Ch 6 - Strategic Management: How Exceptional Managers Realize a Grand Design

BCG Matrix

a management strategy by which companies evaluate their strategic business units on the basis of (1) their business growth rates and (2) their share of the market

Benchmarking

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

Business-Level Strategy

focuses on individual business units or product/service lines

Corporate-Level Strategy

focuses on the organization as a whole

Cost-Focus Strategy

one of Porter’s four competitive strategies; keeping the costs, and hence prices, of a product ors ervice below those of competitors and to target a narrow market

Cost-Leadership Strategy

one of Porter’s four competitive strategies; keeping the costs, and hence prices of a product or service below those of competitors and to target a wide market

Current Reality Assessment

assessment to look at where the organization stands and see what is working and what could be different so as to maximize efficiency and effectiveness in achieving the organization’s mission

Defensive Strategy (retrenchment strategy)

one of three grand strategies, this strategy involves reduction in the organization’s efforts

Differentiation Strategy

one of porter’s four competitive strategies; offering products or services that are of unique and superior value compared with those of competitors but to target a wide market

Diversification

strategy by which a company operates several businesses in order to spread the risk

Execution

using questioning analysis, and follow-through in order to mess strategy with reality, align people with goals, and achieve the results promised

Focused-Differentiation Strategy

one of Porter’s four competitive strategies; offering products or services that are of unique and superior value compared to those of competitors and to target a narrow market

Forecast

a vision or projection of the future

Functional-Level Strategy

plan of action by each functional area of the organization to support higher level strategies

Growth Strategy

one of three grand strategies, this strategy involves expansion - as in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served

Innovation Strategy

grows market share or profits by improving existing products and services or introducing new ones

Organizational Opportunities

environmental factors that the organization may exploit for competitive advantage

Organizational Strengths

the skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission

Organizational Threats

environmental factors that hinder an organization’s achieving a competitive advantage

Organizational Weaknesses

the drawbacks that hinder an organization in executing strategies in pursuit of its mission

Performance Management

a set of processes and managerial behaviors that involve defining, monitoring, measuring, evaluating, and providing consequences for performance expectations

Porter’s Four Competitive Strategies (Four Generic Strategies)

(1) cost leadership, (2) differentiation, (3) cost-focus, and (4) focused-differentiation; the first two strategies focus on wide markets the last two on narrow markets

Porter’s Model for Industry Analysis

model proposes that business-level strategies originate in five primary competitive forces in the firm’s environment: (1) threats of new entrants, (2) bargaining power of suppliers, (3) bargaining power of buyers, (4) threats of substitute products or services, and (5) rivalry among competitors

Related Diversification

when a company purchases a new business that is related to the company’s exisitng business portfolio

Scenario Analysis

the creation of alternative hypothetical but equally likely future conditions

Stability Strategy

one of three grand strategies, this strategy involves little or no significant change

Strategic Control

monitoring performance to ensure that strategic plans are being implemented and taking corrective action as needed

Strategic Positioning

strategy that attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company

Strategy Formulation

the process of choosing among different strategies and altering them to best fir the organization’s needs

Strategy Implementation

the implementation of strategic plans

Sustainable Competitive Advantage

exists when other companies cannot duplicate the value delivered to customers

SWOT Analysis

also known as a situational analysis, the search for the Strengths, Weaknesses, Opportunities, and Threats affecting the organization

Trend Analysis

a hypothetical extension of a past series of events into the future

Unrelated Diversification

occurs when a company acquires another company in a completes unrelated businesses

Vertical Integration

diversification strategy where a firm expands into businesses that provide the supplies it needs to make its products or that distribute and sells its products

VRIO

is a framework for analyzing a resource of capability to determine its competitive strategic potential by answering four questions about its Value, Rarity, Imitability, and Organization