Planning, Strategy, Competitive Advantage

Question 1

Strategy

Answer 1

Cluster of decisions about what goals to pursue, actions to take, how to use resources to achieve goals

Question 2

3 steps in planning

Answer 2

Determine mission and goals
Formulate strategy
Implement strategy

Question 3

Mission statement

Answer 3

Broad declaration of organizations purpose

Question 4

Why planning is important

Answer 4

Gives direction and purpose
Get managers participating in decisions
Coordinates managers of different functions
Controls managers

Question 5

Corporate level plan

Answer 5

Top managements decisions pertaining to organizations, mission, overall strategy, and structure

Question 6

Corporate level strategy

Answer 6

Plan that indicates in which industries and national markets an organization intends to compete

Question 7

Business level plan

Answer 7

Divisional managers decisions pertaining to division’s long term goals, overall strategy, and structure

Question 8

Business level strategy

Answer 8

Outlines specific methods of a division, business unit, or organization will use to compete effectively against rivals in industry

Question 9

Functional level plan

Answer 9

Functional manager’s decisions pertaining to goals they propose to pursue to help division attain business level goals

Question 10

Functional level strategy

Answer 10

Plan of action to improve ability of each of an organizations functions to perform its task-specific activities in ways that add value to an organizations goods and services

Question 11

Time horizon

Answer 11

Intended duration of plan

Question 12

Long term plan length

Answer 12

5 years or more

Question 13

Intermediate term plan length

Answer 13

1-5 years

Question 14

Short term plan length

Answer 14

Less than 1 year

Question 15

Standing plans

Answer 15

Use in programmed decision situations
Policies
Rules
Standard operating procedure

Question 16

Single use plans

Answer 16

Developed for one time non programmed issue
Programs
Project

Question 17

Strategic leadership

Answer 17

Ability of CEO and top managers to convey a compelling vision of what they want the organization to achieve to their subordinates

Question 18

Swot

Answer 18

Internal: strengths and weaknesses
External: opportunities and threats

Question 19

Five forces that shape strategy

Answer 19

Threat of new entrants 
Bargaining power of suppliers 
Threat of substitute product/service 
Bargaining power of buyers 
Rivalry among existing competitors

Question 20

Low cost strategy

Answer 20

Drive organizations total costs down below total costs of rivals

Question 21

Focused low cost strategy

Answer 21

Serving only one segment of the overall market and trying to be the lowest cost organization serving that segment

Question 22

Differentiation

Answer 22

Distinguishing an organizations products from the products of competitors on dimensions such as product design, quality, or after sales service

Question 23

Focused differentiation strategy

Answer 23

Serving only one segment of the overall market and trying to be the most differentiated organization serving that segment

Question 24

Stuck in the middle

Answer 24

Attempting to simultaneously pursue both a low cost strategy and a differentiation strategy
Difficult to achieve low cost with added costs of differentiation

Question 25

Concentration on a single industry

Answer 25

Reinvesting a company's profits to strengthen its competitive position in its current industry

Question 26

Vertical integration

Answer 26

Expanding a company's operations either backwards into an industry that produces inputs for products or forward into an industry that uses, distributes, or sells its products

Question 27

Diversification

Answer 27

Expanding company's business operations into new industry to produce new kinds of valuable goods or services

Question 28

Related diversification

Answer 28

Entering new business or industry to create a competitive advantage in one or more of an organizations existing divisions or businesses

Question 29

Unrelated diversification

Answer 29

Entering new industry or buying a company in a new industry that is not related in any way to an organizations current businesses or industries

Question 30

Global strategy

Answer 30

Selling the same standardized product and using the same basic marketing approach in each national market

Question 31

Multi domestic strategy

Answer 31

Customizing products and marketing strategies to specific national conditions Helps gain local market share Raises production costs

Question 32

Steps to implement plan

Answer 32

Allocate responsibility to appropriate individuals or groups Draft detailed action plans that specify how a strategy is to be implemented Establish timetable that include precise, measurable goals linked to attainment of action plan Allocate resources to responsible parties Hold specific parties responsible for attainment of corporate, divisional, and functional goals

Question 33

Planning

Answer 33

Identifying and selecting appropriate goals and courses of action for an organization