Ch. 3 management fundamentals

mission

a statement of an organization’s fundamental purpose

strategic goals

a goal set by and for an organization’s top management

tactical goals

a goal set by and for an organization’s middle managers

operational goals 

a goal set by and for an organization’s lower-level managers 

strategic plan

a general plan outlining decisions about the resource allocation, priorities, and action steps necessary to reach strategic goals 

tactic plan 

aimed at achieving tactical goals

operational plan

a plan that focuses on carrying out tactical plans to achieve operational goals

strategy

a comprehensive plan for accomplishing an organization’s goals

strategic management

a comprehensive and ongoing management process aimed at formulating and implementing effective strategies; a way of approaching business opportunities and challenges

effective strategies

a strategy that promotes a superior alignment between the organization and its environment and the achievement of strategic goals 

distinctive competence

an organizational strength possessed by only a small number of competing firms

scope

when applied to strategy, it specifies the range of markets in which an organization will compete

resource deployment

how an organization distributes its resources across the areas in which it competes

business-level strategy

the set of strategic alternatives from which an organization chooses as it conducts business in a particular industry or market 

corporate-level strategy 

the set of strategic alternatives from which an organization chooses as it manages its operations simultaneously across several industries and several markets 

strategy formulation

the set of processes involved in creating or determining an organization’s strategies; it focuses on the content of strategies (determines what the strategy is)

strategy implementation

the methods by which strategies are operationalized or executed within the organization; it focuses on the processes through which strategies are achieved  (focuses on how the strategy is achieved) 

SWOT

an acronym that stands for strengths, weaknesses, opportunities, and threats

exploiting an organization’s opportunities and strengths, neutralizing its threats, avoiding (or correcting) its weaknesses

In swot analysis the best strategies accomplish an organization’s mission by (3)

organizational strengths

a skill or capability that enables an organization to create and implement its strategies 

distinctive competence 

is a strength possessed by only a small number of competing firms (rare among competitors) 

organizational weaknesses

a skill or capability that doesn’t enable an organization to choose and implement strategies that support its mission 

organizational opportunities

an area in the environment that, if exploited, may generate higher performance

organizational threats

an area that increases the difficulty of an organization performing at a high level

differentiation strategies

a strategy in which an organization seeks to distinguish itself from competitors through the quality of its products or services 

overall cost leadership strategy 

a strategy in which an organization attempts to gain a competitive advantage by reducing its costs below the costs of competing firms 

focus strategy

a strategy in which an organization concentrates on a specific regional market, product line, or group of buyers 

product lifecycle

a model that portrays how sales volume for products changes over the life of products

introduction stage

demand may be very high and sometimes outpaces the firm’s ability to supply the product

growth stage

more firms begin to produce the product, and sales continue to grow

maturity stage

overall demand growth for product begins to slow down, and the number of new firms producing the product begins to die down

decline stage

demand for the product or technology decreases, the number of organizations producing the product drops, and total sales drop 

strategic business unit (SBU)

each business or set of businesses within an organization

diversification

the number of different businesses that an organization is engaged in and the extent to which these businesses are related to one another 

single-product strategy

a strategy in which an organization manufactures just one product or service and sells it in a single geographic market 

related diversification

a strategy in which an organization operates in several businesses that are somehow linked with one another 

unrelated diversification

a strategy in which an organization operates multiple businesses that are not logically associated with one another 

management portfolio management techniques

methods that diversified organizations use to determine which businesses to engage in and how to manage these businesses to maximize corporate performance 

BCG (Boston Consulting Group)

a framework for evaluating businesses relative to the growth rate of their market and he organization’s share of the market 

dogs

businesses that have a very small share of a market that is not expected to grow

cash cows

businesses that have a large share of a market that is not expected to grow substantially (generate high profits that the organization should use to support question marks and stars)

question marks

businesses that have only a small share of a fast-growing market, the future performance of these businesses is uncertain 

stars

businesses that have the largest share of a rapidly growing market

GE Business Screen

a method of evaluating businesses along two dimension (industry attractiveness and competitive position); in general, the more attractive the industry and the more competitive the position, the more and organization should invest in a business

tactical plans (definition)

a plain aimed at achieving tactical goals and developed to implement parts of a strategic plan; an organized sequence of steps designed to execute strategic plans