Strategy Formulation and Implementation

Vocabulary flashcards covering key concepts, frameworks, and strategy execution tools from Chapter 8: Strategy Formulation and Implementation (Management, 15th Edition by Richard L. Daft).

Strategic Management

The set of decisions and actions used to formulate and execute strategies that will provide a competitively superior fit between an organization and its environment to achieve organizational goals.

Strategy

A plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization's goals.

Competitive Advantage

What sets an organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the marketplace.

Distinctive Competence

Something an organization does especially well in comparison to its competitors.

Synergy

Occurs when organizational parts interact to produce a joint effect that is greater than the sum of its parts acting alone.

Corporate-Level Strategy

Pertains to the organization as a whole and the combination of business units and product lines that makes up the corporate entity, answering the question: 'What business are we in?'

Business-Level Strategy

Pertains to each business unit or product line, answering the question: 'How do we compete?'

Functional-Level Strategy

Pertains to the major functional departments within a business unit (such as finance, R&D, manufacturing, and marketing), answering the question: 'How do we support the business-level strategy?'

Strategy Formulation

Includes the planning and decision-making that lead to the establishment of the firm's goals and the development of a specific strategic plan.

Strategy Execution

The use of managerial and organizational tools to direct resources toward accomplishing strategic results.

SWOT Analysis

An audit of internal and external factors, evaluating internal Strengths and Weaknesses alongside external Opportunities and Threats.

Strategic Business Units (SBUs)

A business division of the organization that has a unique business mission, product line, competitors, and markets relative to other SBUs in the corporation.

Portfolio Strategy

Pertains to the mix of SBUs and product lines to provide synergy and competitive advantage for the corporation.

BCG Matrix

A corporate portfolio model that organizes business units along two dimensions: business growth rate and market share.

Star

A business unit in the BCG matrix characterized by rapid growth and expansion, holding a high market share in a high-growth industry.

Cash Cow

A business unit in the BCG matrix with high market share in a low-growth industry that generates profits to finance bright prospects and stars.

Bright Prospect

A new venture in the BCG matrix with low market share in a high-growth industry that involves high risk, where a few become stars and others are divested.

Dog

A business unit in the BCG matrix with low market share in a low-growth industry that receives no investment, kept only if it yields some profit, or considered for divestment.

Diversification

A corporate strategy of moving into new lines of business.

Merger

Occurs when two or more organizations combine to become one.

Joint Venture

Involves a strategic alliance or program undertaken by two or more organizations.

Related Diversification

Expansion into new business activities that are related to existing organizational business activities.

Unrelated Diversification

Expansion into new lines of business that are not related to existing organizational business activities.

Vertical Integration

Expansion into businesses that supply to the business or serve as distributors for its products.

Porter's Five Competitive Forces

Five industry forces that determine competitive intensity: potential new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitute products, and rivalry among competitors.

Differentiation Strategy

A competitive strategy aimed at distinguishing the organization's products and services from others in the industry.

Cost Leadership Strategy

A competitive strategy in which an organization aggressively seeks efficient facilities, cost reductions, and cost controls.

Focus Strategy

A competitive strategy that concentrates on a specific regional market or buyer group, using either a differentiation or cost leadership approach.

Globalization Strategy

A global strategy that treats the world as a single global market and uses standardized product design and advertising strategies throughout the world.

Localization Strategy

A global strategy that handles competition in each country independently, adapting product and advertising strategies to local tastes and needs.

Glocalization Strategy

A global strategy that combines global coordination to attain efficiency with local flexibility to meet needs in different countries.

Export Strategy

A global strategy that is domestically focused and exports a few domestically produced products to selected countries.

Embeddedness

Deep understanding and acceptance of organizational direction and purpose throughout the organization.

Elements of Competitive Advantage Model

A framework showing that competitive advantage is built at the core by four surrounding elements: target customers, exploring distinctive competence, achieving synergy, and creating value.

Three Levels of Strategy in Organizations Diagram

A structural diagram displaying Corporate-Level Strategy (Corporation), Business-Level Strategy (Consumer Products Unit, Biotechnology Unit, Media Unit), and Functional-Level Strategy (Finance, R&D, Manufacturing, Marketing).

Strategic Management Process Diagram

A flowchart outlining the steps from evaluating current mission/goals/strategies, scanning external/internal environment (SWOT), identifying strategic factors, defining new mission/goals, formulating corporate/business/functional strategies, to implementing strategy.

SWOT Analysis for The Kroger Company

An example SWOT matrix detailing Strengths (acquisition of Albertsons, private-label brands), Weaknesses (high debt load, no international presence), Opportunities (expand online sales, organic foods), and Threats (nontraditional rivals like Walmart/Target/Amazon).

BCG Matrix Diagram

A matrix mapping Business Growth Rate against Market Share into four quadrants: Stars (high growth, high share), Bright Prospects (high growth, low share), Cash Cows (low growth, high share), and Dogs (low growth, low share).

Porter's Five Forces Diagram

A model showing Rivalry Among Competitors surrounded by Potential New Entrants, Threat of Substitute Products, Bargaining Power of Buyers, and Bargaining Power of Suppliers.

Characteristics of Porter's Competitive Strategies Grid

A 2x2 grid categorizing business strategies into Differentiation, Cost Leadership, Focused Differentiation, and Focused Cost Leadership based on Strategic Target (broad vs. narrow) and Source of Advantage (distinctiveness vs. low costs).

Global Corporate Strategies Grid

A 2x2 matrix categorizing Globalization Strategy, Glocalization Strategy, Export Strategy, and Localization Strategy based on Need for Global Integration and Need for National Responsiveness.

Factors That Contribute to the Failure of Strategy Execution Diagram

A breakdown of failure reasons in execution: Employee resistance (39%), Manager behavior doesn't support new direction (33%), Inadequate budget or resources (14%), and Other barriers (14%).

Tools for Putting Strategy into Action Diagram

A framework showing four tools linking strategy to performance: Visible Leadership, Clear Roles and Accountability, Candid Communication, and Human Resources.