BUAD441 midterm Tao

Strategy

the ideas, decisions, and actions that enable a firm to succeed (all about being different)

Strategic Management

the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages

Competitive Advantage

a firm's resources and capabilities that enable it to overcome the competitive forces in its industry

Strategic Management (analysis)

vision, mission, and objectives. Internal and external environments of the organization

Strategic Management (decisions)

ex. what industries should we compete in? How should we compete in those industries? Involves organizations domestic and internal operations

Strategic Management (actions)

implementation of strategies, allocate necessary resources, design the organization to bring the intended strategies to reality

Fundamental Q's of Strategic Management

1. How should we compete in order to create competitive advantages in the marketplace? 2. How can we create competitive advantages in the marketplace that are unique, valuable, and difficult for rivals to copy or substitute?

Operational Effectiveness

performing similar activities better than rivals

Key Attributes of Strategic Management (1/4)

Direct the organization toward overall goals and objectives. "organizational vs. individual rationality"

Key Attributes of Strategic Management (2/4)

Includes multiple stakeholders in decision making

Stakeholders

the individuals or groups that have an interest, stake, or claim in the actions and overall performance of a company

Key Attributes of Strategic Management (3/4)

Needs to incorporate short term and long term perspectives. Managers must maintain both a vision for future of organization and focus on present operating needs

Key Attributes of Strategic Management (4/4)

Recognizes trade offs between efficiency and effectiveness

Effectiveness

tailoring actions to the needs of an organization rather than wasting effort, or "doing the right thing"

Efficiency

performing actions at a low cost relative to a benchmark, or "doing things right"

Strategic Management Tradeoffs

managers need to be ambidextrous

Ambidexterity

the challenge managers face of both aligning resources to take advantage of existing product markets as well as proactively exploring new opportunities

Strategic Management Process

strategy analysis, strategy formulation, and strategy implementation

Intended Strategy

strategy in which organizational decisions are determined only by analysis (rarely survive in its original form)

Realized strategy

strategy in which organizational decisions are determined by both analysis and unforeseen environmental developments, unanticipated resource constraints, and/or changes in managerial preferences

Strategy analysis

study of firms' external and internal environments, and their fit with organizational vision and goals

Organizational goals and objectives

a firm's vision, mission, and strategic objectives form hierarchy of goals that range from broad statements of intent and bases for competitive advantage to specific, measurable strategic objectives

External Environment of the firm

managers must scan environment and analyze competitors. Two frameworks 1. general environment consists of several elements such as demographic and economic segments 2. industry environment consists of competitors and other orgs that may threaten success of firms products and services

Internal environment of the firm

strengths and relationships among activities that constitute a firm's value chain can be means of uncovering potential sources of competitive advantage

Firm's intellectual assets

The knowledge work and a firm's other intellectual assets are important drivers of competitive advantage and wealth creative. Assess how well organizations create networks and relationships as well as how technology can enhance collaboration among employees and provide a means of accumulating and storing knowledge

strategy formulation

decisions made by firms regarding investments, commitments, and other aspects of operations that create and sustain competitive advantage

Business level strategy

an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets

corporate level strategy

A plan that indicates in which industries and national markets an organization intends to compete.

International Strategy

determine entry strategy and how they will go about attaining competitive adv in international markets

Entrepreneurial strategy/competitive dynamics

how businesses can create new value, recognize viable opportunities, and formulate effective strategies

Strategy Implementation

actions made by firms that carry out the formulated strategy, including strategic controls, organizational design, and leadership

Informational control

requires that orgs continually monitor and scan environment and respond to threats and opportunities (Strategic control and corporate governance)

Behavioral Control

a method of organizational control in which a firm influences the actions of employees through culture, rewards, and boundaries (Strategic control and corporate governance)

Creating effective organizational designs

Organizational structures must be consistent with strategy

Organizational boundaries must be flexible & permeable

Strategic alliances must capitalize on capabilities of other organizations

Creating a Learning Organization

effective leaders: 1. set a direction 2. design organization 3. develop an org that is committed to excellence and ethical behavior

Fostering Corporate Entrepreneurship

- Firms must continually improve & grow

- Firms must find new ways to renew themselves

- Entrepreneurship & innovation provide for new opportunities

>Enhance a firm's innovative capacity

>Allow autonomous entrepreneurial behavior

Corporate Governance

The role of a corporation's executive staff and board of directors in ensuring that the firm's activities meet the goals of the firm's stakeholders

Stakeholder management

a firm's strategy for recognizing and responding to the interests of all its salient stakeholders

Zero sum

-stakeholders compete for attention & resources

- gain of one is a loss to the other

Symbiosis

stakeholders are dependent upon each other for success and wellbeing and receive mutual benefit

Social responsibility

the obligation of a business to contribute to society

Triple Bottom Line

assessment of a firm's financial, social, and environmental performance

Local line leaders

have significant profit-and-loss responsibility

Executive leaders

champion and guide ideas, create a learning infrastructure, and establish a domain for taking action

Internal networkers

hold little positional power, but have conviction & clarity of ideas

Hierarchy of goals

organizational goals ranging from, at the top, those that are less specific yet able to evoke powerful and compelling mental images, to, at the bottom, those that are more specific and measurable

Vision

evokes powerful and compelling mental images of shared future

Mission

encompasses organizations current purpose, basis of competition and competitive advantage

Strategic Objectives

a set of organizational goals that are used to operationalize the mission statement and that are specific and cover a well-defined time frame

Perceptual Acuity

the ability to sense what is coming before the fog clears

Environmental Scanning

surveillance of a firm's external environment to predict environmental changes and detect changes already under way

Environmental Monitoring

a firm's analysis of the external environment that tracks the evolution of environmental trends, sequences of events, or streams of activities

Competitive Intelligence

a firm's activities of collecting and interpreting data on competitors, defining and understanding the industry, and identifying competitors' strengths and weaknesses

Environmental forecasting

the development of plausible projections about the direction, scope, speed, and intensity of environmental change

Competitive intelligence

Helps firms define and understand their industry and identify rivals' strengths and weaknesses, avoid surprises

Scenario analysis

involves detailed assessments of the ways trends may affect an issue & development of alternative futures based on these assessments

Scenario planning

Strategy-planning activity in which managers envision different what-if scenarios to anticipate plausible futures.

SWOT analysis

strengths, weaknesses, opportunities, threats

Porter's Five Forces

Model developed by strategy expert Michael Porter that identifies five competitive forces that influence planning strategies.

Porter's Five Forces 1

threat of new entrants

Porter's Five Forces 2

buyer bargaining power

Porter's Five Forces 3

Supplier bargaining power

Porter's Five Forces 4

threats of substitutes for products and services

Porter's Five Forces 5

rivalry among existing competitors

The Value Chain

the series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm's products

Resource based view

a model that sees certain types of resources as key to superior firm performance

Strategic resources

firms' capabilities that are valuable, rare, costly to imitate, and costly to substitute

Overall cost leadership

a firm's generic strategy based on appeal to the industrywide market using a competitive advantage based on low cost

Differentiation

product is unique

Focus

narrow product lines

Industry life cycle

the stages of introduction, growth, maturity, and decline that typically occur over the life of an industry

Corporate level strategy

A plan that indicates in which industries and national markets an organization intends to compete.

Diversification

creates value for shareholders either through related or unrelated business