Podcast
Questions and Answers
Which of the following is the MOST critical consideration when defining a corporate mission?
Which of the following is the MOST critical consideration when defining a corporate mission?
- The desires and preferences of the board of directors.
- The current economic climate and potential market fluctuations.
- The company's history, available resources, and distinctive competencies. (correct)
- The actions and strategies of the company's main competitors.
A hotel chain decides to purchase a large bakery that will supply all of its hotels with fresh bread and pastries. Which type of integrative growth strategy does this BEST represent?
A hotel chain decides to purchase a large bakery that will supply all of its hotels with fresh bread and pastries. Which type of integrative growth strategy does this BEST represent?
- Forward integration
- Backward integration (correct)
- Conglomerate diversification
- Horizontal integration
In the context of SWOT analysis, which of the following BEST describes an 'opportunity'?
In the context of SWOT analysis, which of the following BEST describes an 'opportunity'?
- A well-established competitor with a significant market share.
- An emerging market trend that the company could potentially capitalize on. (correct)
- A new government regulation that restricts business activities.
- Internal resource limitations hindering expansion.
A restaurant chain aims to become the most affordable option in its market segment. Which generic strategy is the restaurant chain PRIMARILY employing?
A restaurant chain aims to become the most affordable option in its market segment. Which generic strategy is the restaurant chain PRIMARILY employing?
A small, local tour operator forms an agreement with a large, international hotel chain to offer exclusive tour packages to the hotel's guests. What does this BEST exemplify?
A small, local tour operator forms an agreement with a large, international hotel chain to offer exclusive tour packages to the hotel's guests. What does this BEST exemplify?
According to the content, what is a key characteristic of a Strategic Business Unit (SBU)?
According to the content, what is a key characteristic of a Strategic Business Unit (SBU)?
In the BCG Growth-Share Matrix, a business with a high market share in a low-growth market is classified as a:
In the BCG Growth-Share Matrix, a business with a high market share in a low-growth market is classified as a:
Which of the following best exemplifies market-oriented strategic planning?
Which of the following best exemplifies market-oriented strategic planning?
In strategic planning, what is the primary purpose of managing a company's businesses as an investment portfolio?
In strategic planning, what is the primary purpose of managing a company's businesses as an investment portfolio?
Which element is NOT typically considered a critical component of a high-performance business?
Which element is NOT typically considered a critical component of a high-performance business?
The strategic planning process involves a sequence of activities. Which of the following sequences accurately reflects the order of these activities?
The strategic planning process involves a sequence of activities. Which of the following sequences accurately reflects the order of these activities?
How do stakeholder relationships primarily contribute to the success of a high-performance business?
How do stakeholder relationships primarily contribute to the success of a high-performance business?
What role does defining a company's mission play in its strategic planning process?
What role does defining a company's mission play in its strategic planning process?
When designing a business portfolio, what is the significance of assessing the future profit potential of each business unit?
When designing a business portfolio, what is the significance of assessing the future profit potential of each business unit?
In the business strategy planning process, how does the analysis phase contribute to the overall strategy development?
In the business strategy planning process, how does the analysis phase contribute to the overall strategy development?
Flashcards
Corporate Mission
Corporate Mission
Guiding principle shaped by a company's history, resources, and distinctive competencies.
Industry Scope
Industry Scope
The range of industries a company will consider operating within.
Strategic Business Unit (SBU)
Strategic Business Unit (SBU)
A unit that can be planned independently with its own competencies and manager.
Concentric Diversification
Concentric Diversification
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Backward Integration
Backward Integration
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SWOT Analysis
SWOT Analysis
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Strategic Alliances
Strategic Alliances
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Market-Oriented Strategic Planning
Market-Oriented Strategic Planning
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Investment Portfolio (in Strategic Planning)
Investment Portfolio (in Strategic Planning)
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Assessing Profit Potential
Assessing Profit Potential
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Stakeholders
Stakeholders
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Processes
Processes
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Resources
Resources
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Organization
Organization
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Planning Activities
Planning Activities
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Study Notes
- Managerial process of developing and maintaining a balanced fit between an organization's objectives, skills, resources, and its changing market opportunities.
