Strategic Management Lecture Review

Flashcards covering key vocabulary and concepts from the Strategic Management lecture.

Values

What an organization stands for.

Vision

What an organization aspires to be.

Mission

What an organization does.

Strategic Planning

A process involving analysis of market size, market segments, competition, and determining current and desired market position.

Strategies

4-6 areas of focus that enable an organization to achieve its vision and mission, representative of its values.

Strategic Plan

A plan typically developed every 3 years, outlining 4-6 strategies, such as achieving growth through technological innovation.

Operational or Tactical Plans

Specific actions that must happen to achieve the strategic plan, typically involving 3 tactics for each strategy.

Tactic

A specific action taken to achieve a strategy, e.g., implementing software to improve production.

Corporate-Level Strategy

Focuses on the organization as a whole; executives generally referred to as the 'C-Suite'.

Business-Level Strategy

Focuses on individual business units or product/service lines; managers implement decisions under consideration from the corporate level.

Functional-Level Strategy

Applies to key functional departments or units within business units; functional managers focus more on tactical issues.

Strategic-Management Process

A five-step process: (1) establish mission, vision, and values; (2) assess current reality; (3) formulate corporate, business, and functional strategies; (4) execute strategies; (5) maintain strategic control.

Environmental Scanning

Monitoring an organization’s internal and external environments to detect early signs of opportunities and threats that may influence firm plans.

SWOT Analysis

A process for environmental scanning that identifies Internal Strengths, Internal Weaknesses, External Opportunities, and External Threats.

Internal Strengths (SWOT)

Organizational capabilities that help achieve objectives.

Internal Weaknesses (SWOT)

Organizational limitations that may interfere with achieving objectives.

External Opportunities (SWOT)

External factors the organization may be able to exploit to its advantage.

External Threats (SWOT)

External factors that could harm an organization's performance.

Forecasting

A vision or projection of the future.

Trend Analysis

Hypothetical extension of a past series of events into the future.

Contingency Planning

Creation of alternative hypothetical but equally likely future conditions.

Benchmarking

A process by which a company compares its performance with that of high-performing organizations.

Growth Strategy (Corporate)

Involves expansion, as in sales revenues, market share, number of employees, or number of customers.

Stability Strategy (Corporate)

Involves little or no significant change in organizational efforts.

Defensive Strategy (Corporate)

Involves reduction in the organization’s efforts, also known as retrenchment.

Retrenchment

A defensive strategy involving reduction in organizational efforts.

BCG Matrix

A tool used in corporate strategic planning to analyze a company's product portfolio based on market growth rate and relative market share.

Porter's Five Competitive Forces

A framework stating that business-level strategies originate in five primary competitive forces: threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threats of substitute products or services, and rivalry among competitors.

Threat of New Entrants (Porter)

One of Porter's five forces, referring to the ease or difficulty with which new competitors can enter an industry.

Bargaining Power of Suppliers (Porter)

One of Porter's five forces, referring to the ability of suppliers to influence the prices of inputs.

Bargaining Power of Buyers (Porter)

One of Porter's five forces, referring to the ability of customers to drive down prices.

Threats of Substitute Products or Services (Porter)

One of Porter's five forces, referring to the likelihood of customers finding different products or services to satisfy the same need.

Rivalry Among Competitors (Porter)

One of Porter's five forces, referring to the intensity of competition within an industry.

Porter's Four Competitive Strategies

Business-level strategies developed by Michael Porter, including cost-leadership, differentiation, cost-focus, and focused-differentiation.

Cost-Leadership Strategy

Keeping the costs, and hence prices, of a product or service below those of competitors and targeting a wide market.

Differentiation Strategy

Offering products that are of unique and superior value compared to those of competitors and targeting a wide market.

Cost-Focus Strategy

Keeping the costs of a product below those of competitors and targeting a narrow market.

Focused-Differentiation Strategy

Offering products that are of unique and superior value compared to those of competitors and targeting a narrow market.