Strategy
A comprehensive action plan that identifies long-term direction for an organization and guides resource utilization to accomplish organizational goals with sustainable competitive advantage.
Strategic Intent
Focusing all organizational energies on a unifying and compelling goal (e.g., expanding in 5 years).
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Strategy
A comprehensive action plan that identifies long-term direction for an organization and guides resource utilization to accomplish organizational goals with sustainable competitive advantage.
Strategic Intent
Focusing all organizational energies on a unifying and compelling goal (e.g., expanding in 5 years).
Strategic Management
The process of formulating and implementing strategies to accomplish long-term goals and sustain competitive advantage.
Corporate Strategy
Sets the long-term direction for the total enterprise.
Business Strategy
Identifies how a division or business unit will compete in products/services.
Functional Strategy
Guides activities within one specific area of the business.
Corporate Strategy Level
Sets a long-term direction for the organization as a whole (e.g., Coca-Cola Company); Main Question: In what industries and markets should we compete?
Business Strategy Level
Each business unit or product line is a strategic business unit (SBU); Main Question: How are we going to compete for customers in this industry and market?
Functional Strategy Level
Focuses on how to effectively use resources within departments like marketing, finance, operations; Main Question: How can we best support the business strategy?
Step 1 of Strategic Planning Process
Identify mission and objectives: Define the organization’s reason for existence and guiding values.
Step 2 of Strategic Planning Process
Analyze internal and external environments. Identify core competencies that provide a competitive advantage.
Step 3 of Strategic Planning Process
Formulate strategy based on mission, objectives, and environmental analysis.
Step 4 of Strategic Planning Process
Implement the formulated strategy through organizational actions and resource allocation.
Step 5 of Strategic Planning Process
Evaluate results and control: Monitor performance and make necessary adjustments.
PEST Analysis
Analyzes Political, Economic, Social, and Technological external factors that impact the organization.
P in PEST
Political factors such as political stability, trade policies, regulations, taxation, labor laws, safety regulations.
E in PEST
Economic factors like growth, stagnation, interest and exchange rates, recession, inflation.
S in PEST
Social factors including demographics, culture, health consciousness, population growth, education, attitudes toward work and leisure.
T in PEST
Technological factors such as new discoveries, technological developments, and obsolescence.
Purpose of PEST Analysis
Used to identify opportunities and threats in the external environment.
Porter’s 5 Forces
Framework to assess industry competition: threat of new entrants, bargaining power of suppliers, bargaining power of customers, threat of substitutes, industry rivalry.
Threat of New Entrants
Barriers include economies of scale, access to distribution, government policy, and industry experience.
Supplier Power
Determined by number and size of suppliers, uniqueness of services, and switching costs.
Buyer Power
Influenced by the number of customers, product importance, availability of alternatives, and switching costs.
Threat of Substitutes
The likelihood that customers will switch to alternative products or services.
Industry Compeition
Intensity of competition among existing firms based on price, innovation, marketing, and customer loyalty. (porters 5 forces)
Steps in Planning Process
Mission Statement
Defines a company’s reason for existence, aligns strategy, inspires support, and guides resource allocation.
Growth Strategy
Seeks to increase size and expand current operations.
Stability Strategy
Aims to maintain current operations without major changes.
Renewal Strategy
A defensive strategy to resolve problems and improve performance.
Combination Strategy
Pursues two or more strategies simultaneously.
Market Development
Expands market by attracting new customers or entering new geographic markets.
Product Development
Introduces new products or improves existing ones to meet market demands.
Horizontal Integration
Acquiring or merging with a competitor in the same industry.
Vertical Integration
Acquiring suppliers or distributors to control the supply chain.
Conglomerate Integration
Acquiring businesses in unrelated industries to diversify.
Strategic Alliances
Partnerships with another company for mutual benifit.
E-Business Strategy
Uses the internet strategically to gain a competitive advantage.
Brokerage Model
Brings buyers and sellers together online to facilitate transactions (e.g., carsdirect.com).
Advertising Model
Generates revenue by offering free content or services supported by ads (e.g., Yahoo, Google).
Merchant Model
Sells goods and services directly to consumers online (e.g., Indigo Books).
Subscription Model
Provides paid access to content or services through memberships (e.g., NYTimes, WSJ).
Infomediary Model
Collects user data and sells insights to businesses (e.g., ePinions).
Community Model
Relies on user donations and participation to operate (e.g., Wikipedia).