Key Ideas Defining Strategic Planning
- Manage companies' businesses as an investment portfolio
- Assess future profit potential
- Develop the strategy
Nature of High-Performance Business
- Includes stakeholders (customers, governments, employees, communities, investors, suppliers), processes, resources, and organization
The High-Performance Business
- Sets strategies to satisfy stakeholders
- Improves critical business processes
- Aligns resources and the organization
Dynamic Relationships Among Stakeholder Groups in High Performance Businesses
- Stockholder satisfaction results from profits and growth.
- Customer satisfaction results from higher-quality products and services.
- Higher-quality employee environment results from employee satisfaction, which impacts customer satisfaction.
- Customer satisfaction leads to continuous improvements and breakthrough innovations.
Corporate Strategic Planning
- Corporate headquarters initiates the planning process.
- There is a greater need for employee empowerment.
- Hospitality and tourism industries are international and multicultural.
Defining the Corporate Mission
- Shaped by history
- Resources determine possibilities
- Based on distinctive competencies
Competitive Scopes
- Industry scope: range of industries the company will consider
- Products and applications scope: range of products and applications the company will participate in
- Competencies scope: range of technological and core competencies the company will master
- Market-segment scope: type of market or customers that the company will serve
- Vertical scope: number of channel levels from raw materials to final product and distribution
- Geographic scope: range of regions, countries, or country groups where the corporation will operate
Establishing Strategic Business Units
- A Strategic Business Unit is a single business or collection of related businesses that can be planned separately from the rest of the company.
- SBUs have their own set of competencies.
- SBUs have a manager responsible for strategic planning and profit performance.
Assigning Resources to Each SBU
- Analytical tools, like the Boston Consulting Group (BCG) model, classify businesses by profit potential.
BCG Growth-Share Matrix
- Star: High market growth rate and relative market share
- Question Mark: High market growth rate, low relative market share
- Cash Cow: Low market growth rate, high relative market share
- Dog: Low market growth rate and relative market share
Developing Growth Strategies
- Market Penetration: existing markets, existing products
- Market Development: New markets, existing products
- Product Development: existing markets, new products
- Diversification: new markets, new products
Diversification Growth
- Concentric diversification strategy
- Horizontal diversification strategy
- Conglomerate diversification strategy
Integrative Growth
- Backward integration: acquiring a supplier
- Forward integration: acquiring distributor of a product
- Horizontal integration: acquiring a competitor
Business Strategy Planning
- Includes business mission and SWOT Analysis (strengths, weaknesses, opportunities, threats)
Business Strategy Planning: Environment Analysis
- Includes internal environment (strengths and weaknesses) and external environment (opportunities and threats)
Business Strategy Planning: Goal Formulation
- Arrange goals from most to least important
- State quantifiable objectives.
- Ensure goals are measurable, realistic, and consistent.
Business Strategy Planning: Strategy Formulation
- Strategies are the paths to goals.
- Three generic types: overall cost leadership, differentiation, and focus
Business Strategy Planning: Strategic Alliances
- Cooperative agreements that allow organizations to benefit from each other's strengths.
- Strategic alliance examples in the hospitality and tourism industry include hotels partnering with airlines or car rental companies.
Business Strategy Planning: Programs, Implementation, Feedback
- Program formulation: Formulate programs that support the strategy.
- Implementation requires resources and employee buy-in.
- Feedback and control: Track results and monitor new developments.
Business Strategy Planning: Hotel Challenges
- Unique Challenges of the hotel industry complicate strategic planning.
- Major chains commonly do not own all managed properties.
- Hotel-resort owners often show little interest or knowledge of their property (ego-capital concept).
- Professional managers are often not trained in strategic planning.
- Global strategic alliances can further complicate the planning process.
Best Practices
- Howard Schultz brought the European coffee experience to America via Starbucks.
- Focus on growth, new products, and new retail channels to stave off competition.
Best Practices in Strategic Planning
- Examples: The Inn on Biltmore Estates, Tricon Global Restaurants (Yum Brands), Jack in the Box, The Las Vegas Hilton, Hyatt Hotels, and Boston Greater Convention and Visitors Bureau
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Description
Explore strategic planning: aligning organizational objectives, skills, and resources with market opportunities. Understand high-performance businesses, stakeholder relationships, and improving critical processes. Learn how to satisfy stakeholders and align resources for a high-quality environment.
