MGT 202 Exam 2

Competitive Advantage

An organization's ability to use resources so well that it performs better than the competition

Technology

Using technology to gain operating efficiencies, market exposure, and customer loyalty

Cost & Quality

Operating with greater efficiency & product or service quality

Knowledge & Speed

Doing better at innovation & speed of delivery to market for new ideas

Barries to Entry

Creating a market stronghold that is protected from entry by others

Financial Resources

Having better investments or loss absorption potential than competitors

sustainable competitive advantage

Competitive advantage that is durable & difficult or costly for others to copy or imitate

Strategy

A comprehensive action plan that identifies the long term direction for an organization and that guides resource utilization to achieve sustainable competitive advantage

Strategic Intent

All energies directed toward accomplishing a long term target/goal

3 Levels of strategy

Corporate, Business, and Functional

Strategic Management

the process of formulating and implementing strategies to accomplish long-term goals and sustain competitive advantage

Strategic Analysis

To assess the organization, its environment, its competitive positioning, & its competitive strategies

strategy formulation

Developing a new or revised strategy

strategy implementation

Using resources to put strategies into action, and then evaluating results so then the implementation can be improved or the strategy changed

Mission

An organization describes its reason for existence in society

Stakeholders

Including customers, shareholders, employees, suppliers, creditors, community groups, future generations, and others - who are directly affected by the organization & its accomplishments

Core values

are broad beliefs about what is or is not appropriate behavior

Organizational culture

the predominant value system for the organization as a whole

Operating objectives

Direct activities toward key performance areas

What are operating objectives?

Profitability, sustainability, social responsibility, financial health, cost efficiency, customer service, product quality, market share, human talent, and innovation

SWOT

strengths, weaknesses, opportunities, threats

SWOT Analysis

Useful first step in analyzing the organization & its environment

Core Comptencies

Things that the organization does exceptionally well in comparison with competitors

Five Forces Analysis of Industry

Industry competition, new entrants, substitute products/services, bargaining power of suppliers, and bargaining power of customers

Boston Consulting Group(BCG) Matrix

A widely accepted & well-understood foundation for understanding the portofino planning approach to strategic resource allocation decisions

Growth Strategies

Seek to expand the size & scope of operations

Concentration

Expanding within the same business

Diversification

Expanding into different business areas

Vertical Integration

Where a business moves upstream to acquire its suppliers

Retrenchment, restructuring, & turnaround strategies

Pursue radical changes to solve problems

Chapter 11 Bankruptcy

Under U.S. law, gives firms protection while they organize to restore solvency

Liquidation

where a business closes and sells its assets to pay creditors

Downsizing

Decreases the size of operations, often by drastically reducing the workforce

Diverstitute

Involves selling off parts of the organization to refocus what remains on core competencies, cutting costs, and improving operating efficiency

Turnaround

An attempt to fix an organization's specific performance problems

Globalization Strategy

Tends to view the world as one large integrated market

Multi-domestic Strategy

Try to customize products & advertising as much as possible in order to fit local preferences in different countries or regions

Transnational strategy

Where a firm tries to operate without a strong national identity & blend seamlessly with the global economy

Strategic Alliances

Where two or more objectives join in a targeted partnership to pursue an area of mutual interest

Co-opetition

Organizations can still cooperate even as they compete with one another

Differentiation Strategy

Seeks competitive advantage through uniqueness

Cost Leadership Strategy

Seeks competitive advantage by operating with lower costs than competitors

Focus Strategy

Concentrates attention on a special market segment in the form of a niche customer group, geographical region, or product/service line

Focus Differentiation Strategy

Firms sell a unique product to a special niche market

Focused Cost Leadership

Offers low prices to attract budget travelers

lack of participation error

Lack of commitment to action & follow through by individuals excluded from the strategic planning process

Strategic Control

Making sure strategies are well implemented & that poor strategies are scrapped or modified quickly to meet performance demands of changing conditions

Corporate Governance

System of control & monitoring of top management performance exercised by boards of directors in business firms & boards of trustees in nonprofits

