Attractive strategy? retrenchment
Financial Position
an internal dimension of the SPACE Matrix
Halo Error
the tendency to put too much weight on a single factor
Industry Position
an external dimension of the SPACE Matrix
Input Stage
stage 1 of the strategy-formulation analytical framework; it summarizes the basic input information needed to forumulate strategies
Internal-External (IE) Matrix
matrix that positions an org’s various divisions in a nine cell display, it involves plotting org divisions in a diagram; the size of the circle represents the % sales contribution of each division, and the pie slices indicated the % profit contribution of each division. It is based on two key dimensions - the IFE total weighted scores and the EFE total weights scores.
Matching
the relating of external and internal critical sucess factors
Matching Stage
stage 2 of the strategy-formulation analytical framework; it focuses upon generating feasible alternative strategies by aligning/matching key external and internal factors (Matrix: SWOT, SPACE, BCG, IE, and Grand Strategy).
Questions Marks
Divisions located in Quadrant I of the BCG Matrix; business in this quadrant must decide whether to strengthen them by pursuing an intensive strategy
Relative Market Share Position
the ratio of a division’s own market share, or revenues, in a particular industry to the market share, or revenues, held by the largest rival firm in that industry
SO Strategies
the use of a firm’s internal strengths to take advantage of external opportunities
Stability Position
an external dimension of the SPACE Matrix
Stars
Divisions located in Quadrant II of the BCG Matrix; business in this quadrant represent the org’s best long run opportunities for growth and profitability. Strategies to consider include - forward, backward, and horizontal integration, market penetration, market development, and product development.
Strategic Position and Action Evaluation (SPACE) Matrix
a four quadrant framework that indicates whether aggressive, conservative, defensive, or competitive strategies are most appopriate for an organization; the axes of the SPACE Matrix represent two internal dimensions (financial position and competitive position) and external dimensions (stability position and industry position).
Strategy-Formulation Framework
a three stage decision making framework (9 total techniques) : The Input Stage, The Matching Stage, and The Decision Stage.
SWOT Matrix
a matching tool that thelps to develop four types of strategies : SO, WO, ST, and WT strategies
ST Strategies
the use of a firm’s strengths to avoid or reduce the impact of external threats
WO Strategies
improving internal weaknesses by taking advantage of external opportunities
