BCG matrix
Boston Consulting Group
Evaluates businesses relative to the growth rate of their markets and their individual market shares
Classifies the types of business of a diversified organization's portfolio
Dogs - having small market shares and no growth prospects Cash
Cows - having large shares of mature markets
Question marks - have only a small market share in quickly growing markets
Stars - having large shares of rapidly growing markets
Strategic Choices BCG Matrix
Dogs - Retrenchment (down size products/people) Divesture, liquidation
Cash Cows - Product development, diversification, divesture, retrenchment
Question Marks - Market penetration, market development, product development, divesture
Stars- Vertical integration, horizontal integration, market penetration, market development, product development
Business level strategies
The strategic alternatives from which an organization chooses as it conducts business in an industry or a particular market.
Controls for International Business
Tariff Quota Export restraint agreement (voluntary limit)
Corporate level strategies
The strategic alternatives from which organization chooses as it manages its operations simultaneously across several industries and several markets.
Diversification
The number of different businesses that an organization is engaged in and the extent to which these businesses are related to one another
Related Diversification
multiple products or businesses that correlate and can be mutually beneficial
Unrelated Diversification
Multiple products or businesses that have to relation or synergy
ex Quaker oats selling oats and clothes
Distinctive Competence
something an organization does exceptionally well
Ex - making superior quality goods
Key Components of Strategy
Distinctive Competence Scope Resource Deployment
Resource Deployment
how an organization will distribute its resources in areas in which it competes.
Scope
range of markets in which an organization will compete
Effective strategy
Promote a superior alignment between the organization and its environment and the achievement of its goals.
Internal environment
conditions and forces within an organization
External Environment
General and Task environment
What does the Economic dimension tell us? Economic dimension is the health of the economic system in which the organization operates Some key indictions for managers: Unemployment rate GDP Inflation Unemployment - when it's high = economic recession, easy to find workers
when it's low = economic prosperity, hard to find workers
General Environment
is a set of broad dimensions and forces in an organization's surroundings that determine its overall context
Economic Dimension Technological Dimension Sociocultural Dimension Political-Legal Dimension International Dimension
Task Environment
is composed of specific groups and organizations that affect the firm
Competition Customers Suppliers Regulators (agencies and interest groups) Strategic Partners (allies)
Ethical standards of behavior
typically conforms to generally accepted moral, social norms.
Globalization
the worldwide movement towards economic, financial, trade, and communication integration
Actions or processes that involve the entire world and result in making something worldwide in scope.
the increase in the flow of goods, services, capital, people, and ideas across international boundaries
Purposes of Goals
Guidance and unified directions Promotion of good planing Source of motivation Evaluation and control
Organizational Goals by Level
Mission statement Strategic goals Tactical goals Operational goals
Organizational Goals by Area
Operations Marketing Finance Production
Organizational Goals by Time Frame
Long-term goals (strategic) Intermediate goals (tactical) Short-term goals (operational) Explicit goals Open-ended goals
Growth of international business (globalization)
advantages and levels
International business advantages
market access demand profitability competitive advantage risk mitigation global competition
Levels of international business
Exporting Importing Licensing Strategic Alliance & Joint Ventures Direct Investment
Kinds and levels of managers
Top Managers
executives, manage overall goals
Middle Managers
Largest group, implement top managers goals, supervise low lvl managers
First-Line Managers
supervise and coordinate the activities of operations employees
Levels of international business activity
Exporting Importing Licensing Strategic Alliance & Joint Ventures Direct Investment
Management activities
Planning/Decision Making Organizing Leading Controlling
Efficency & Effectiveness
Management functional areas
planning and decision making (setting & achieving goals)
organizing (how to group activities & resources)
leading (motivating others)
controlling (monitoring & correcting activities)
Management perspectives Classical
consists of two distinct branches
scientific management
administrative management
growth of large businesses created interest on how best to operate them
Classical - scientific management
Frederick Taylor, Gilbreth
concerned with improving the performance of individual workers
Classical - Administrative management
Focuses on managing the total organization
Fayol, Urwick, Weber
Planning, organizing, leading, controlling
Management Perspectives Behavioral
Emphasizes individual attitudes, behaviors, and group processes
Focus on individuals as people and not treat them as tools or machines
Hawthorne Studies
Human relations Movement - argues that workers respond primarily to the social context of the workplace
theory x and y
Hawthorne Studies
aimed to see how workplace conditions such as lighting and an incentive pay scale influenced productivity
special attention attributes to better work (behavioral)
HR Movement
Proposed that workers respond primarily to the social context of work, including social conditioning, group norms, and interpersonal dynamics.
Assumed that the manager's concern for workers would lead to increased worker satisfaction and improved worker performance
Theory X
"A pessimistic and negative view of workers, consistent with the views of scientific management"
Theory Y
"A positive view of workers it represents the assumptions that human relations advocates make"
Organizational Behavior
Focuses on behavioral perspectives.
Draws on psychology, sociology, and anthropology, economics, and medicine
Management Perspectives Quantitative
emerged from WWII, used math to solve management problems
management science
Operations Management
practical application of management science to efficiently manage the production and distribution of products and services
concerned with equality
Management science perspective
focuses on mathematical systems and equations(quantitative)
Management Perspectives Contemporary
saw value in theories and attempts to integrate these to solve problems
systems perspective
Systems Perspective
focuses on an interrelated set of elements functioning as a whole (family)
inputs -> transformation process -> outputs -> feedback
if a business does not interact with it's environment (take in imports and exports) it will use it's own resources and effectively die
(Contemporary)
Management skills
technical interpersonal conceptual diagnostic communication decision making time management
Management theories (within each of the management perspectives) understand what the main idea is.
C Scientific Management Admin Management
B Hawthorne Studies HR Movement McGregor- Theory X & Y Organizational Behavior
Q Management Science Operations Management
Cont Systems Perspective
Operational planning
made up of -single-use plans -standing plans -contingency planning and crisis management
Single Use Plans
made up of: programs-for a large set of activities projects-less scope and complexity
developed to carry out a course of action that is not likely to be repeated in the future
Standing Plans
Policies, standard operating procedures, and rules n regulations
Contingency Planning and Crisis Management
contingency planning- the determination of alternative courses of action if an intended course of action is not enough or not working
crisis management- set of procedures the organization uses in the event of a disaster or other unexpected calamity
Organization's culture
behavioral processes vary widely across cultural and national boundaries.
Product life cycle
Introduction - New hires, inventory, product out, lower sales, developing inventory
Growth - Quality, differentiate, new entrants
Maturity - Slow growth, costs, R&D, New product
Decline - Demand slows, sales drop, differentiate, replacement, low costs
Social responsibility.
Is a firms leadership's intention, beyond their legal and economic obligations, to do right things and act in ways that are good for society.
Strategic planning process
A process that helps an organization allocate its resources under different conditions to accomplish its objectives, deliver value, and be competitive in a market-driven economy
SWOT analysis
Strengths Weaknesses Opportunities Threats
intends to formulate strategies that support the mission
Business Level Strategies
differentiation - different/unique
cost leadership - cheapest or leads the cost in the market
focus- targets a buyer
Corporate Level Strategies
Single Product Strategy
Only one Product is made (WD40)
Related Diversification
Multiple products or business that correlate and can be mutually beneficial
Unrelated Diversification
Multiple products or business that have no related or synergy
Matching questions will cover:
Management Theories within each of the Perspectives we explored in Chapter 1.
The General and Task environments
Business and corporate level strategies