MAN 3025 Chapter 6

What is strategic positioning?

A strategy that attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company.

What are the three sources from which a strategic position emerges?

Few needs, many customers; broad needs, few customers; broad needs, many customers.

What does strategy require in terms of trade-offs?

Companies must choose not only which strategy to follow but also which ones not to follow.

What does 'fit' refer to in strategic management?

The ways a company's activities interact and reinforce each other.

What is corporate-level strategy focused on?

The organization as a whole, addressing questions like 'What business are we in?'

Who is responsible for business-level strategy?

Senior-level managers who focus on individual business units or product/service lines.

What does functional-level strategy involve?

Plans of action by each functional area to support higher-level strategies.

What are the five steps of the strategic management process?

1. Establish the Mission, Vision, and Values; 2. Assess the Current Reality; 3. Formulate Strategies and Plans; 4. Implement Strategies and Plans; 5. Maintain Strategic Control.

What is the purpose of a mission statement?

To define what the organization wants to become.

What is a current reality assessment?

An evaluation of where the organization stands to maximize efficiency and effectiveness.

What are the three common grand strategies?

Growth, stability, and defensive.

What is strategy implementation?

The process of putting strategic plans into effect.

What is strategic control?

Monitoring the execution of strategy and making necessary adjustments.

What is a sustainable competitive advantage?

When other companies cannot duplicate the value delivered to customers.

What does SWOT analysis assess?

Strengths, weaknesses, opportunities, and threats of an organization.

What are organizational strengths?

Skills and capabilities that give the organization a competitive advantage.

What are organizational weaknesses?

Drawbacks that hinder an organization in executing strategies.

What does PESTEL stand for?

Political, Economic, Social, Technological, Environmental, and Legal factors.

What is the purpose of the VIRO framework?

To analyze a resource's competitive strategic potential based on value, rarity, imitability, and organization.

What is forecasting in strategic management?

A vision or projection of the future to effectively allocate organizational resources.

What is benchmarking?

The process of comparing a company's performance with that of high-performing organizations.

What is a growth strategy?

A grand strategy that involves expansion in sales, revenues, market share, or number of customers.

What is an Innovation Strategy?

A growth strategy that focuses on improving existing products and services or introducing new ones to increase market share or profits.

What characterizes a Stability Strategy?

A grand strategy that involves little or no significant change in the organization.

What is a Defensive Strategy?

Also known as retrenchment strategy, it involves a reduction in organizational efforts.

What does the BCG Matrix evaluate?

It evaluates a company's portfolio of strategic business units based on market growth rates and market share.

What are cash cows in the BCG Matrix?

Successful but slow-growing units that generate cash flow and can be used to invest in new products or services.

What is Related Diversification?

A strategy where a company acquires a new business that is related to its existing business portfolio.

What is Unrelated Diversification?

A strategy where a company acquires another company in a completely unrelated business to reduce risk.

What is Vertical Integration?

A strategy where a firm expands into businesses that provide the supplies needed to make or distribute its products.

What are the five competitive forces in Porter's model?

1. Threats of new entrants, 2. Bargaining power of suppliers, 3. Bargaining power of buyers, 4. Threats of substitute products/services, 5. Rivalry among competitors.

What does the Cost-Leadership strategy focus on?

Keeping costs or prices of a product or service below those of competitors while targeting a wide market.

What is a Differentiation Strategy?

Offering products/services that are unique and superior in value compared to competitors while targeting a wide market.

What is a Cost-Focus Strategy?

Keeping costs or prices below competitors while targeting a narrow market.

What is a Focused-Differentiation Strategy?

Offering unique and superior value products/services while targeting a narrow market.

What is a Functional Strategy?

A plan of action by each functional area of the organization to support higher-level strategies.

What are the three core processes of business according to Larry Bossidy?

1. People, 2. Strategy, 3. Operations.

What does Strategic Control involve?

Monitoring strategic implementation and taking appropriate action based on results.

What is the purpose of evaluating competitive forces?

To understand the competitive landscape and inform business-level strategies.

What is the significance of analyzing strengths and weaknesses in strategy development?

It helps identify competitive advantages and areas for improvement.

What is the role of execution in strategy?

To align people with goals and achieve results through questioning, analysis, and follow-through.

What can lead to execution roadblocks?

Misaligned organizational culture, poor performance management, conflicting functional objectives, and employee resistance to change.

What is the goal of a diversification strategy?

To grow revenue or reduce risk by moving into new lines of business.

How does a company identify its winning move?

By determining strategic actions to take going forward based on market analysis.

What should leaders evaluate regarding competition?

They should analyze what competitors are doing and any new products or technologies that may impact the market.

What is the importance of aligning functional strategies with higher-level strategies?

To ensure that all levels of the organization are working towards the same goals.

What is the impact of effective leaders on talent evaluation?

They link people to strategic milestones and develop future leaders while addressing nonperformers.