September 13th-15th Notes
September 13th-15th Notes MNGT 3100- 004
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MNGT 3100- 004
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This 6 page Class Notes was uploaded by Callisa Ruschmeyer on Thursday September 15, 2016. The Class Notes belongs to MNGT 3100- 004 at Auburn University taught by Joel Carnevale in Fall 2016. Since its upload, it has received 4 views. For similar materials see Principles of Management in Business at Auburn University.
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Date Created: 09/15/16
Chapter 4 Missionand Vision as POLC Components Planning 1. Vision and mission 2. Strategizing 3. Goals and objectives Organizing 1. Organization design 2. Culture 3. Social networks Leading 1. Leadership 2. Decision making 3. Communications 4. Groups/teams 5. Motivation Controlling 1. Systems/processes 2. Strategic human resources 1. Mission,Vision, and Values Mission and vision are statements from the organization that answer questions about: o Who they are o What they value o Why they exist o Where they're going What is the difference? Mission statements Vision Statements Communicates the organization's reason A future-orienteddeclaration of for being and how it aims to serve its key the organization's purpose and stakeholders aspirations Often integrates a summation of the firm's Addresses what a firm wants to values become Mission statements tend to be longer than Vision statements tend to be vision statements relatively brief Side Note: Generic Strategy Cost leadership strategy Differentiating strategy o Beat out on price or service o Make product very different than others Focused strategy o Whether you are focusing on a customer segment or a geographic region Four Main Types of Strategy o Broad Cost Leader (Walmart) o Broad Differentiating Leader (Apple) o Focused Cost Leader (Dollar General) o Focus Differentiation Leader (Curves Gym) Diversification is different than differentiation o Diversification- being in multiple different businesses What makes a MissionStatement Effective? Length: should be an appropriate length o Short, sweet, but all encompassing o Core values! A company that claims to value everything really values nothing One to two key values Generic/vague: should clearly communicate the nature of your business o You mission statement should mention your core product o Barnes & Noble's statement is contradictory- mission statements should not be contradictory Inconsistencies: should reflect the actual principles by which you guide your company Vision Statement Intended to bring tension to where we are at and where we want to be Roles Played by Mission and Vision 1. Communicate the purpose of the organization to stakeholders Stakeholders; employees, customers, investors, suppliers, etc. Provides a vehicle to communicating the organization's purpose and direction 2. Inform strategy development and establish metrics for success Mission a division create a target for strategy development The best vision statements create a tension and relatedness with regard to the status quo "People don't buy what you do, they buy why you do it." 3. Develop the measurable goals and objectives by which to gauge the success of the organization's strategy Communicate an organization's values in order to attract stakeholder's who also hold those values Chapter 5 2. Strategizing Strategic Management Process Definition- the process by which a firm manages the formulation and implementation of its strategy o The coordinated means by which an organization achieves its goals and objectives Strategy formulation- the set of processes involved in creating or determining the strategies of the organization Strategy Implementation- the methods by which strategies are operationalized or executed within the organization Corporate and Business Strategy: Two Aspects of Strategizing Corporate strategy o What business or businesses should we be in? o How does being in one business help us compete in our other businesses? Business strategy o How should we compete? o Business strategy include: cost leadership, differentiation, and focused generic strategies What's the Difference? Business-level strategies deal with a specific business unit; corporate strategies, in contrast, deal with the entire corporation, which may include several business units Business strategies deal with things like: o Pricing products o Sales forecasting o New product introduction Corporate strategies deal with things such as: o Creating a competitive advantage in the marketplace o Development of unique firm competencies o *corporate strategies tend to be broad Business Strategy and the Development of Generic Strategies One of the main responsibility of business strategy is to develop a generic strategy for the business unit The objective of a generic strategy is to generate a competitiveadvantage,increase the loyalty of customers and beat competitors Three main generic strategies are o Low-cost leadership strategy o Differentiation strategy o Focused strategy Low-Cost Leadership Strategies *Strive to be the overall low-cost provider in an industry How to achieve overall low-cost leadership o Scrutinize each cost activity o Cut some cost activities out of the value chain Competitive strengths of an overall low-cost strategy o Organization in a better position to compete offensively on price o Works best in environments where customers are price sensitive o Organization is able jot use price as a defense against substitutes o Low cost is a significant barrier to entry- why? Differentiation Strategies Striving to build customer loyalty by differentiating an organization's products from competitors' products Keys to success include o Finding ways to differentiate to create value for customers that are not easily copied Example- Tom's Shoes create value but can be easily copied o Not spending more to differentiate than the price premium that can be charged A successful differentiation strategy allows an organization to o Set a premium price o Build brand loyalty o A strong brand may be a deterrent for new entrants Quick Review Difference between corporate strategy and business strategy o Business strategy- how am I going to compete o Corporate strategy Generic Business Strategies Examples Different generic strategies can lead to competitive advantage in the same industry Answers the question- how am I going to compete? Differentiation o A firm seeks to be unique in its industry along some dimensions that are widely valued by buyers o Higher value; unique features o What is the firm doing to reduce its costs? o Focused-Differentiation: what is the firm's focus? Is the firm targeting a specific customer or market? o Example- Role Cost-Leadership o A firm sets out to become the low cost producer in the industry o Similar value; lower cost o What is the firm doing to differentiate itself from its competitors? o Example- Timex Scope of the Strategy o Narrow (Focused) The choice of a narrow competitive scope within an industry; the focuser selects a segment of group of segments in the industry and tailors its strategy to serving them to the exclusion of others Example- Rolex o Broad Example- Timex Straddling Positions or Stuck in the Middle? Strategy is about tradeoffs You cannot meet every customers' needs Corporate Strategy Synergy o The interaction of two or more activities, creating a combined effect greater than the sum of the individual efforts "the whole is greater than the sum of its parts" Examples chips-on-sandwich YUM! Brands' foods being all combined into one building Disney and Pixar- Disney's marketing and promoting savviness + Pixar's animation and character assets Disney buying Marvel- added Marvel's animation and character assets to Disney's Theme Parks, Cruise ships, etc. Diversification o The number of different businesses that an organization is engaged in and the extent to which these businesses are related to each other The purpose of diversification is to spread out risk and opportunities over a larger set of businesses o Related vs. Unrelated Diversification Related diversification- occurs when a firm operates multiple business within the same industry Examples- Disney (all focused on entertainment) Unrelated diversification- occurs when a firm engages in businesses in different industries that lack similarity between each other Examples- Nestle; GE Strategies for Entering New Businesses Diversifying into new businesses includes one of the following 1. Merger and acquisitions 2. Internal new venture (start-up) 3. Joint venture (share costs, risks, and profits, but still be independent
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