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Definition
| a broad plan of actions for pursuing and achieving the firms objectives and satisfying its mission |
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Term
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| determination of an enterprises basic long term goals and objectives, the adoption of courses of action and the allocation of resources necessary for carrying out these goals |
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traditionally established the top level managers
now more levels of management and employees involve in establishing strategies |
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| 4 steps process for developing strategic plan |
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Definition
asses internal and external environments
establish mission statement
establish goals and objectives
establish operating plan |
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Term
| strategic business unit (sbu) |
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Definition
| a product or service division within a company that establishes goals and objectives in harmony with the firms overall mission and is responsible for its own profits and losses |
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| CHARACTERISTICS OF AN SBU |
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Definition
Distinct mission
its own competitor
single business or collection of business
planned for, independently of the other business of the organization |
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Term
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star
cash cow
question mark
cash trap |
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| sbu that has high market share in a high growth market |
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| sbu with a high market share in a low growth market |
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| sbu that has low market share in a high growth market |
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| sbu that has low market share in a low growth market |
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| strategic choice: harvest |
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| appropriate all sbu's except stars |
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Definition
| getting rid of sbus with low shares of low growth markets |
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Definition
threats of new entrants
substitute products
power of buyers
power of suppliers
internal rivalry |
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Term
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Definition
| Process of examining the organization’s environment, establishing a mission, setting desired goals and objectives, developing an operating plan and developing a portfolio plan Developing a time oriented sequence of activities directed towards attaining specified goals |
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−All activities an organization performs to create values for a customer
−Provides framework for analysis of primary and support activities in determining the cost structure of an organization |
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Term
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Definition
§Process of examining the organization’s environment, establishing a mission, setting desired goals and objectives, developing an operating plan and developing a portfolio plan
§Developing a time oriented sequence of activities directed towards attaining specified goals |
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Term
| A systematic, thourough analysis requires attention to four things in order to asses its current situation |
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Definition
SWOT analysis
Strenghts, Weaknesses, Opportunities, Threats |
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Term
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Definition
| anything that has the potential to increase the firms strenghts |
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| anything that has the potential to hurt or even destroy a firm |
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−Changes that are a part of cultural development |
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Definition
| the acqusition and use of information about events and trends in an organizations external environment, the knowledge of which would assist management in planning the organizations future courses of action |
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| TECHNOLIGICAL DEVELOPMENTS |
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Definition
−Increasing reliance on computers |
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−Businesses must be prepared for volatile, even revolutionary changes |
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−ECONOMIC CONDITIONS: Need to appreciate global conditions keeps the organization competitive
−10 Drivers: |
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Definition
1.Speed
2.Convenience
3.Demographics
4.Lifestyles
5.Choices
6.Discounting
7.Value adding
8.Customer Service
9.Technology
10.Quality |
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Term
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Definition
−Mission should be firm’s long-term vision of what the firm is trying to become
−“Vision”- what we want to look like in the future.
−Provides direction and a sense of purpose to all employees |
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FACTORS TO BE CONSIDERED WHEN ESTABLISHING A MISSION
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Definition
−HISTORY: Mission should be consistent with past experiences of the organization
−DISTINCTIVE COMPETENCE: A capacity that is unique to the organization and is valued in the market
−ENVIRONMENT: Contains both the opportunities for success and the threats for potential market failure |
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| CHARACTERISTICS OF A MISSION STATEMENT |
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Definition
−CONSUMER FOCUSED: Purpose of the organization is expressed by whom the organization serves rather than what the organization produces.
−ACHIEVABLE: Realistic assessment of what the company intends to accomplish
−MOTIVATIONAL: Mission must be the source of motivation for organization participants
−SPECIFIC: A quality-based mission must provide specific and focused direction for organizational participants |
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| ESTABLISHING GOALS AND OBJECTIVES |
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Definition
−Effective goals must be specific, measurable, and convertible into short-term objectives that are challenging but attainable |
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−Broad plan of action for pursuing and achieving a firm’s goals and satisfying its mission |
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−COMPETITIVE STRATEGY MODEL: Developed by Michael Porter |
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Definition
| According to the competative strategy model, organizations can develop distinctive competence in three ways: differentiation, cost leadership, and niche |
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| Competition is based on unique differences that can demand high prices |
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| Competition is based on being a low cost manufacturer and seller |
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| Competition is based on narrow focus on either cost-based competition or competition based on narrowly interpreted differentiation |
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Definition
Renewed emphasis on quality and competitiveness is driving
strategy
will look at how strategy impacts stakeholders (internally/externally |
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−Any person or group that has the ability to influence the organization’s ability to set and attain goals |
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−Union workers, managers, and non-union workers are seen as assets that must be maintained, enhanced, and accounted for
−Managers need to be aware of initiative burnout or the anxiety developed because of the anticipation of more new changes |
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−End users of the product or service
−Organization needs to understand who their customers are and the nature or their product or service expectations |
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−Quality products rely on quality suppliers
−Organizations must develop strategies for supplier management |
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−Quality organizations need to consider how best to meet both customer and stockholder expectations |
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Definition
−Organizations are a part of the community and must be aware of opportunities that community provides as well as its responsibility towards the community |
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| TOTAL QUALITY ENVIRONMENTAL APPROACH (TQEM |
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Definition
−Forming alliances with other organizations for the purpose of working together to solve common problems |
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