Questions and Answers
Explain the role of strategic management and why it is important.
- Need strategies to achieve goals 2. Business model to focus on customer satisfaction and profits 3. Results in higher organizational performance 4. Allows manager to adapt better to uncertain environments 5. Helps with decision making by managers.
What are strategies in the context of organizations?
Plans for how an organization will compete successfully and attract/satisfy customers to achieve goals.
What is a business model?
Strategic design for how a company will profit from different processes.
Explain the role of managers in each of the six strategic management steps.
Signup and view all the answers
What is the mission of a firm?
Signup and view all the answers
What are goals in strategic management?
Signup and view all the answers
What is internal analysis?
Signup and view all the answers
What is external analysis?
Signup and view all the answers
List ways to implement strategy.
Signup and view all the answers
Describe three types of organizational strategies.
Signup and view all the answers
What are growth strategies?
Signup and view all the answers
What are renewal strategies?
Signup and view all the answers
What is competitive advantage?
Signup and view all the answers
What strategies do organizations use to gain competitive advantage?
Signup and view all the answers
What are first mover advantages?
Signup and view all the answers
What determines industry attractiveness and profitability?
Signup and view all the answers
What are strategic business units?
Signup and view all the answers
What are competitive forces?
Signup and view all the answers
Discuss current strategic management issues.
Signup and view all the answers
Study Notes
Role of Strategic Management
- Strategic management is essential for setting and achieving organizational goals.
- It creates a business model centered on customer satisfaction, leading to profitability.
- Facilitates improved organizational performance and adaptability in uncertain environments.
- Aids managers in making informed decisions.
Strategies
- Strategies outline how an organization competes and attracts customers to fulfill its goals.
Business Model
- A business model strategically delineates how a company generates profit through its operations.
Role of Managers in Strategic Management Steps
- Identify the mission, objectives, and existing strategies of the organization.
- Conduct an internal analysis regarding resources and capabilities.
- Perform an external analysis to identify market opportunities and threats.
- Formulate effective strategies based on analyses.
- Implement the formulated strategies across the organization.
- Evaluate outcomes to assess effectiveness and make necessary adjustments.
Mission
- A firm's mission defines its fundamental purpose and reason for existence.
Goals
- Goals provide measurable performance targets and act as a foundation for planning.
Internal Analysis
- Involves scanning the organizational environment for insights into mission, resources, capabilities, and core competencies.
External Analysis
- Focuses on identifying external opportunities and potential threats facing the organization.
Ways to Implement Strategy
- Key elements include managing human resources, developing information systems, exercising effective leadership, and establishing structural frameworks.
Types of Organizational Strategies
- Three principal strategies include growth, stability, and renewal.
Growth Strategies
- Concentration focuses on enhancing a primary product.
- Vertical integration can be backward (owning suppliers) or forward (owning distributors).
- Horizontal integration merges operations with competitors.
- Diversification includes related firms (synergistic) and unrelated firms (diverse sectors).
Renewal Strategies
- Retrenchment involves scaling back operations, such as layoffs.
- Turnaround strategies are enacted to address significant performance issues.
Competitive Advantage
- Competitive advantage grants a company a distinctive edge, often rooted in aspects like quality.
- Strategies to attain it include cost leadership, differentiation, focus, customer service, innovation, and being the first mover.
First Mover Advantages
- Early market entry can lead to cost savings and enhanced learning opportunities.
Industry Attractiveness and Profitability
- Determined by competitive forces within the market.
Strategic Business Units
- Distinct independent units within an organization that develop their own competitive strategies.
Competitive Forces
- Key forces include the threat of new entrants, substitute products, bargaining power of buyers and suppliers, and the intensity of current industry rivalry.
Current Strategic Management Issues
- The need for flexibility is driven by a changing business environment, requiring organizations to adapt continually.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
This quiz focuses on key concepts of strategic management. It covers the role of strategic management, its importance, and various strategies that organizations can deploy for competitive advantage. Test your understanding and enhance your knowledge of strategic frameworks and decision-making processes.