Strategic Management Chapter 7 Flashcards

Questions and Answers

What is strategic management?

The set of decisions and actions used to formulate and implement strategies for organizational goals. (correct)

A method of analyzing competition in the market.

The process of deciding the best course of action for accomplishing organizational objectives.

Resource allocation among various departments.

What is a strategy?

The plan of action that prescribes resource allocation and other activities for dealing with the environment.

Define core competence.

A business activity that an organization does particularly well in comparison to competitors.

Synergy occurs when parts of an organization interact to produce a joint effect greater than the sum of the parts acting alone.

True Signup and view all the answers

What is corporate level strategy?

What business are we in? Signup and view all the answers

What is business-level strategy?

How do we compete? Signup and view all the answers

What is functional-level strategy?

How do we support the business-level strategy? Signup and view all the answers

What is strategy formulation?

The process of deciding the best course of action for accomplishing organizational objectives. Signup and view all the answers

What does strategy execution involve?

Use of managerial and organizational tools to direct resources towards achieving strategic outcomes. Signup and view all the answers

What is SWOT analysis?

Analysis of the strengths, weaknesses, opportunities, and threats affecting organizational performance. Signup and view all the answers

Define strategic business unit.

A division of the organization with a unique business mission, product line, competitors, and markets. Signup and view all the answers

What is portfolio strategy?

The organization's mix of strategic business units and product lines that provide synergy and competitive advantage. Signup and view all the answers

What is the BCG matrix?

A concept that evaluates strategic business units based on business growth rate and market share. Signup and view all the answers

What is diversification?

A strategy of increasing sales by introducing new products into new markets. Signup and view all the answers

Define related diversification.

Entering a new business or industry to create a competitive advantage in existing divisions or businesses. Signup and view all the answers

What is unrelated diversification?

A growth strategy whereby a new business lacks any common elements with the present business. Signup and view all the answers

What is vertical integration?

Practice where a single entity controls the entire process of a product, from raw materials to distribution. Signup and view all the answers

Which of the following are part of Porter's Five Competitive Forces?

Bargaining power of suppliers Signup and view all the answers

Define differentiation in a competitive strategy.

A type of competitive strategy where the organization seeks to distinguish its products or services. Signup and view all the answers

What is cost leadership?

A type of competitive strategy focused on being the most efficient and cutting costs. Signup and view all the answers

What does focus mean in competitive strategy?

Emphasizing concentration on a specific regional market or buyer group. Signup and view all the answers

What are dynamic capabilities?

Leveraging and developing more from the firm's existing assets and competencies for sustained competitive advantages. Signup and view all the answers

What is globalization?

The standardization of product design and advertising strategies throughout the world. Signup and view all the answers

Define multi-domestic strategy.

Customizing products and marketing strategies to specific national conditions. Signup and view all the answers

What is transnational strategy?

An international strategy aimed at achieving both global efficiency and local responsiveness. Signup and view all the answers

Which of the following are components of strategy execution?

Leadership Signup and view all the answers

Study Notes

Strategic Management Concepts

Strategic Management: Involves decisions and actions that align an organization with its environment to fulfill its goals competitively.
Strategy: A plan dictating how resources are allocated to gain competitive advantage and achieve objectives.
Core Competence: A business activity that an organization excels at relative to its competitors, providing a unique advantage.

Organizational Dynamics

Synergy: The phenomenon where interactions among an organization’s parts yield a greater overall effect than their individual performances.
Corporate Level Strategy: Addresses the fundamental question of what businesses the organization should be in.
Business-Level Strategy: Defines how a business competes within its sector; focuses on market tactics.
Functional-Level Strategy: Supports business-level strategies through specialized actions and resources.

Strategy Development and Implementation

Strategy Formulation: The decision-making process that involves assessing the environment and forming corporate, business, and functional strategies to meet objectives.
Strategy Execution: The phase that utilizes managerial tools and resources to ensure strategic outcomes are achieved.

Analytical Tools

SWOT Analysis: Evaluates an organization’s strengths, weaknesses, opportunities, and threats to inform strategic planning.
Strategic Business Unit (SBU): A division within an organization with a distinct business mission, products, competitors, and markets.
Portfolio Strategy: The collection and management of SBUs and product lines to achieve synergy and a competitive edge.

Growth Strategies

BCG Matrix: A tool for assessing SBUs based on market growth rate and market share to inform resource allocation.
Diversification: Expanding sales through new products in new markets; this includes both related and unrelated diversification.
Related Diversification: Expanding into new businesses that can benefit from existing operations or enhance competitive advantage.
Unrelated Diversification: Entering a new business area that shares no ties with the current operations.

Integration and Competitive Strategies

Vertical Integration: A strategy where a single entity controls all stages of a product’s life cycle, from raw material to distribution.
Porter’s Five Competitive Forces: Framework evaluating competitiveness based on new entrants, buyer power, supplier power, substitutes, and rivalry.
Differentiation: A strategy aimed at distinguishing products/services to provide unique value compared to competitors.
Cost Leadership: Focuses on achieving efficiencies and cutting costs to outperform competitors on price.
Focus Strategy: Concentrates on serving a specific market or buyer group effectively.

Global Strategies

Dynamic Capabilities: The ability to leverage and enhance existing assets and competencies for sustainable advantages.
Globalization: Standardizing product design and marketing approaches across international markets.
Multi-Domestic Strategy: Customizes products and marketing to align with local market conditions and consumer preferences.
Transnational Strategy: Aims to achieve efficiency globally while being responsive to local needs.

Strategy Execution Components

Key elements involved in strategy execution include leadership, structural design, information and control systems, and human resources.

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Description

Explore the key concepts of strategic management through these flashcards based on Chapter 7. Understand the importance of strategy formulation and implementation in achieving organizational goals and gaining a competitive edge. Perfect for students looking to reinforce their knowledge in this crucial area of business management.