Flashcards
Strategic Planning
Cards in this deck (38)
- 1Explain the concept of StrategyIn order to attain a sustainable competitive advantage in this ever-changing world, the organisation needs a clear roadmap, which is the strategy of the organisation, to give direction as to how to attain the organisation's strategic objectives. It also serves as a guide for decision making and it unites and motivates staff towards a common goal.
- 2Explain the concept of Strategic PlanningIt is about analysing the internal (identify resources and capabilities + strengths and weaknesses) and external (identify opportunities and threats) environment in which one operates, then plan on how all the skills and resources will be pulled together in order to achieve the organisations' long-term strategic objectives. This process will need to be revisited continuously in order to make adjustments should change in the environment requires it.
- 3The new perspective approach to strategy is also known asThe Strategy-as-Practice approach
- 4What is the difference between an Intended(deliberate) Strategy and an Emergent StrategyAn intended strategy is a strategy that an organization hopes to execute. Intended strategies are usually described in detail within an organization’s strategic plan.
An emergent strategy is an unplanned strategy that arises in response to unexpected opportunities and challenges. - 5What are the drivers of the Strategy-as-Practice approach* The rise in Emergent Strategies due to our ever-changing environment.
* More people, from all levels of the organisation, are involved in the strategising process. - 6Explain the structure to the Traditional Process Perspective to Strategic Management* Strategic Planning/Formulation
> decide on strategic direction & long-term objectives
> Analyse internal & external environment
> Selecting appropriate competitive strategies
* Strategy Implementation or executive requirements
> Leadership & Culture
> Implementation competencies
> Learning organisation
> Systems, policies & Procedures
> Organisational architecture & structure
* Strategy review, feedback & control
> Control measures ensuring that strategies are on track - 7What are the (4) criticisms against Traditional Proces Perspective* It is rational & linear and does not effectively embrace new competitive realities
* Because of the linear approach, the complex & dynamic nature of the external environment are not fully considered
* Strategy formulation and strategy implementation is seen as separate phases
* It supports the notion that strategies are only developed by top management and/or senior staff. Thus, ignore valuable contribution from the staff at all levels. - 8What are the (4) insights and realities with regards to the New Perspective on Strategic Management aka Strategy-as-practice* Strategy is what people do, not what organisations have
* Strategy is not sole the domain of top and executive management
* Strategic Management is not a neat and rational process
* Strategy is a conversation and involves dialogue & communication - 9Strategic management and decision making take place at different levels in the organisation. Name the (3).* Corporate Level Strategy
* Business Level Strategy
* Functional Strategy - 10Explain what is meant by Corporate Level Strategy as an level for strategic management and decision making* Decision are made with regards to the growth path of corporations.
* The goal is to increase shareholder value.
* Decisions are made by the board of directors
* Decisions are with regards to things such as mergers, acquisitions, internationalisation, etc. - 11Explain what is meant by Business Level Strategy as an level of strategic management and decision making* This type is focused on a single business or business unit
* Focus is on achieving a competitive advantage within its own market.
* It supports coproprate level strategies because its success will increase corporate's success. - 12Explain what is meant by Functional Strategy as an level of strategic management and decision making* Functional Management, in the functional area e.g. marketing, makes the decisions
* It is developed to support the implementation of business level strategies.
* Functional strategies refers to strategies such as e.g. human resource or marketing strategies. - 13What are the (9) characteristics of Strategic Decisions.* Typically taken at higher organisational levels
* Contribute to and are directed by the organisation's vision
* Impact directly on an organisation's long-term direction, performance and sustainable success.
* Optimally exploit the links between the organisation's internal and external environments
* Require large amounts of the organisation's resources
* Are usually irreversible once made
* Are entirely future-oriented and likely to affect the whole organisation
* are shaped by the values and expectations of stakeholders.
* Usually have multifunctional or multi-business consequences - 14What are the (2) factors strategic decisions are influenced by?* Cognitive and
* Rational Aspects - 15What are the importance, benefits and risks of a strategy* it is a logical description of the company's future direction
* It takes into consideration the views of many members of the organisation and communicates the conclusions back to the organisation so that everyone conducts business with the same end goal in mind
* Provides a framework of decision-making
* Provides an actionable blueprint for achieving the organisation's goals and objectives.
