Corporate strategy quiz

• The chapter focuses on the planning process and strategic management within organizations
• Studying the content allows one to summarize planning, discuss strategies including SWOT, describe business and corporate level strategy, tactical plans, and operational plans

The Planning Process

• The organization’s mission includes its purpose, premises, directional values
• The environmental context impacts the organization's mission, strategic goals, strategic plans, tactical goals, tactical plans, operational goals, and operational plans
• Strategic goals lead to strategic plans, and tactical goals lead to tactical plans, and operational goals lead to operational plans

Organizational Goals

• Goals provide direction for people
• Goals have a strong effect on the quality of planning
• Goals serve as a source of motivation for employees
• Goals provide an effective tool for evaluation and control
• Goals are used for identification, adaptation, integration, collaboration, and revitalization

Kinds of Organizational Goals

• By Level: mission statement, strategic, tactical, and operational goals
• By Area: operations, marketing, finance, production goals
• By Time Frame: long-term, intermediate, short-term, explicit, and open-ended goals

Goal Breakdown By Level

• A mission statement describes the organization's fundamental purpose
• Strategic goals, set by top management, address broad competitive issues
• Tactical goals are set by middle managers, focusing on operationalizing actions
• Operational goals, established by lower-level managers, support tactical goals

Planning Flow

• Strategic plans are for upper Management
• Tactical plans are for middle management
• Operational plans are for lower level managers

Types of Plans

• Strategic plans are general, outlining resources, priorities, and steps to achieve strategic goals, and are set by top management
• Tactical plans aim to achieve tactical goals set by middle management
• Operational plans have a short-term focus and are set by lower-level managers

Time Frame Dimension

• Long-range plans for strategic is five or more years
• Intermediate-range plans for tacitical is 1-5 years
• Short-range plans for operational is one year or less

Strategic Management

• Strategy comprehensively plans to accomplish organizational goals
• Strategic management is the continuous process of formulating and implementing strategies for business opportunities and challenges
• Effective strategies align the organization with its environment and goals

Basic Strategy Components

• Distinctive competence means something an organization does exceptionally well
• Scope is the range of markets in which an organization will compete
• Resource deployment describes how an organization will distribute its resources in the areas it competes

Types of Strategic Alternatives

• Business-level strategy is an organization's choice when conducting business in an industry or market
• Corporate-level strategy involves an organization's alternatives in managing operations across industries and markets

Strategies by Organizational Level

• Corporate strategy formulation involves decisions about which markets to compete in
• Corporate strategy implementation involves competing via operations, mergers, acquisitions, ventures, and divestitures
• Business strategy formulation involves decisions about competing in a market
• Business strategy implementation involves carrying out strategies for each business
• Functional strategy formulation involves decisions about addressing each function within the organization
• Functional strategy implementation involves carrying out strategies for each function

SWOT Analysis

• SWOT analyzes mission from fundamental purpose, Internal including Strengths (distinctive competencies) and Weaknesses, External including Opportunites and Threats
• Good Strategies includes supporting the mission, exploit opportunities and strengths, neutralize threats and avoid weaknesses

Organizational Strengths

• Skills and abilities enable an organization to conceive of and implement strategies
• Distinctive competencies are strengths possessed by few competitors, providing competitive advantage
• Competitive advantage results from exploiting unique competencies to attain superior performance

Organizational Weakness

• Insufficient skills and capabilities limit an organization's choices in support of its mission
• Weaknesses can be address by investing to obtain strengths, modifying the mission, so it can be accomplished with the current workforce

Organizational Opportunities and Threats

• Opportunities are areas that may generate higher performance
• Threats are areas that make it difficult to achieve high performance

Porter's Generic Strategies

• Differentiation strategy seeks to distinguish an organization through quality
• Overall cost leadership strategy attempts to gain advantage by reducing costs below competitors
• Focus strategy concentrates on a specific market, product line, or buyer group

Product Life Cycle

• The product life cycle model shows sales volume changes over the life of products
• Introduction stage has very high demand that may outpace supply
• Growth stage brings more firms and sales continue to grow
• Mature stage has slowing overall demand growth
• Decline stage sees a decrease in product demand

Business Strategy Adaptation

• A prospector focuses on growth, risk, innovation, in a dynamic environment
• An analyzer stresses maintaining status quo, with moderate innovation. in a moderately stable environment
• Defender stresses stability, conservatism and maintenance of status quo in a very stable environment
• A reactor ineffectively adapts to its environment while drifting with little regard for strategy.

Corporate Level Strategies

• Single product strategy focuses on simplicity
• Related diversification focuses on synergy
• Unrelated diversification focuses on risk or return

Related Diversification

• Involves operating in linked businesses, industries, or markets
• Diversification relatedness is achieved with similar technology, common marketing/distribution skills, brand and common customers

Advantages of Related Diversification

• Reduction of business and economic risk
• Creation of economies of scale and scope
• Synergistic sharing of strengths and competencies

Unrelated Diversification

• Involves operating multiple, unrelated businesses
• Advantages include stable performance and resource allocation for high return
• Disadvantages include a difficulty in managing diverse businesses and failure to exploit synergies

Portofolio Management

• Used to decide businesses to engage in related to maximized corporate
• BCG (Boston Consulting Group) Matrix
• GE (General Electric) Business Screen

BCG Matrix

• Evaluates businesses relative to market growth and share
• Classifies businesses as Dogs (low share, no growth), Cash Cows (large share, mature market), Question Marks (small share, growing market), and Stars (large share, rapidly growing market)

GE Business Screen

• Evaluates firms across two dimensions: industry attractiveness and competitive position
• Shows where to invest resources in competitive, attractive industries.
• Competitive Postions factors and Market Factors determines if a Firm Should Be A Winner, Average or Loser, depending on Industry Attractiveness (High, Medium and Low) respectively

Tactical Plans

• Development includes recognizing strategic plans and tactical goals, specifying resource issues, human resource commitments
• Execution includes evaluating actions, distributing information, monitoring communication, ongoing activities

Operational Plans

• Single-use plans can be a program for a large set of activities; a project is for a specific smaller scope
• Standing plans can be Policies specifying the organization's response, Standard Procedures outlining steps, and Rules regulating activities.

Contingency Planning

• Involves determining alternative actions if a plan is disrupted
• Crisis Management: Set of procedures for managing a disaster or calamity

Contingency Planning Process

• Develop plan, considering contingency events
• Implement plan and identify contingency events
• Specify indicators for the events and develop contingency plans
• Successfully complete the contingency plan
• Monitor contingency event indicators and implement contingency plan if necessary

Test your knowledge of corporate strategy, diversification, and competitive advantage. Explore different levels of strategy and how companies compete across industries. Learn about resource allocation, market strategies, and expansion into new sectors.