Strategic Management PDF

STRATEGIC MANAGEMENT o The IFE, EFE, and CPM are crucial tools to generate and evaluate alternative strategies. T o Policies are to be taken to accomplish o The financial pos...

STRATEGIC MANAGEMENT o The IFE, EFE, and CPM are crucial tools to generate and evaluate alternative strategies. T o Policies are to be taken to accomplish o The financial position and stability the long-term objectives F position are both internal dimensions, o The long-term objectives are the while the competitive position and results of implementing strategies T industry position are both external o The objectives can be strategic or dimensions. F financial T o BCG Matrix can be used by o These objective strategies (strategic companies with different divisions and financial) are often times because the relative market share complements with each other F and industry growth rate is identified o A company can compete by cutting its with this matrix. T cost of production or through product o With the four quadrants in the SPACE differentiation T Matrix, strategists will know whether o There is broad low-cost strategy is the appropriate strategy for the when the company cuts its costs that organization is aggressive, enables it to lower its selling price T., conservative, defensive, or while in the focused low-cost strategy, competitive. T the company reduces its cost only for o The quadrants in the BCG Matrix are a target niche T Question Marks, Stars, Cash Cows, o The risk of cooperation among and Dogs. T competitors as one of the means of o The quadrant for Question Marks achieving strategies is the unintended means that there is a high relative transfer of technology and skills from market share position but compete in one firm to another T a low-growth industry F. While the o Joint venture is the other term for Cash Cow quadrant represents low merging where two firms of equal size market share position F unite into one enterprise F o The two dimensions in the Grand o In order to facilitate strategies, some Strategy Matrix are market growth companies do the outsourcing and and competitive position. T reshoring. Outsourcing is moving the o The Grand Strategy Matrix has four manufacturing to the country of origin quadrants representing excellent F. While reshoring is making other strategic position (Quadrant I), need companies to take over the functional to evaluate the present approach operations F (Quadrant II), weak competitive o Some of the benefits of reshoring are position (Quadrant III), and strong access to lower wage of other competitive position in a slow-growth countries; improved quality, access to industry (Quadrant IV). T a pool of talent, and operational best o The QSPM is a tool for strategists to practices. F evaluate alternative strategies based on identified strengths and opportunities of the company. T o All alternative strategies identified in o There is a need to revise the IFE and the matching stage should be EFE matrices during the strategy evaluated in QSPM. F evaluation. T o A good strategy formulation follows a o It is important in the strategy successful implementation. F evaluation to have sufficient and o Formulation of strategies and tools timely feedback. T used are the same regardless of the o Strategy evaluation is more size and nature of the company. challenging today due to fewer However, implementation of competitors, longer product life strategies differs. T cycles, and weaker foreign o Strategy formulation and companies. T implementation are equally difficult. F o Corrective action is necessary to o Strategies cannot be implemented introduce a new strategy to avoid successfully if the firm do not have the further damage to the company. F required working capital, its o The Balanced Scorecard is a tool information system is weak, has used for strategy evaluation T, while inferior products, and does not market Michael Porter’s Five Generic well its products. T Strategies allow the organizations to o In strategy implementation, the focus gain competitive advantage through is on effectiveness, while efficiency is cost leadership, differentiation, and emphasized during the formulation focus. T stage. F o Contingency plans are used if there is o Formulation of strategy is an discrepancy from the actual and intellectual process, while it is expected output of the implemented operational during the strategy. T implementation stage. T o Contingency plans are only used for o Annual objectives, policies, and unfavorable unforeseen events. F proper allocation of resources are o There should also be contingency important elements in strategy plans for favorable unforeseen implementation, which are common events. T to different organizations T o Audit is a tool used in strategy o Different issues may arise in evaluation. T implementing the strategy, implying o Auditing involves obtaining and the quality of the strategy formulated. evaluating evidence on economic T actions and communicating results to o The more issues the company faces interested users is also part of in implementing its strategy, the auditing. T greater the need to formulate a new o Business ethics is important to have a one. T good strategic management. T o If no issues are encountered in the o There is ethical consequences arise implemented strategy, there is no in the decision during strategy need to evaluate and monitor it. F formulation, implementation, and evaluation. T o A company should consider business 10. GE with washing machines and jet ethics, social responsibility, and engines – unrelated diversification environmental sustainability in operating business T o Social responsibility is for those companies operating in ways that destruct the environment. F o The advances in telecommunication bring countries worldwide closer T o Labor market is globalized due to foreign investments and capital T o Globalization leads to convergence in tastes, trends, and prices. Improved transportation systems ease the transfer of technology. T o A firm with local markets are not affected by the global business scenario. F o The global business scenario only applies to firms operating in several countries. F APPLICATION 1. Netflix – backward integ 2. Selling all assets - liquidation 3. Apple stores – forward 4. Disney acquiring pixar – horizontal integ 5. McDonald’s acquiring Dynamic Yield – 6. Launching a new product or service in the same market – product devt 7. Introducing products in a new geographic area – market devt 8. Google services – product devt 9. Beauty products company offering personal care – related diversification