* Strategic risk is a range of external events that can derail the organisation's path to growth and shareholder value - 16Explain the Traditional Process Approach on Strategic Management* Traditionally it drew on the perspective that management task consists of planning, organising, leading and controlling.
* Strategic tasks for top management consists of formulating a strategy (planning), implementing strategy (organising and leading) with the help of middle managers and the rest of the organisation.
* It can be described as a rational approach that organisations use to achieve strategic competitiveness and competitive advantage. - 17What are the elements of Strategic Formulation (thinking part of the strategy)* Strategic direction - from vision & mission
* Strategic objectives - long-term in nature with measurable outcomes
* External Environment Analysis - identify opportunities and threats outside the organisation
* Internal Environment Analysis - identify resources and capabilities as well as strengths and weaknesses
* Strategic choice - selection of a robust strategy - 18Which model can be used to analyse the macro environmentPESTLE/G
* Political - legal factors - a country's legal system and law enforcement provide business security.
* Economic factors - GDP, GNP, disposable income, purchasing power, unemployment rate, etc.
* Socio-cultural factors - Existing & changing social values, beliefs attributes, traditions and lifestyles in society, which affects demand and preference
* Technological factors - technological change can both be innovative and disruptive. Managers need to ensure their business is ready for any technological change.
* Environmental factors - Global warming and climate change - air, water and land is at risk of pollution
* Global tectonics - countries opening their borders to trade - 19Provide (4) types of industry structures* Monopoly - state-owned with a total advantage. The market is stable and predictable. High barriers to exit and entry, with a low degree of competition
* Duopoly
* Oligopolistic - Few large organisations each with substantial market share. Significant barriers to exit and entry, with a moderate degree of competition.
* Monopolistic & Perfect Competition
> Monopolistic - more rivals of a similar size, results in less stability and short-term competitive advantage. More intense competition.
> Perfect competition - the market is volatile with frequent entries and exits of players. A large number of similar firms with no barriers to entry and exist. - 20What are the (6) forces of industry attractiveness* Customers - Customer buying power increase industry competitiveness and reduce industry profitability.
* Suppliers - Powerful suppliers can increase industry competitiveness and reduce industry profitability
* Existing competitors - Increase industry competitiveness and reduce profitability. The degree of rivalry is dependent on industry growth rate as well as the number of players.
* Potential competitors and threats of entry - ease of entry will increase competitiveness.
* Substitute products & Services
* Government intervention - It could enhance (deregulation) or constrain (e.g. nationalisation, competition policy) - 21What are the (6) barriers to entry into a market* Capital required
* Access to distribution
* Cost disadvantanges not related to size
* Economies of Scale
* Government legislation and regulation
* High switcing costs - 22What are the (4) methods or techniques for macro-environmental analysis* Scanning - detect early signs of potential environmental changes.
* Monitoring - observe potential change that has been identified to see if any trends emerge.
* Forecasting - develop projections that indicate what might happen and how quickly due to the changes and trends identified.
* Assessing - determine the timing, importance and implications of the changes for organisation's strategies and their management. - 23Why are the Resouces, Capabilities and Core Competencies so important in Strategy formulation?* Resources
> These productive assets can be grouped into the following 5 categories:
# Capital resources
# Physical capital resources
# Human capital resources
# Organisational capital resources
# Technological capital resources
*Capabilities
> It refers the organisation's resource coordinating skills and productive use.
> They are the organisational structure, processes, control system and hiring system, which are used to create value
*Core Competencies
> It is a combination of resources and capabilities that provide a competitive advantage, which sets it apart from other organisations in the industry. - 24RBV stands forResource-Based View
- 25Explain RBV and it's role in the internal analysis* It is a model that analyse the strengths and weaknesses of an organisation, which can then be linked to the external opportunities and threats as inputs to the formulation of competitive business level strategies.
* In order to determine the strengths and weaknesses, we need to assess:
> The strategic direction as provided in the vision, mission, purpose and values.
> The key internal stakeholders, including managers, their experiences, strengths, weakness and management.
