To think strategically means to take the long-term view and see the big pictures. Managers in all types of organizations, including businesses, nonprofit organizations, and government agencies, have to think about how the organization fits in the environment.
Refers to the set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals.
is the plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining goals.
refers to what sets the organization apart from others and provides it with a distinctive edge in the marketplace.
Managers strive to develop strategies that focus on core competencies, create synergy, and deliver value.
Is something that the organization does particularly well in comparison to others.
exists when the orgazation's parts interact to produce a joint effect that is greater than the sumof the parts acting alone.
pertains to the organization as a whole and the combination of business units and products that make it up.
Pertains to each business unit or product line within the organization.
Functional-level Strategy
Pertains to the major functional departments within each business unit, such as manufacturing, marketing, and research and development.
is the stage of strategic management includes the panning and decision making that lead to the establishment of the organization's goals and a specific strategic plan.
Managers often start with a SWOT analysis
an audit or careful examination or strength, weaknesses, opportunities, and threats that affect organization performance.
The proliferation of free software over the internet is a threat to Microsoft. Toyota's safety problems have provided an unexpeted opportunity for U.S. automakers.
is the stage of strategic management that involves the use of managerial achieving strategc outcomes.
Frameworks for corporate-level strategy include portfolio strategy, the BCG matrix, and diversificaton strategy.
pertains to the mix of strategic business units and product lines that fit together in a logical way to provide synergy and competive advantage.
Strategic business unit (SBU)
is a division of the organization that has a unique business, mission, product or service line, competitors, and markets relative to other units of the same organization.
is a concept developed by the Boston Consulting Group that evaluates SNUs with respec to two demensions-business growth rate and market share- and classifies them as cash cows, stars, question marks, or dogs.
the strategy of moving into new lines of business
means moving into a new business that is related to the corporation's existing business activities.
refers to expanding into totally new lines of business.
Some managers pursue diversification through a strategy or vertical integration
means expanding into businesses that either provide the supplies needed to make products or distribute and sell the company's products.
Porter's 5 competitive Forces
1. Potential new entrants.2. Bargaining
power of buyers.
3. Bargaining power of suppliers.
4.Threat of substitute products.
5. Rivalry amoung competitors.
Internet reduces barriers to entry
Bargaining power of buyers
Internet shifts greater power the end consumers
Bargaining power of suppliers
internet tends to increase bargaining power to suppliers
Threat of substitute products
Internet creates new substitution threat
Rivalry among competitors
internet blurs differences among competitors.
1. Defferentiation2. Cost leadership
3.Focus
is a strategy with which managers seek to distinguish to organization's priducts and services from those of others in the industry.
is a strategy with which managers aggressively seek efficient facilities, cut costs, and use tight cost controls to be more efficient than others in the industry.
managers use either a differentiation or a cost leadership approach, but they concentrate on a specific regional market or buyer group.
* one new approach to strategy emphasizes flexibility to respond to rapidly changing
conditions rather than be tied to a long-term plan.*Another new approach is to use strategic partnerships as an alternative to more pernanent mergers and ecquisitions.
*Book publisher Random House has developed strategic partnership with videofame makers to find new sources or revenue.
Means that product design and advertising strategies are standardized throughout the world. (this approach is based on the assumption that a single global market exists for many consumers and industrial products.
means that competition in each country is handled independently of industry competition other countries.
is a strategy that combines global coordination to attain efficiency with local flexibility to meet needs in different countries.
Domestically focused. Exports a fes domestically produced products to selected countries.
Six Silent Killers of Strategy
1. Top-down or laissez-faire senior management style2. unclear strategy and conflicting priorities
3.and ineffective senior management team.
4.Poor vertical communication
5.poor coordination across functions, businesses, or borders
6. inadequate down-the-line
leadership skills and development
Tools for putting Strategy into Action
1. Visible leadership2.clear roles and accountability
3. candid communication
4 appropriate human resource practices