MGMT Ch. 6
MGMT Ch. 6 MGMT 300
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This 3 page Class Notes was uploaded by Kara Notetaker on Thursday March 3, 2016. The Class Notes belongs to MGMT 300 at University of North Dakota taught by Nikolaus Butz in Spring 2016. Since its upload, it has received 16 views. For similar materials see Principles of Management in Business, management at University of North Dakota.
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Date Created: 03/03/16
Review For Exam 2 Ch. 6-10 MGMT 300 Nikolaus Butz CH. 6 Business Plan-a plan created by an organization that states their goals, strategies and how they will measure their success Strategy- a plan that sets out the future actions of an organization Strategic Management- a process that involves managers from all parts of the organization in the formulation and the implantation of strategies and strategic goals - 3 reasons for Strategic Management 1. They can provide direction and momentum 2. They can encourage new ideas 3. They help develop a sustainable competitive advantage - The 5 steps of Strategic Management 1. Establish a Mission and Vision Statement a. Mission statement – an organizations purpose b. Vision Statement- a statement that show what the organization wants to achieve in the future 2. Establish the Grand Strategy a. Grand Strategy- shows how the organization is doing then allows a company to plan on how to achieve its goal i. 3 types of Grand Strategies 1. Growth- strategy that achieves growth in a company 2. Stability- a strategy that achieves little to no change within a company 3. Defensive(retrenchment)- strategy that reduces growth within a company 3. Formulate Strategic Plans a. Strategic formulation- choosing the best strategy to fit an organizations needs 4. Carry out the Strategic Plans a. Strategy Implentation- using a strategy chosen by an organization 5. Maintain Strategic Control a. Strategy Control- examining current strategies and adjusting them to better fit with the organization Strategic Positioning- working on the goal of comparative advantage while still maintaining the basis of an organization - 3 Principles of Strategic Management 1. Strategy has 3 main sources Review For Exam 2 Ch. 6-10 MGMT 300 Nikolaus Butz Few needs and many costumers Broad needs, few costumers Broad needs, many costumers 2. Strategy requires tradeoffs 3. Strategy needs to be shaped for each situation Competitive Intelligence- gaining knowledge about one’s competition to create a strategy on how to react on the competitions actions SWOT Analysis(situational analysis)- analyzing inside and outside information to understand strengths, weaknesses, opportunities and threats to an organization 1. Strengths- internal skills that can help an organization 2. Weaknesses-internal possibilities that can affect an organization negatively 3. Opportunities- factors on the outside that an organization can use to achieve competitive advantage 4. Threats- factors on the outside that can negatively affect an organization Porter’s 5 Competitive Forces - Porter’s model for industry analysis- business strategies that are based on 5 factors in an environment 1. The threat of new entrants 2. Bargaining power of suppliers 3. Bargaining power of buyers 4. Threats of Substitutes 5. Rivalry between organizations Porter’s 4 Competitive Strategies 1. Cost-leadership- keeps base costs low to keep it prices of goods and services below those of its competitors while aiming at the larger community 2. Differentiation- offer goods and services that are better than its competitors while aiming at a larger community 3. Cost-focus- leadership- keeps base costs low to keep it prices of goods and services below those of its competitors while aiming at the smaller community 4. Focused-differential- offer goods and services that are better than its competitors while aiming at a smaller community Single-Product Strategy- makes only one product with a market b. Risk- only on product c. Benefit- focus on the quality of one product Diversification- controls several businesses to spread out the risk Review For Exam 2 Ch. 6-10 MGMT 300 Nikolaus Butz a. Unrelated Diversification- several businesses under one ownership that have nothing in common to each other b. Related Diversification-several businesses under one ownership that share simialarities 1. Reduced risk- more than product 2. Management is more efficient 3. The whole company is greater than its individuality BCG Matrix-evaluating parts of an organization on its growth and its part in the market Execution-mixing strategy in with reality, making sure that the strategy can truly achieve an organization’s goal