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Flashcards in Chapter7 Deck (62):
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Competitive Advantage

The ability to do something so well that one outperforms competitors

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Sustainable Competitive Advantage

The ability to outperform rivals in ways that are difficult or costly to imitate

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Strategy

A comprehensive plan guiding resource allocation to acheive long-term organization goals

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Strategic Intent

Focuses and applies organizational energies on a unifying and compelling goal

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3 Levels of Strategy

- Corporate Strategy - Business Strategy - Functional Strategy

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Corporate Strategy

Sets the long term direction for the total enterprise

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Business Strategy

Identifys how a division or strategic business unit will compete in its product or service domain

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Functional Strategy

Guides the activities within one specific area of operation

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3 Step Strategic Management Process

- Strategic Analysis - Strategic Formulation - Strategic Implementation

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Strategic Management

The process of formulating and implementing strategies

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Strategic Analysis

the process of analysing the organization, the environment and the organization's competitive position and current strategies

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Strategy Formulation

The process of creating strategies to guide the allocation of resources

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Strategy Implementation

The process of puting strategies into action

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Mission Statement

Expresses the organization's reason for existance in society

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5 Stakeholders of an Organization

- Employees - Comunities - Shareholders - Customers - Suppliers

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Strategic Constituancies analysis

Assesses the interest of stakeholders and howw well the organization is responding to them

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Core Values

Broad beliefs about what is or os not appropriate behaviour

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Organizational Culture

The predominant value system for the organization as a whole

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Operating Objectives

Specific results that organizations try to accomplish

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9 Operating Objectives

- Profitatability - Finantial health - Cost efficiency - Customer service- Product quality - Market share - Human talent - Innovation - Social responsability

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SWOT analysis

Examines organizational stranghts and weaknesses and environmental opportunities and threats

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Strenghts and Weaknesses Examples

- Manufacturing Efficiency - Workforce - Market Share - Financing - Reputation - Facilities - R&D- Techologies - Management - Past planning implementation

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Opportunities and Threats Examples

- Market - Economy - Porter 5 Forces - New Technologies - Resources - Customer Taste - Regulation

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Core Competency

A special strength that gives an organization a competitive advantage

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4 Grand or Master Strategies

- Growth Strategy - Stability Strategy - Renewal Strategy - Combination Strategy

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Growth Strategy

Involves expansion of the organization current operations

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Stability Strategy

Maintains current operations without substantial changes

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Renwal Strategy

Tryes to solve pb and overcome weaknesses that are hurting performance

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Liquidation

Business operations ceases and assets are sold to pay creditors

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Combination Strategy

Pursues growth, stability and/or retrenchement in some combination

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3 Growth Strategies

- Concentration - Diversification - Vertical Integration

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Growth Strategy: Concentration

Growth within the same business area

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Growth Strategy: Diversification

Gorwth by acquisition of or investment in new and different business area

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Growth Strategy: Vertical Integration

Growth by acquiering suppliers or distributors

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3 Restructuring Strategies

- Turnaround - Downsizing - Divestiture

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Restructuring

Changes the mix or reduces the scale of operations

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Turnaround

Strategy tries to fix specific performance problems

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Downsizing

Strategy decreases the size of operations

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Divestiture

Sell off part of the organization to refocuse attention on core business area

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3 Global Strategies

- Globalization Strategy- Multidomestic Strategy - Transnational strategy

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Globalization Strategy

Adopts standardized products and advertising for use worldwide

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Multi-domestic Strategy

Customize product and advertizing to best fit local needs.

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Transnational Strategy

Seeks efficiencies of global operations with attention to local market

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Strategic Alliance

Organizations joint togather in partnership to persue an area of mutual interest

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Co-opetition

A form of strategic alliance among competitors that work on a project of mutual benefit

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2 e-business strategies

B2B Business strategy B2C business strategy

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e-business strategy

Strategecly uses the internet to gain competitive advantage

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B2B business strategy

Uses IT and web portal to link organizations verticaly in the supply chain

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B2C business strategy

Uses IT and web portals to link business to customers

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Portfolio Planning

An approach that seeks the best mix of investments among alternative business opportunities

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BCG Matrix

Analyses business opportunities according to market growth rate and market share (4 types of product: Question marks, Stars, Dogs, Cash Cow)

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Porter's 4 Competitive Strategies

- Cost leadership strategy - Differentiation strategy- Focused low-cost strategy- Focussed differentiation strategy

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Differentiation Strategy

Offers product that are different from the competition

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Cost Leadership Strategy

Seeks to operate with lower cost so that product can be sold at lower price

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Focused Strategy

Concentrates on serving a unic market segment better that anyone else

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Focused Differentiation Strategy

Offers a unique product to a special market segment

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Focused Cost Leadership

Strategy seeks the lower cost of operations within a special market segment

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Strategic Incrementalism

Makes modest changes in strategy as experience builds over time

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Emergent Strategy

Unfolds over time as managers learn from and respond to experiences

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Corporate Governance

System of control and performance monitoring of top management

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Strategic Control

Makes sure strategies are well implemented and that poor strategies are scrapped or modified

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Strategic Leadership

Inspiers people to continuously change, refine, and improve strategies and their implementation