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7 Cards in this Set
- Front
- Back
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Stages of crafting and executing Company's strategy |
1) developing strategic vision 2) setting objectives 3) crafting a strategy 4) implementing and executing strategy 5) monitoring developments and initiating corrective measures |
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Michael porters generic strategies |
Cost leadership Differentiation Focus |
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Cost leadership strategy |
1) standardized products at low per unit cost for price sensitive. Basic idea to underprice the competitor and gain adv. 2) when effective - market of many price sensitive buyers Few ways to achieve product differentiation Buyers don't care about brands Large no of buyers with significant power 3) achieved by - High efficiency Low overhead Intolerance of waste Lmt perks 4) disadvantages - Competitor may imitate this driving overall profits down Technological breakthrough make startgy ineffective Buyers interest may swing to features other than price.
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Differentiation strategy |
1) products and services considered unique directed at consumers who are relatively price insensitive 2) charge higher price to gain customer loyalty bec customers get attached to differentiation features 3) achieved by - Greater product flexibility Greater convenience Superior service Spare parts availablity Ease to use More features 4) disadvantages - May not be valued highly by the customers to justify high price Competitor ways to copy differentiating features |
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Generic strategy alternatives |
Stability Expansion - Intensification market penetration, market development, product development - Diversification Vertically (forward and backward), Horizontally, Concentric, conglomerate Retrenchment (5 stages) Turnaround, divestment, liquidation Combination |
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Turnaround |
1) Highly targetted effort to return an org to profit. Adopted to reverse the process of decline. 2) indicators that T is needed persistent neg cash flow, neg profits, declining mrkt share, high t/o of emplee and low morale, uncompetitive p&s 3) Elements contribute change in top Mgmt, quick cost reduction, better internal coordination, asset liquidation for generating cash |
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Divestment |
1) involves sale/liquidation of a portion of business/major division/profit centre/SBU 2)part of rehabilitation/restructuring plan, adopted when T is adopted and unsuccessful 3) T may be ignored if D is clearly the only option 4) When - Persistent neg CF creating financial problems for the co acquired buss mismatch cannot be integrated within co Technological upgradation req to survive firm not able to invest Severity of comp inability of firm to cooe Better alternative for inv so divest from unprofitable buss |
