Strategic Mgmt
What managers do to develop the org’s strategies. Involves PLOC
Strategies
Plans for how the org will do whatever it’s in business to do, how it will copete successfully, and how it will attract and satisfy its customers in order to ahieve its goals
3 Types of Strategies Note: Page 229, Exhibit 9-3 is useful.
Corporate, Competitive, Functional
Business Model
How a company is going to make money.
2 Things that a Business Model focuses on
- Whether customers will value what the company is providing, 2. Whether the company can make any money doing that
3 Reasons why Strategic Mgmt is Important
- Can make a diff in how well an org performs, 2. Managers cope with uncertainty by using the strategic mgmt process to examine relevant factors and decide what actions to take, 3. Strategic Mgmt helps each part of the org work together toward achieving the org’s goals
The Strategic Mgmt Process
- identify the org’s current Mission, Goals and Strategies, 2. doing an External Analysis (Opps and Threats), 3. doing an Internal Analysis (Resources, Capabilities, Core Competencies, Strengths, and Weaknesses), 4. Formulating strategies, 5. Implementing strategies, 6. Evaluating results. Sentence for memory (lol): [MGS, EA, IA, F, I, E] Marijuana Gives Such, Eccentric And, Imaginative Appreciation, For, Indecent, Expectations
Mission
Statement of an org’s purpose
Resources
Assets (Fin, Phy, Human, Intangible) “what” the org has
Capabilities
Skills and abilities in doing the work activities needed in its business “how” the org does its work
Core Competencies
Major value-creating capabilities of the org
Resources and Core Competencies determine the org’s ___
competitive weapons
Strengths (Weaknesses)
Activities the org does (doesn’t do) well and/or any unique resources that it has (resources it needs but doesn’t possess)
Corporate Strategy
An organizational strategy that determines what business a company is in/wants to be in and what it wants to do with those businesses.
A corporate strategegy is based on (1) the __ and ___ of the org and (2) the ___ that each business unit of the org will play
mission, goals, roles
Types of Corporate Strategy
Growth, Stability, Renewal
Corporate Growth Strategy
A corporate strategy that’s used when an org wants to expand the number of markets served or products offered either through its current business(es) or through new business(es)
Orgs grow by using
Concentration (focus on primary line of business - increases the no. of products offered/markets served), Vertical Integration (Backward: it becomes its own supplier; Forward: Org becomes its own distributor), Horizaontal Integration (Combining with competitors), or Diversification (Related: Combines with other companies in different but related industries; Unrelated: Combines with firms in diff and unrelated industries)
Corporate Stability Strategy
An org continues to do what it is currently doing. Org doesn’t grow but doesn’t fall behind, either.
Corporate Renewal Strategy
Retrenchment: Short-run renewal strategy used for minor performance problems that helps an org stabilize ops, revitalize organizational resources and capabilities, and prepare to compete once again; Turnaround: A more drastic strategy employed when an org’s probs are more serious.
In both Retrenchment and Turnaround Strategies, managers do 2 things: ____ and ____. However, in a turnaround strategy, these measures are more extensive than in a retrenchment strategy
cut costs, turnaround strategy
Corporate Portfolio Matrix
Provides a framework for understanding diverse businesses and helps managers establish priorities for allocating resources. (BCG matrix,
Boston Consulting Group (BCG) Matrix Note: See Page 231, Exhibit 9-4
A strategy tool that guides resource allocation decisions on the basis of market share and growth rate of SBUs. Used to identify which business(es) offered high potential and which were a drain on organizational resources. A business unit is evaluated using a SWOT analysis and placed in one of the 4 categories
Dogs should be ___. Managers should “milk” cash cows for as much as they can, limit any ___ in them, and use the large amounts of cash generated to (1) ___ and (2) ___ with ___. The stars will eventuall develop into ____ as their markets ___ and sales growth ___.
sold off/liquidated, new investment, stars, question marks, strong potential to improve market share, cash cows, mature, slows