Strategic Leadership

The capability to inspire people to successfully engage in a process of continuous change, performance enhancement, & implementation of organization strategies

Technological Competency

The ability to understand new technologies & to use then to their best advantage

Information Competency

The ability to locate, gather, organize, and display information

Analytical Competency

The ability to evaluate & analyze information to make actual decisions and solve real problems

Information

Data made useful & meaningful for decision making

5 qualities of information

Timely, high quality, complete, relevant, understandable

Management Information Systems

Use the latest technologies to collect, organize, & distribute data

3 Management Information Systems

Intelligence, Internal, and public information

Data mining

The process of analyzing data to produce useful information for decision makers

Big Data

Collected in huge quantities & is difficult to mine without using sophisticated mathematical & analytical techniques

Analytics

The systematic evaluation & analysis of data for their own informed decisions

Business Intelligence

The process of tapping or mining information systems to extract data that is most potentially useful

Executive Dashboard

Visually display & update key performance metrics in the form of graphs, charts & scorecards in real time

Problem Solving

The process of identifying a discrepancy between an actual & a desired state of affairs, and then taking corrective action to resolve the problem

Decisions

Choices among alternative possible courses of action

Performance Threat

Something is already wrong or has the potential to go wrong

Performance Opportunity

Offers the chance for better future performance if the right steps are taken

Problem Avoiders

Ignore information that would otherwise signal the presence of a performance opportunity or threat

Problem Seekers

Who constantly process information & proactively look for problems to solve, even before they occur

Systematic Thinking

Individuals approach problems using a rational, step-by-step, analytical process

Multidimensional Thinking

An ability to view many problems simultaneously, in relationship to one another and across both long & short time horizons

Strategic opportunism

The ability to remain focused on long-term objectives while being flexible enough to resolve short-term problems & opportunities in a timely way

Controlling

The process of measuring performance and making sure that plans turned out as intended

4 types of controlling

Planning, organizing, controlling, and leading

After - action Review

A process for a structured review of lessons learned & results accomplished in a completed project, task force, assignment, or special operation

Free Forward Controls

They ensure that objectives are clear, that proper directions are established, and that the right resources are available to accomplish the objectives

Concurrent Controls

They make sure objective-focused actions are executed according to plan

Feedback Controls

They focus on the quality of end results rather than on inputs & activities

Self-control

This means helping people to be good at self-management, giving them freedom, & encouraging them to have self-discipline in performing their jobs

Resiliency

The ability to call on inner strength & keep moving forward even when things are tough

Bureaucratic control

Control that flows through the organization's hierarchy of authority

Clan Control

Influences behavior through norms & expectations set by the organizational culture

Market control

The influence of customers & competition on the behavior of organizations & their numbers

4 steps of control process

1. Establish standards 2. Measure performance 3. Compare results 4. Take action

Importance of planning

Planning, organizing, leading, controlling

The planning process

Define objectives, determine where you stand, develop premises, analyze alternatives, and implement the plan

Objectives/Goals

Specific results that are wishes to achieve

Stretch Goals

Are performance targets that one must work extra hard & stretch to reach

Plan

A statement of intended means for accomplishing objectives

Complacency Trap

Being carried along by the flow of events

Long-term plans

Typically look three or more years into the future

Short-term plans

Typically cover one year or less

Strategic plans

identifies long-term directions for the organization

Vision

Clarifies the purpose of the organization & expresses what it hopes to be in the future

Tactical Plans

Helps to implement all or parts of a strategic plan

Functional plans

indicate how different operations within the organization will help advance the overall strategy

Functional plans include

Production, financial, facilities, logistics, marketing, and human resource

Operational Plans

Identifies short term activities to implement strategic plans

Policy

a standing plan that communicates broad guidelines for decisions and action

Procedure

a rule describing actions that are to be taken in specific situations

Budgets

a plan that commits resources to projects or activities

Zero-based budget

allocates resources as if each budget was brand new