1-2 - Strategy

James Pavey
Flashcards by , created almost 2 years ago

Business Policy (Strategy & Strategic Guidance) Flashcards on 1-2 - Strategy, created by James Pavey on 12/22/2017.

James Pavey
Created by James Pavey almost 2 years ago
Exploring Strategy model
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Q5 - Compare and contrast Porter’s concept of the three generic competitive strategies with Bowman’s Strategy Clock
Special Senses
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Time for Business sample
Question Answer
What 3 questions does strategy answer? 1. Who are the company's target customers? 2. What products/services should the company offer? 3. How can the company do this effectively?
What does Porter (1996) say strategy is about? Being different, offering activities that deliver unique value
Resources Inputs into a firm's production process. Financial, physical, human, technological & reputational. Costly to imitate.
Capabilities The capacity for a set of resources to perform a task or an activity in an integrative manner. Evolve over time and must be managed dynamically in pursuit of above-average returns
Above-average returns Returns in excess of what an investor expects to earn from other investments with a similar amount of risk. Understanding how to exploit a competitive advantage is important for firms seeking to earn this.
How does culture help strategy? Culture helps workers conform to the strategic position of the organisation. Helps embrace mission, vision and values. Strategy success is dependent on organisational alignment.
What is strategy? An integrated & coordinated set of commitments and actions. Supports a set of tangible organizational goals.
Competitive Advantage Where the organisation meets customers needs BETTER than its rivals - superior value.
Sustainable competitive advantage Competitors are unable to duplicate or find too costly to try to imitate.
What is strategy about? Identifiying key challenges and providing an approach to overcome them. An exercise in problem-solving - challenge MUST be identified in order to be evaluated.
Strategic Management Process The full set of commitment, decisions, and actions required for a firm to achieve strategic competitiveness and earn above- average returns Analyse > Formulate > Implement
Strategic Management Process - Analyse Situational Analysis - General & competitive environment Identify SWOT
Strategic Management Process - Formulation Creation of long-term objectives. Choose between strategic alternatives based on results of situation analysis
Strategic Management Process - Implementation Implement the strategy. Setting objectives, revising policies, allocating resources, changing organizational structure, managing change.
Values Values do not change. The guiding principles of an organisation
Vision Represents the desired states an organisation wishes to attain. Often associated with the founder of an organisation. Visions are forward-looking.
Mission The reason for the company's existence. Specifies the present business in which the firm intends to compete and customers it intends to serve.
Drucker (1995) The Theory of Business Why organisations encounter difficulties when the assumptions on which they are based on (mission), no longer fit reality. External and internal assumptions.
2 ways to prevent your theory of business becoming obselete 1. Abandonment 2. Adaptation
Theory of Business: Abandonment Inward looking. Knowing what you know now, would you still be in the same business?
Theory of Business: Adaptation Outward looking. Looking at what is happening outside the business, with non-customers. Why are they not using your business?
Corporate Strategy Outlines overall strategy. Defines what markets to operate in. Plans how to enter these markets.
Business Strategy How an organisation will compete in chosen industry/markets. Define specific tactics for each market How each business unit will delivery tactics
Functional strategy Day to day actions to deliver business strategy. How functional objectives will be met & monitored. Interfunctional coordination
Stakeholder Individuals and groups who can affect and are affected by an organisations strategy. Capital market, product market, organisational, institutional.
Stakeholders: Capital market Shareholders, banks
Stakeholders: Product market Customers, suppliers
Stakeholders: Organizational Employees, managers
Stakeholders: Institutional Regulators, policy makers