Untitled Flashcards Set

Defining strategic management

• Strategic management is the process of defining an organization’s strategy, making decisions on allocating resources to pursue this strategy, and taking actions to achieve strategic goals.

Each stage of the strategic management process (formulation, implementation, evaluation)

• Formulation: Developing the organization's mission, vision, values, and strategies.

• Implementation: Executing the chosen strategies through resource allocation, developing capabilities, and aligning the organization.

• Evaluation: Assessing the outcomes of the strategy, comparing actual performance with intended performance, and making adjustments as necessary.

SWOT analysis

• Definition: A strategic planning tool to identify Strengths, Weaknesses, Opportunities, and Threats related to the internal and external environment.

  • Strengths: Internal attributes that are beneficial.

  • Weaknesses: Internal attributes that are harmful.

  • Opportunities: External factors that the organization can exploit.

  • Threats: External factors that could cause trouble.

Competitive advantage and sustained competitive advantage

• Competitive Advantage: Unique attributes or conditions that allow an organization to perform better than its competitors.

• Sustained Competitive Advantage: Advantages that endure over time due to the firm's ability to adapt and maintain its position against competitors.

Long term objectives

• Goals that an organization aims to achieve over an extensive timeframe, typically 3-5 years, providing direction and a standard for evaluating success.

Benefits of strategic management

• Improved decision-making

• Enhanced organizational performance

• Better alignment and clarity of purpose

• Proactive attitude towards future opportunities and challenges

Vision and mission statements

• Vision Statement: A future-oriented declaration of the organization's purpose, what it desires to achieve in the long run.

• Mission Statement: A concise explanation of the organization’s fundamental purpose, outlining what it does, for whom, and how.

Core value statements

• Fundamental beliefs or guiding principles that dictate behavior and action within the organization.

Core competencies

• Unique strengths and resources of an organization that differentiate it from competitors and provide a competitive advantage

External audit

• A comprehensive review of external factors affecting an organization, often using frameworks like PEST analysis.

Porter's five forces

• Framework for analyzing industry competition:

  • Threat of new entrants

  • Bargaining power of suppliers

  • Bargaining power of buyers

  • Threat of substitute products or services

  • Intensity of competitive rivalry

Conditions that cause high rivalry among firms

• Numerous or equally balanced competitors

• Slow industry growth

• High fixed costs

• Low differentiation between products

• High exit barriers

External forces (PEST)

• PEST Analysis: A framework for analyzing the external environment based on:

  • Political: Government actions and regulations.

  • Economic: Economic factors such as growth rates and inflation.

  • Social: Societal trends and demographics.

  • Technological: Innovations and technological advancements.

AQCD test

• Definition: A test used to evaluate strategic options based on:

  • Acceptability

  • Quality

  • Cost

  • Delivery

EFE matrix

• A tool to evaluate the external factors affecting an organization by scoring and weighting them based on their importance.

Competitive profile matrix (CPM)

• A tool used to evaluate a firm's strengths and weaknesses against key competitors in the industry based on critical success factors.

Internal audit

• An assessment of internal factors affecting the organization, analyzing strengths and weaknesses in various areas such as resources, capabilities, and processes.

Resource based view (tangible vs intangible assets)

• A perspective suggesting that the key to competitive advantage lies in the firm’s internal resources, emphasizing both tangible and intangible assets.

Distinctive competencies

• Unique capabilities that provide a competitive edge, often more specialized than core competencies.

Primary Internal concepts (Culture, management, production, marketing, finance, analytics)

• Includes the fundamental areas of business:

  • Culture: Organizational beliefs and behaviors.

  • Management: Leadership and strategic direction.

  • Production: Operations and manufacturing processes.

  • Marketing: Strategies for promoting and selling products.

  • Finance: Management of financial resources.

  • Analytics: Data analysis for informed decision-making.

Internal factor evaluation matrix

• A tool for assessing internal strengths and weaknesses, allowing for scoring and weighting to analyze the firm's internal environment effectively.