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What are the basic steps in any planning Process?
- Situational Analysis
- Alternative Goals and Plans
- Goal and Plan Evaluation
- Goal and Plan Selection
- Monitor and Control
Benefits of Goals and Plans (Study Guide)
- Plans are the actions or means managers intend to use to
- achieve organizational goals
they are the targets or ends the manager wants to reach.
Levels of Goals/Plans and their importance
- Mission Statement - External
- Strategic - Senior Management. Organization as a whole
- Tactical - Middle Management. Major divisions, functions
- Operational - Lower Management. Departments, individuals
Step 2: Alternative Goals and Plans
For goals to be effective they should have certain qualities, what are they?
- Specific - Employees can determine if they are working towards those goals
- Measurable - Goal should quantify the desired results
- Attainable (but challenging) - Employees need to recognize that they can attain the goals they are responsible for
- Relevant - Each goal should contribute to the organization's overall mission.
- Time-bound - Target date for completion
There are 3 types of Plans, what are they?
- Single-use...not likely repeated in future
- Contingency...Plan B
What is Strategic Planning and which management level does this involve?
- A set of procedures for making decisions about the organization's long-term goals and strategies
What is Tactical Planning and which management level does this involve?
- A set of procedures for translating broad strategic goals and plans into specific actions to be taken within parts of the organization. such as a functional area like marketing.
What is Operational Planning and which management level does this involve?
- The process of identifying the specific short-term procedures and processes required at lower levels of the organization.
What are the 6 major components of Strategic management process?
- Establishment of mission, vision, and goals
- Analysis of external opportunities and threats
- Analysis of internal strengths and weaknesses (resources & Core Competencies)
- SWOT (Strengths, weaknesses, opportunities, and threats) analysis and strategy formulation.
- Strategy implementation
- Strategic control
Define Core Competencies
It is something a company does especially well relative to its competitors.
Resources can be a source of competitive advantage if it is....
- Difficult to imitate
- Well Organized
Define SWOT analysis
A comparison of strengths, weaknesses, opportunities, and threats that helps executives formulate strategy.
How does SWOT analysis help managers?
- It summarizes the relevant and important facts from their external and internal analyses
- Identify primary and secondary strategic issues of organization
- They can formulate a strategy on SWOT. take advantage of opp., capitalize on strengths, neutralize weakness and countering threats.
Define Corporate strategy.
identifies a set of businesses, markets, or industries in which an organization competes and the distribution of resources among those entities
What are the types of Corporate Strategies?
- Vertical integration
- Concentric diversification
- Conglomerate diversification
single business competes in single industry. ex: food-retailing Kroger.
Define Vertical Integration
The acquisition or development of new businesses that produce parts or components of the organization's product.
- Ex: Tire company buys out another company to produce its tires.
- Ex: Coca cola company has bottles made from an outside company
Define Concentric Diversification
A strategy used to add new businesses that produce related products or are involved in related markets and activities.
Ex: Restaurant bus. moves outside of state into airline catering, hotels, and fast food.
*businesses are related, the products, markets, technologies, or capabilities used in one business can be transferred to another.*
Define Conglomerate Diversification and explain why companies would pursue a conglomerate diversification strategy.
A strategy used to add new businesses that produce unrelated products or are involved in UNRELATED markets and activities.
Ex: GE electric diversified to industries as health, finance, insurance, truck and air transportation and media.
Pursue - to minimize risks due to market fluctuations in one industry
How can companies achieve competitive advantage through business strategy?
- 3 ways
- 1. Differentiation Strategy- Be unique in the industry/market that customers value
- 2. Low-Cost Strategy- focus on efficiency and price
- 3. Functional Strategy - Organizational
- slide 42
Strategic Management Process
Step 5: Strategy Implementation
this involves 4 steps, what are they?
- 1. Define strategic tasks
- 2. Assess organization capabilities
- 3. Develop an implementation agenda
- 4. Create an implementation plan