Strategic Management - Key Concepts & Frameworks

Vocabulary practice flashcards generated from Strategic Management Lecture 1 notes covering strategy levels, analytical tools, models, and decision-making frameworks.

Strategy

A comprehensive plan that outlines how an organization or individual will achieve its long-term objectives in a changing environment.

Strategic Management

The process of formulating, implementing, and evaluating strategies to help an organization achieve its long-term goals.

Corporate-Level Strategy

The highest level of strategy, formulated by top management, which focuses on the overall direction and scope of the organization across its various business units.

Business-Level Strategy

A strategy that focuses on how a specific business unit or product line competes successfully and gains competitive advantage in a particular market.

Functional-Level Strategy

A strategy developed by individual departments (such as marketing, finance, or operations) to support business-level strategies and maximize departmental efficiency.

Rational Approach

A strategic decision-making approach based on a logical, step-by-step process of problem identification, information gathering, alternative evaluation, selection, implementation, and review.

Incremental Approach

A decision-making strategy where plans develop through small, gradual changes based on existing policies and past choices rather than major shifts.

Garbage Can Approach

A decision-making process common in complex or ambiguous organizations where decisions emerge from a random combination of problems, solutions, participants, and opportunities.

Strategic Intent

An organization's long-term ambition and determination to achieve a desired future position, serving to provide direction and employee motivation.

Vision Statement

A clear, inspiring, and future-oriented statement describing what an organization aspires to become in the long term.

Mission Statement

A present-focused statement explaining an organization's core purpose, primary activities, customers served, and value creation to guide daily operations.

SMART Objectives

Specific, Measurable, Achievable, Relevant, and Time-bound targets designed to translate broad goals into actionable operational steps.

Corporate Governance

The system of rules, practices, and processes by which a company is directed and controlled to ensure ethical, transparent management aligned with stakeholder interests.

Social Responsibility

The obligation of an organization to make decisions and take actions that positively contribute to the welfare of society and the environment while achieving business goals.

Environmental Scanning

The continuous process of gathering, analyzing, and interpreting external information to anticipate changes, identify opportunities, and minimize threats.

Micro Environment

The task environment consisting of external factors directly impacting daily business operations, including customers, competitors, suppliers, intermediaries, and publics.

Macro Environment

The general external environment comprising broad forces—economic, political, legal, technological, social, demographic, and natural—that affect all businesses within an economy.

Porter's Five Forces Model

A strategic framework developed by Michael E. Porter in 1979 to evaluate an industry's competitive intensity and overall attractiveness.

Threat of New Entrants

A competitive force in Porter's model measuring the ease with which new competitors can enter an industry based on barriers such as capital requirements and scale.

Value Chain Analysis

A strategic model introduced by Michael Porter in 1985 that breaks down an organization into primary and support activities to optimize processes and increase customer value.

Primary Activities

Core value chain activities directly involved in creating and delivering a product or service: inbound logistics, operations, outbound logistics, marketing & sales, and service.

Support Activities

Value chain activities that provide necessary infrastructure and input for primary activities: procurement, technology development, human resource management, and firm infrastructure.

PESTEL Analysis

A strategic framework used to evaluate macro-environmental factors facing an organization: Political, Economic, Social, Technological, Environmental, and Legal.

SWOT Analysis

A foundational strategic tool used to evaluate internal Strengths and Weaknesses against external Opportunities and Threats.

BCG Growth-Share Matrix

A corporate portfolio management matrix developed by Bruce Henderson of BCG in the 1970s that categorizes business units into Stars, Cash Cows, Question Marks, and Dogs.

Stars (BCG Matrix)

High market share units operating in high-growth markets that require continuous investment to maintain their dominant market position.

Cash Cows (BCG Matrix)

High market share units operating in low-growth markets that generate surplus cash beyond what is required to maintain their market position.

Question Marks (BCG Matrix)

Low market share units operating in high-growth markets that demand significant resource investment to improve market position amidst uncertain future returns.

Dogs (BCG Matrix)

Low market share units operating in low-growth markets that generate low or zero profits and tie up organizational capital.

Experience Curve

A concept developed by BCG stating that cumulative production increases lead to predictable per-unit cost decreases due to learning, scale, and operational efficiencies.

GE McKinsey Matrix

A nine-cell matrix evaluating strategic business units across Industry Attractiveness and Business Unit Strength to categorize decisions into Invest/Grow, Selective, and Harvest/Divest zones.

Strategic Capability

The ability of an organization to deploy its resources, skills, and competencies effectively to achieve strategic goals and establish a sustainable competitive advantage.

Core Competencies

Unique organizational strengths and capabilities that create customer value, are difficult for rivals to imitate, and can be extended across multiple business markets.

VRIO Framework

An internal analysis tool used to evaluate resource value based on four criteria: Valuable, Rare, Inimitable, and Organization.