STRAMA 3&4

Strategy formulation

Investigation, analysis, and decision making by outlining the company competitive advantage

Vision

Refers to the desired futures state or big picture of what an organization desire to achieve

Imaginable

A good vision convey a picture of what the future will be

Desirable

Appeals to the long term interest of employers, customers, stockholders and others

Feasible

Comprises realistic and attainable goals

Focused

Clear enough to guide decision making

Flexible

General enough to allow individual initiatives and alternative responses in light of charging conditions

Communicable

Is easy to communicate

Mission

More specific and action oriented

Measurable

At least one indicator must measure progress against fulfilling the objective

Specific

Means providing a clear message

Appropriate

Must be consistent with the organization that vision and mission

Realistic

Given the organization capabilities and environmental opportunities, it must be an achievable

Timely

There must be a time frame

Corporate level strategy

Primarily about a the choice of direction for a firm and the management of its various products

Directional strategy

Refer to the firm’s overall orientation towards growth, stability, or retrenchment

Portfolio analysis

Includes the industries or markets in which the firms competes through its product

Parenting strategy

How the management coordinate activities, transfer resources

Growth strategies

Can be received through considerable growth in your respective industry

Backward integration

The prices in which a company purchases or internally produce certain inputs

Forward integration

Strategy where the company gains control of the businesses activities ahead in the Value chain

Diversification (horizontal growth)

Can be achieved by expanding a company’s operations into other geographic locations

Concentric diversification

Can be achieved my expanding the prod portfolio by adding new prod

Conglomerate diversification

Can be achieved by moving new prod or services that have no technological or commercial relations

Paused/proceed with caution strategy

Typically conceived as temporary strategy

No change strategy

Decision to do nothing new

Profit strategy

Decision to do nothing new in worsening situation

Retrenchment strategy

Firm’s actions to pursue cutbacks or ultimate divestment

Turnaround strategy

emphasized improving Operational efficiency

Contraction

The initial effort to quickly stop the bleeding

Consolidation

Implements a plan to reduce unnecessary expenses

Rebirth

Happens if the company is successful with its effort and start growing profitably again

Captive company strategy

Involves giving up independence in exchange for security

sell-out

involves selling the entire company to another firm

Divestment

Involves selling a division of the company with low growth potential

Bankruptcy

Giving up management of the firm to the courts in return for some settlement

Liquidation

The termination of the whole firm

Portfolio analysis

Top management views its product lines and business units as series of investment

Strategic business

A single business or a collection of competitors

Strategic business unit (SBU)

Aims to develop different strategies and assigned appropriate fundings

Stars

Prod with a company’s product line which can be considered a market leader

Question marks

These are new products with the potential for success but need a lot of cash

Cash cows

Typically bring in far more money than I needed to maintain their market share

Dogs

Have a low market share

Corporate parenting

Generates corporate strategy by focusing on the core competencies

Functional strategy

The short term game plan for key functional areas

Marketing strategy

Deals with pricing, selling, and distributing a product or service

Market development strategy

Strategy that falls under the category of business growth

Product development strategy

A company or business unit company can develop new products or services for existing markets

Brand extension

Company or business unit may use a successful brand name to market

Push strategy

May engage in trade promotion to gain shelf space

Pull strategy

May engage in wide consumer advertising design

Financial strategy

Examines the financial implications of corporate and business level strategic options

Equity financing

Corporation can raise capital by selling company stock to investors

Debt financing

Can raise capital by borrowing money to acquire assets

Research and development strategy

Deals with the product and process innovation and improvement

Technological leader

Focuses on pioneering innovation

Technological follower

Deals with imitating the products of the competitors

Open innovation

Newer approach in which a firm uses alliances and connections with corporations, government academic labs

Operation strategy

Determines how and where a product or service is to be manufactured or delivered

Job shop

A small manufacturing system handles customized production using skilled labor

Connected line batch flow

Each machine functions like a job shop but is positioned in the same order

Flexible manufacturing system

Parts are grouped into manufacturing families to produce wide variety of massed produced items

Dedicated transfer line

Highly automated assembly line create a single mass produced product

Mass production systems

Many low cost standardized goods can be produced

Mass customization

People, processes, units, and technology reconfigure themselves to give customers exactly what they want

Quality

Service oriented firms must ensure that they deliver error free service

Flexibility

Must ensure that their service design can handle the multiple demands of the clients

Speed

Must pay attention to their scheduling and capacity planning management

Dependability

Service oriented firm must be consistent in the value that service provides

Cost

Must maintain reasonable prices. For their service

Purchasing strategy

Deals with obtaining the raw materials

Logistics strategy

Deals with the flow of the products and put manufacturing the process

Human resource management strategy

Companies find that having diverse workforce is competitive advantage

Information technology strategy

Corporations have always used an information technology strategies to gig their business units a competitive advantage