> Owner of the organisation
> Operational issues such as sales, assets and location
> The type and level of employees and culture of the organisation - 26Explain Competitive Advantage* When an organisation is more profitable than it's competitors.
* Ways to achieve this:
> Produce products with superior quality and charge a premium for the combination of resources, capabilities and core competencies used.
> Produce products at a lower cost than competitors in order to achieve high profits and efficiency. - 27How to produce a successful competitive advantage* Produce higher quality products than your competitors
* Be able to produce innovated products, services and capabilities
* Show better responsiveness to customer needs.
* Be more sufficient in transforming inputs to outputs. - 28What is a sustainable competitive advantageAn organisation with capabilities and core competencies that are durable over a long period, difficult to imitate, can be transferrable and be replaced in other settings.
- 29Provide the (4) elements of a sustainable competitive advantage* Durable - a long-lasting culture of reliable products
* Inimitable - produce superior products and charge high premium price.
* Transferability - KFC's secret recipe cannot be transferred
* Replicability - M-Benz has high quality and performance vehicles that cannot be replicated. - 30What are the (7) obstacles and drawbacks in doing business in Africa* Lack of Infrastructure - roads, harbours, electricity
* Lack of Industrial Development - improve manufacturing capabilities
* Political Instability - unpredictive government decision making, which leads to volatility and armed conflict.
* High Levels of Poverty - people are malnourished, susceptible to diseases, etc. In some countries, they live on social grants, which result in huge government spending.
* Corruption
* An inefficient public sector - economic growth for the African economy in 2013 was negative (-1.5%)
* Lack of key skills - limited access to education, an oversupply of semi- to unskilled workers. - 31What are the (6) elements of a holistic sustainable business model aka Six Sustainability Dimensions or elements for evaluating the sustainability of strategies. Page 49, figure 3.2* Environmental Context - should not harm the environment they operate in - thus, adhere to environmental legislation and regulation, etc
* Social Context - focus on the general welfare of society in which it operates - CSR, behaving ethically and contributing to economic development while improving quality of life of the workforce and their families as well as the local community
* Economic Context - Wealth and profit creation, which leads to salaries increases and dividends to shareholders
* Organisational Context - looks at strength, weaknesses, resources and capabilities in order to execute strategies.
* Stakeholders - all that can affect or be affected by the organisation
* Strategic Fit - 32What Triple-Bottom LineIt consists of the following three elements, which are regarded as the pillars of sustainability:
* Environmental
* Social
* Economic - 33Why is the Triple-Bottom line so important?It tackles important issues that lead the way to sustainable development.
It considers social and environmental issues with economic ones. - 34Explain the role of corporate governance in corporate sustainability* It is described as the system by which corporations are directed and controlled and it performs the following functions:
> Specifies the distribution of rights and responsibilities among different participants.
> Specifies the rules and procedures for making decisions in corporate affairs
> Provides a structure through which corporations set and pursue their objectives
> A mechanisms for monitoring the actions, policies and decisions of corporations.
> A mechanism for aligning the interests of different stakeholders.
> It's guided by the King III report
> It is the responsibility of organisations to ensure that they comply with the principles of King III - 35What are the (4) pillars of Corporate Sustainability* Sustainable development - it's roots are in the triple-bottom-line
* Corporate Social Responsibility - the role of business in society
* Stakeholder management
* Business Ethics - Essential element of corporate accountability. - 36What are the (4) Business-Level Strategies* Cost Leadership Strategy - produce products that customers want at a lower cost and yet at the same or higher quality than its competitors
* Differentiation Strategy - produce products & services that are unique to the industry, to customers that do not mind paying a premium price for what they want
* Focus low-cost leadership - focus on providing a product or services, with specific differences, to a narrow target market
* Best-cost leadership - 37How do to evaluate business-level strategiesEvaluate them in terms of :
* Suitability
* Acceptability
* Feasibilty - 38What are the main factors of Sustainable Development* Ethical Profit ( Economic Bottom Line)
* Healthy Physical Environment ( Environmental Bottom Line)
* Healthy Communities (Social Bottom Line)
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- Business/Economics Flashcards on Strategic Planning, created by Marinda Steenkamp on 23/05/2018.
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- Marinda Steenkamp
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